Remarks by Angel Gurría, OECD Secretary-General, delivered at the UK Global Law Summit.
Monday 23 February 2015
(As prepared for delivery)
Prime Minister Massimov, Lord Chief Justice, Mr Attorney General, Minister Grayling, Ladies and Gentlemen:
It is an honour to address such a distinguished audience on such an auspicious occasion: to mark 800 years since the sealing of the Magna Carta. The Magna Carta was an early affirmation of the “rule of law”, its architects were pioneers of what we might now call ‘good governance’. And their pragmatism, their foresight, continues to inspire us today as we confront the challenges of how to bring international law into the 21st century.
Confronting new and shifting global realities
In thinking about international law, we should consider the following trends:
Firstly, the global economy is more interconnected than ever, more fluid and much more complex than ever before; action or inaction in one country can have major repercussions in an increasing number of other countries or regions. The classic model for the development of international law is not always adapted or even adequate to this rapidly changing environment. In contrast, the negotiation of major international conventions or agreements is often slow and painful. In some cases it has come to a complete standstill. This is a huge challenge.
Secondly, the scope of international law is changing: international law can no longer be understood as merely the regulation of conduct amongst states; and classic intergovernmental organisations can no longer be considered as the exclusive actors or providers of international law. Additionally, we are increasingly seeing that the substance of international commitments is prevailing over the legal form of such commitments. So the distinction between ‘hard’ and ‘soft’ law is becoming less and less operational.
Finally, in the context of these new global realities, the sectoral approach to international law raises questions. For example, what areas need to be covered in the international law coming out of COP21 in Paris? The environment? The economy? Development? Human rights? A mix of all of the above? Clearly for the negotiations to be successful all of these areas have to be integrated.
In short, we need an international law which meets the challenges of globalisation: an international law that some may want to designate as Global law. At the OECD we have launched a process to develop New Approaches to Economic Challenges, to reflect on the roots of and lessons from the global crisis, and to review and update the OECD’s analytical framework. Well, I am telling you today; we need New Approaches to International Law!
The international law of the 21st century should be adaptable and inclusive
Firstly, international law must adapt to the world! I may not make lawyers in this room happy but I believe that it is for the law to adapt to the world and not for the world to adapt to the law. We need to be able to adapt the norms and standards we develop to rapidly evolving international environments, new economic and social actors and new synergies. We should not hesitate to use the “cancel and replace” function when we need it and replace obsolete legal instruments with new and more flexible ones.
International law should be respectful of different models of development and different national approaches to shared challenges. If we want citizens to be on board, we should develop an international law which does not necessarily propose a one-size-fits-all approach, but rather a concept of “functional equivalence”: by that I mean a law which fixes a common target, a common goal, but accepts that there may be different ways to reach that target or goal.
And of course, this adaptable, respectful, international law should involve a wider variety of stakeholders. Purely intergovernmental negotiations will not do the trick anymore. Business, social partners and civil society want to be associated with the elaboration of the norm and it is a legitimate wish. When the OECD last revised its Guidelines on Multinational Enterprises, in 2011, we learned the lessons of the past and we involved all stakeholders in this collective effort.
In a globalised world, we need to address common challenges together. Domestic is international and viceversa. We face a new reality!
The international law of the 21st century should also be effective and innovative
We also need the international law of the 21st century to be more effective. We need to find new ways of standard setting, ensuring they have impact and change realities. The OECD has been extremely influential through the development of what are considered pure soft law legal instruments, which are not legally binding. But it has been successful because what was produced was a good standard and because it has been made accountable through peer review.
To be effective, we must embrace innovation, and accept that it takes time for new ideas to be adopted by the international community. The polluter pays principle was first developed by the OECD in 1972 before it became encapsulated in the Rio Declaration of 1992. The OECD developed a Convention on Mutual Assistance in Tax Matters in 1988. But it is only in the last few years that it has become the basis for the incredible shift to the automatic exchange of information on tax matters that culminated in Berlin last October, with the signing of an agreement between more than 50 countries and jurisdictions. This included a number who had been until recently regarded as “tax havens”. The G20 has been vital to allow for this.
The international law of the 21st century should be accountable
Last, but absolutely not least, international law of the 21st century should be accountable. In fact, I consider this to be the most important feature of all.
A treaty, a declaration, a decision or a recommendation should be more than a photo opportunity. Implementation is everything! Commitments should be acted upon in good faith. For that to happen we should push for much greater monitoring of implementation. Countries should be accountable vis-à-vis the international community, whether they are acting in the context of the G20, the UN, or the OECD. At the OECD we have developed a system based on peer review and peer pressure, which overall is quite successful. This requires human and financial resources but its absence is much more costly to society.
If the OECD Anti-Bribery Convention did not have a strong monitoring mechanism, a number of countries would not yet have implemented national legislation. If the Global Forum on Transparency and Exchange of Information for Tax old site did not monitor the commitments undertaken by countries around the world, we would surely not be in the strong position we are today, with over 90 jurisdictions committed to implementing the new global standard on Automatic Exchange of Information (AEOI) by 2018. If common commitments were not included in our accession process, we would not see the same outcomes!
The experience of the OECD calls for an approach marked by pragmatism, flexibility, adaptability, innovation and a commitment above all to implementation and accountability. With this ‘reform state of mind’, we can bring international law into the 21st century.
Ladies and Gentlemen:
In the words of John Duke Coleridge, an eminent nineteenth-century British lawyer, judge and Lord Chief Justice of England: “Law grows, and though the principles of law remain unchanged, […] their application is to be changed with the changing circumstances of the times”. This is the kind of approach, which should guide us as we embark on adapting international law to the ‘changing circumstances’ of today.
The OECD has been a successful international standard-setter for over 50 years, and we have developed a wealth of experience and best practice in achieving international cooperation and coordination. But to bring international law into the 21st century we need a global dialogue, a multi-stakeholder debate on the way forward.
This summit is an opportunity to move the debate on in this crucial year for the international community of 2015. I urge you to be bold, to be creative, to innovate. We have to act now and with stronger international legal instruments and institutions to ensure we make the most of this once in a generation opportunity to address climate change and promote sustainable economic development.