DIREKTORAT JENDERAL HUKUM DAN PERJANJIAN INTERNASIONAL KEMENTERIAN LUAR NEGERI REPUBLIK INDONESIA

Volume 14  September—Desember 2013

ARTIKEL Treaty Making Power in ASEAN: Legal Analysis on ASEAN Practices Damos Dumoli Agusman The Legal Implication of the Volcanic Ash Cloud Contingency Plan Adrianus Adityo Vito Ramon Global Governance in a Globalizing World: Do Globalization and Global Governance Erode National Sovereignty? Frassminggi Kamasa Teinver v. Argentina: The Most Favored Nations Principle in a Multiple Bilateral Investment Treaties Era Nenda Inasa Fadhilah RESENSI BUKU Refleksi dan Kompleksitas Hukum Humaniter Ratih Wulandari ISTILAH HUKUM

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Jurnal Hukum dan Perjanjian Internasional OPINIO JURIS

Volume 14  September—Desember 2013

DIREKTORAT JENDERAL HUKUM DAN PERJANJIAN INTERNASIONAL KEMENTERIAN LUAR NEGERI REPUBLIK INDONESIA 2013

Jurnal Hukum dan Perjanjian Internasional OPINIO JURIS Volume 14  September—Desember 2013 Diterbitkan oleh Direktorat Jenderal Hukum dan Perjanjian Internasional Kementerian Luar Negeri Sejak Oktober 2009 Penanggung Jawab Linggawaty Hakim, SH., LL.M Raudin Anwar, SH., LL.M Redaktur Yoshi Iskandar, SH.; Kemal Haripurwanto, SH., LL.M; Amrih Jinangkung, SH., LL.M; Elmar Iwan Lubis, SH.; Drs.Sukarsono; Sudarsono, SH., MM; Rofita, SH; Zainul Idris Yunus, SE; Hendrar Pramudyo, SH. Editor Nenda Inasa Fadhilah, SH., LL.M.; Santa Marelda Saragih,SH., MH.; Ratih Wulandari, SIP.; Vina Novianti, S.Hum.; Rike Octaviany, SH., LL.M.; M. Ferdien, SH. Disain Grafis Abdul Hayyi Sekretariat Uki Subki, S.Sos, M.Si.; Anisa Husna, S.Hum; Tasunah; Maisaroh, S.Sos. Alamat Redaksi: Sekretariat Direktorat Jenderal Hukum dan Perjanjian Internasional Kementerian Luar Negeri Jl. Taman Pejambon No. 6 Jakarta Pusat Telp. +62 21 3846633 Fax. +62 21 3858044; Email: [email protected] Jurnal Opinio Juris versi digital dapat diunduh di website http://pustakahpi.kemlu.go.id/

Tulisan yang dimuat dalam Jurnal Opinio Juris adalah pendapat dan analisis pribadi dari para penulis dan tidak mewakili pandangan/posisi Kementerian Luar Negeri dan/atau Pemerintah Republik Indonesia.

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DAFTAR ISI Daftar Isi ..........................................................................................................v Daftar Gambar .............................................................................................. vi Pengantar Redaksi ...................................................................................... vii Treaty Making Power in Asean: Legal Analysis on Asean Practices ... 9 Damos Dumoli Agusman The Legal Implication of the Volcanic Ash Cloud Contingency Plan .......................................................................................................................... 37 Adrianus Adityo Vito Ramon Global Governance in a Globalizing World: Do Globalization and Global Governance Erode National Sovereignty? ................................. 68 Frassminggi Kamasa Teinver v. Argentina: The Most Favored Nations Principle in a Multiple Bilateral Investment Treaties Era ........................................... 102 Nenda Inasa Fadhilah RESENSI BUKU ......................................................................................... 131 Ratih Wulandari ISTILAH HUKUM ..................................................................................... 135 TENTANG PENULIS ................................................................................ 138

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DAFTAR GAMBAR Figure 1: The location of world volcanoes – in red ...................................... 43 Figure 2: Eruption column and umbrella ...................................................... 45 Figure 3: The damages on aircraft engine due to volcanic ash cloud ........ 48 Figure 4: The flow of information in ICAO IAVW ....................................... 52 Figure 5: Regional VAAC................................................................................. 53

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PENGANTAR REDAKSI Di tahun ke-5 Volume 14 penerbitan Jurnal Opinio Juris tetap eksis mempertahankan ciri khasnya sebagai Jurnal yang mengkhususkan diri pada kajian dan tulisan dibidang hukum internasional. Redaksi Jurnal Opinio Juris tidak saja berupaya mempertahankan dan meningkatkan kualitas tulisan yang ada, namun juga menyajikan tulisan yang aktual sesuai dengan perkembangan isu hukum internasional. Jurnal Opinio Juris Volume 14 tahun 2013 dan volume sebelumnya dapat pula dibaca dalam bentuk e-journal melalui website http://pustakahpi.kemlu.go.id. Hal ini dimaksudkan agar para pembaca yang tidak memperoleh hard copy-nya dapat mengakses dan terbuka luas untuk publik. Pada Volume 14 tahun 2013 ini, redaksi memuat empat tulisan mengenai yaitu: ―Treaty Making Power ASEAN Legal Analysis on ASEAN Pratices” oleh Damos Dumoli Agusman, ―The Legal Implication of the Volcanic Ash Cloud Contingency Plan” oleh Adrianus Adityo Vito Ramon, ―Global Governance In A Globalizing World: Do Globalization And Global Governance Erode National Sovereignty?” oleh Frassminggi Kamasa dan ―Teinver V. Argentina: The Most Favored Nations Principle In A Multiple Bilateral Investment Treaties Era” oleh Nenda Inasa Fadhilah. Dalam penyajian tulisan tersebut di atas, tergambar beberapa topik bahasan dari Hukum Organisasi Internasional, Hukum Udara, Hukum Investasi dan hubungan antara kedaulatan negara dan globalisasi yang semuanya bernuansa Hukum Internasional. Untuk mempertahankan ciri khas Jurnal Opinio Juris, kami menampilkan Resensi Buku Refleksi dan Kompleksitas Hukum Humaniter yang dikarang oleh Prof. KGPH. Haryomataram, SH., Brigjen

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(Purn) dan Istilah Hukum yang secara umum mendeskripsikan berbagai istilah hukum yang dipilih secara khusus dan lazim digunakan sebagai terms pada kajian Hukum Internasional. Pada kesempatan ini, redaksi Opinio Juris juga hendak mengajak para pembaca untuk turut berkontribusi serta memberikan saran dan masukannya demi peningkatan kualitas Opinio Juris di masa mendatang melalui email [email protected]. Akhir kata, Redaksi Opinio Juris berharap semoga jurnal ini dapat menjadi sarana dalam menyebarluaskan berbagai informasi, wacana dan wadah sumbangsih pemikiran di bidang hukum dan perjanjian internasional yang berkaitan dengan pelaksanaan hubungan luar negeri. Terima kasih dan selamat membaca!

Redaksi Opinio Juris

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TREATY MAKING POWER IN ASEAN: LEGAL ANALYSIS ON ASEAN PRACTICES Damos Dumoli Agusman Abstrak Dengan berlakunya Piagam ASEAN, ASEAN telah menjadi sebuah organisasi internasional yang berdasarkan atas ketentuan hukum dan memiliki kapasitas untuk melakukan tindakan hukum, salah satunya untuk membuat perjanjian internasional. Akan tetapi, beberapa pertanyaan muncul terkait hal tersebut, misalnya apakah Sekretaris Jenderal ASEAN dapat membuat perjanjian internasional atas nama negara-negara anggota, apa sajakah jenis perjanjian internasional yang dapat dibuat dan bagaimanakah implikasi hukum penandatanganan suatu perjanjian internasional oleh ASEAN atas keterikatan negaranegara anggotanya terhadap perjanjian tersebut. Tulisan ini akan menganalisis praktik-praktik pembuatan perjanjian internasional oleh ASEAN sebelum dan sesudah berlakunya Piagam ASEAN serta halhal yang perlu dibenahi oleh ASEAN dalam upaya memperkuat sistem hukumnya, khususnya dalam hal pembuatan perjanjian internasional. Keywords: ASEAN Charter, international law, treaty making power, international organization, representation Abstract As the ASEAN Charter has entered into force, ASEAN has become an international organization with legal basis and has a capacity to do any legal conduct. One of them is the power to make an international treaty. Furthermore, some questions arise regarding such power, for instance, can the Secretary General of the ASEAN make an international treaty on behalf of the ASEAN’s member countries, what kind of international treaty that can be made, and how does the legal implication for ASEAN’s member countries upon an international treaty signed by the ASEAN. This paper will analyze practices of international treaty making by the ASEAN before and after the ASEAN Charter entered into force, and will suggest matters that need to be solved by the ASEAN in its effort to strengthen its legal system, particularly in making international treaty.

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Keywords: ASEAN Charter, international law, treaty making power, international organization, representation

Since the entry into force of the ASEAN Charter in 2008, it is widely said that ASEAN has moved from a loose organization to a rule-based one. It implies that the activities of ASEAN shall be on the basis of law applicable to the organization. ASEAN Charter as a treaty known to international law will serve as a legal basis to all activities conducted by ASEAN, both for internal and external objectives. Unfortunately, ASEAN as an international organization for the purpose of international law has not received much attention from international legal scholars. Albeit its growing structure as a mature international organization, it is hardly approached from international law perspective. On the other hand, as commonly experienced by many organizations alike, some legal questions may arise with regard to ASEAN. Is ASEAN an international organization having legal capacity to enter into a treaty? If yes, how does it exercise its treaty making power? In order to answer these questions, it is worth exploring the defined concept of ASEAN as subject of international law and what elements are required to constitute an international organization for having quality as a subject of international law. This paper attempts to discuss the practical problem arising from its practices before the entry into force of ASEAN Charter and explore the remaining potential conflict that might be encountered in the future. This paper will demonstrate that the legal

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problems facing ASEAN treaty making power are those that have encountered the International Law Commission when it dealt with the problematic question of treaties concluded by international organizations. The first is the question on the status of its members when ASEAN concluded a treaty and the second is on the representation, in the sense of whether ASEAN could conclude a treaty on behalf of its members. The paper will explore the issue that needs to be addressed by ASEAN with a view to strengthening its rule-based system as an organization, particularly in treaty making regime. A. ASEAN as an International Organization ASEAN Charter endorses in Article 3 its legal personality by providing that ASEAN, as an intergovernmental organization, is herebyconferred legal personality. The formulation is carefully drafted in a way that the Charter is only confirming the legal fact that ASEAN is, and was before, an intergovernmental organization having legal personality. It must be held, that the personality under international law has been already enjoyed by ASEAN before the Charter. Chesterman1 puts it correctly when arguing that the fact that ASEAN now claims international legal personality in the Charter does not mean it lacked it previously, nor that it now possesses it in any meaningful way.

1

Chesterman, Simon, Does Asean Exist? The Association Of Southeast Asian Nations as An International Legal Person, (2008) 12 SYBIL 199-211, at 199.

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From the legal writings and the jurisprudence it might be concluded that the question as to whether international organizations are subject of international law as well as the question on their legal capacity to enter into treaties has been completely resolved either in theoretical or practical level. 2 However, preconditions established by international law (objective criteria) shall be met before an organization is recognized as international organization for that purpose. 3 It is widely agreed that there are at least two constituent elements required to form an international organization status, i.e. a treaty establishing the organization and a permanent independent organ detached from that of the founders. The ILC in its present works on the responsibility

of

international

organizations

defines

international

organization as:

2

The ICJ in the most important case on this matter, i.e. Reparation for Injuries Suffered in the Service of the United Nations Case, 1949, has affirmed that the United Nations is a subject of international law and capable of possessing international rights and duties, and that it has capacity to maintain its rights by bringing international claim, ICJ Reports, 1949, pp.178-179. This established view was reaffirmed in ICJ Advisory Opinion in Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt,2 1980, which is held that: International Organizations are subjects of international law, as such, are bound by any obligations incumbent upon them under general rules of international law, under their constitutions or under international agreements to which they are parties. 3 Schermers, Henry G,, International Institutional Law, Leiden, Stijthoff & Noordhoff, 1980, p. 277, Reuter, Paul, International Institutions, London, George Allen & Unwin Ltd, 1958, p. 21, Brownlie, I, Principles of Public International Law, Oxford, Fourth Ed., 1990, pp. 681-682, Rama-Montaldo, 'International Legal Personality and Implied Powers of International Organizations', (1970) XLIV BYIL 111, pp. 144-145, Arangio-Ruiz, Gaetano, 'the Concept of International Law and the Theory of International Organization', (1972) III RdC 419, pp. 676-677.

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“International organization” means an organization established by a treaty or other instrument governed by international law and possessing its own international legal personality. International organizations may include as members, in addition to States, other entities;4 When the two criteria apply to ASEAN, it appears that since its inception through Bangkok Declaration in 1967 until 1976 ASEAN lacked its legal personality. It was not a proper international organization in the sense of international law since, although established by a treaty, it was lacking the organ detached from its founders. It was merely a joint organ, which acted on behalf of its members. The establishment of the ASEAN Secretariat in 19765, gives effect to its legal status because the second precondition, i.e. an organ detached from its founder has then been fulfilled. Since then, ASEAN could be qualified an international organization for the purpose of international law in the sense that it is a distinct entity subject of international law.

4

Draft articles on the responsibility of international organizations, adopted by the International Law Commission at its sixty-third session, in 2011, Article 2 (a). 5 Agreement on the Establishment of the ASEAN Secretariat, Bali, 24 February 1976, http://www.asean.org/1265.htm.

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B. ASEAN Treaty Making Power Since 1976 and before ASEAN Charter, ASEAN has exercised its treaty making power. However, the rules of ASEAN prior to the ASEAN Charter did not as yet contain any clear rules for regulating the conclusion of treaties with other subjects of international law on its behalf, but the principles have been laid down that the capacity to make treaties resides in its plenary organ, i.e. ASEAN Ministerial Meeting. ASEAN external relations will be the primary responsibility of the ASEAN Ministerial Meeting, which will formulate, when appropriate in consultation with relevant Ministers, guidelines for establishment of the machinery for the formalization, supervision, suspension or termination of negotiations with other governments and international organizations. According to Bangkok Declaration 1967, external relations between ASEAN and third countries and international organizations should have the approval of the Foreign Ministers. The Chairman of the ASEAN Standing Committee will be authorized to sign all agreements reached between ASEAN and third parties. The ASEAN Charter has provided general rules on ASEAN external relation and under Article 41 (7) prescribes that ASEAN may conclude agreements with countries or sub-regional, regional and international organizations and institutions. The procedures for concluding such agreements shall be prescribed by the ASEAN Coordinating Council in consultation with the ASEAN Community Councils. Such procedures are still in intensive labour.

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i. Relation between Members and Treaties Concluded by ASEAN At initial stage, and even until recently, confusion has come to fore with regard to status of treaties6 concluded by the so-called ASEAN. In this regard, one must be cautious in dealing with the term ASEAN. The term of ASEAN in legal terms as a distinct entity detached from its members is always confused with ASEAN as a merely collective noun for all the members, which is frequently used in many ASEAN documents and writings. The practices of ASEAN in concluding treaties with other subjects of international law shows that the term ASEAN tends to be interpreted as a collective noun of all the members instead of a distinct entity. It could be seen for instance in the Cooperation Agreement between the Member Countries of ASEAN and the EEC, 7 March 1980. The agreement was signed by all foreign ministers of ASEAN member states on one part and by President in office of the Council of the EC on the other part. Thus, it is not a bilateral agreement between ASEAN as an organization,- which has been incorrectly claimed as the first agreement that it has signed as an international entity,- but merely a multilateral between individual members of ASEAN and the EEC.

6

The term treaties in this paper will cover all formal instruments concluded by ASEAN, such as agreements, MOUs, Arrangements, Exchange of Notes, and other designations without making any distinction whether they are properly regarded as treaties for the purpose of the Vienna Convention on the Law of Treaties.

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Another example could also be found in the exchange of letters constituting an agreement establishing the Sectoral Dialogue between ASEAN and the Republic of Korea. On one part this agreement was signed by Minister of Foreign Affairs of the Republic of Korea and on the other part by Minister for Foreign Affairs of Indonesia as Chairman of the ASEAN Standing Committee. Looking at this participation clause alone, one might assume that this agreement is concluded by ASEAN as a proper distinct entity in pursuant to the rules of ASEAN. However, from the terms of the agreement, it reveals that ASEAN in this case is merely a collective noun of all the members since the word ASEAN refers to ASEAN member countries. The Chairman of ASEAN Standing Committee signed the letter on behalf of ASEAN member countries instead of ASEAN. In this instance ASEAN is not a party and no legal effects devolve upon it. One may be questioning whether ASEAN as a distinct entity could conclude that particular treaty. The answer is obviously negative. A dialogue between ASEAN and a third country is not a bilateral relation between ASEAN as a distinct entity and the country concerned, but a kind of multilateral relations in which the member states of ASEAN individually involve. Thus, ASEAN as a distinct entity was lacking capacity to deal with such a relation on its own behalf. The term ASEAN as is envisaged in the Charter may pose an already long confusion and appeared to be so when it was being discussed in the various discussions in

the High

Legal Expert Group for the

implementation of Article 41 (7) of the Charter. This Article only states

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that ASEAN may conclude agreements with countries or sub-regional, regional and international organizations and institutions. However, it does not define the notion of ASEAN in terms of whether it is a distinct organization or simply a joint collective of Member States. From the legal perspective, ASEAN external relations under Article 47 (1) shall be distinguished into two different legal characters: a. The relations between ASEAN member countries and a third party where the status of each member country is as an independent subject of international law. In this regard, the term ASEAN is only used to refer to each member country as collective members. b. The relations between ASEAN as a subject of international law, as a distinct subject separated from its members with a third party. In this regard, member countries of ASEAN are in the position as components of the ASEAN‘s organs (Standing Committee, Committee, etc.).

On the first category, with regard to the relations between ASEAN as collective members with a third party, it is often stated that ―ASEAN has made numerous international agreements with other countries or international organizations‖. However, when such agreements use the term ASEAN, it will refer to each member country separately and forming as a collective group without necessarily relinquishing its independent status. This is reflected in the participation clause of such agreements

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where all members are, individually, required to put their respective signatures in the agreement. For example, in the Cooperation Agreement between the Member Countries of ASEAN and the EEC, 7 March 1980, all members of ASEAN individually signed the agreement and for the EEC, on the other hand, it was signed by its authorized representative, i.e. President of the Council. In this agreement, each individual member country entered into contractual agreement with EEC as an international organization. In this case, ASEAN is not an organization as a distinct subject independently from its members. It is a logical consequence of the fact where the scope of the agreement is not within ASEAN‘s competence as an independent international organization, but rests on the authorities of the member countries. On the second category, ASEAN has made numerous agreements in its capacity as a distinct subject separated from its members, in which the term ASEAN Secretariat is commonly used. The agreements made by ASEAN as an international organization and on its own behalf are, among others, as follows: a. The Agreement relating to the Privileges and Immunities of the ASEAN Secretariat, 20 January 1979, between ASEAN Secretariat and Indonesia. b. Agreement of Cooperation between the Association of Southeast Asian Nations (ASEAN) and the United Nations Educational, Scientific

and

September 1998.

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Cultural

Organization

(UNESCO),

Jakarta

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c. The Agreement on the Use and Maintenance of the Premises of the ASEAN Secretariat, 15th March 1996, between ASEAN Secretariat and Indonesia. d. Memorandum of Understanding between the Secretariat of the Association of Southeast Asian Nations (ASEAN) and the Secretariat of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP Secretariat). e. Arrangement between the ASEAN Secretariat and the United States Patent and Trademark Office (USPTO) on Cooperation in the Field of Intellectual Rights, 19th April 2005. f.

Memorandum of Understanding between the Secretariat of the Association of Southeast Asian Nations (ASEAN) and the Shanghai Cooperation Organization (SCO), 21st April 2005.

g. Memorandum

of

Understanding

for

Administrative

Arrangements, this memorandum of understanding (MoU) will form the basis of Cooperation between the Association of Southeast Asian Nations Secretariat and Asian Development Bank (24th August 2006).

In the aforementioned agreements, ASEAN Secretariat acted on its own behalf as an independent legal subject, separated from its member countries. The Secretary General of ASEAN signed the agreements. This position is a logical consequence to the fact that the substance of the agreements is within the scope the ASEAN Secretariat competence.

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Therefore, from the execution of such agreements shall not arise any obligation to its member countries, as they are not parties to the agreements. Two agreements that have been concluded by ASEAN on its behalf are worth noting, i.e. the Agreement relating to the Privileges and Immunities of the ASEAN Secretariat, 20 January 1979 and the Agreement on the Use and Maintenance of the Premises of the ASEAN Secretariat, 25 November 1981. The parties to the respective agreements are on one part ASEAN as a distinct entity detached from its members and, on the other part, Indonesia. Although Indonesia is a member, its status vis a vis ASEAN in this agreement is a distinct subject separated from the personality of ASEAN. The participation clause of the agreements clearly indicates that Secretary General ASEAN who signed the agreements represents ASEAN per se not that of member states. With regard to those agreements, ASEAN has a capacity to perform all rights and obligations without necessarily being supported by its member states. The matters covered by the agreements are concerning administrative and diplomatic matters which are exclusively under competence of ASEAN as a distinct entity. They are inter alia juridical capacity of the Secretariat within Indonesian territory and the enjoyment of privileges and immunities by the Secretary General and the staff including the premises of the Secretariat. These practices have shown that the relation between members and treaties concluded by ASEAN as a distinct organization is merely ―third

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party‖ in the sense that they are not automatically bound by it. This legal construction is compatible with the principle enshrined in the 1986 Vienna Convention on the Law of Treaties concluded by International Organizations. The ILC in preparing that Convention was encountered with the question of effects of treaties concluded by an organization on its member states, which should be relevant to be regulated under the present Convention. The Commission came out with a proposal which was then under the Draft Article became Article 36 bis: Article 36 bis Obligations and rights arising for States members of an international organization from a treaty to which it is a party. Obligations and rights arise for States members of an international organization from the provisions of a treaty to which that organization is a party when the parties to the treaty intend those provisions to be the means of establishing such obligations and according such rights and have defined their conditions and effects in the treaty or have otherwise agreed thereon, and if: (a) the States members of the organization, by virtue of the constituent instrument of that organization or otherwise, have unanimously agreed to be bound by the said provisions of the treaty; and (b) the assent of the States members of the organization to be bound by the relevant provisions of the treaty has been duly brought to the knowledge of the negotiating States and negotiating organizations.

The proposed draft became a most difficult part during the negotiation in the Diplomatic Conference and was finally being rejected. The proposed article was widely claimed as compatible solely in the light of the case of the European Economic Community. Most views were in favor of a default rule that member states should be third parties vis a vis

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treaties concluded by international organizations to which they are members.7 Finally, the Conference provided only a saving-clause (Article 74, para. 3), which states that [t]he provisions of the present Convention shall not prejudge any question that may arise in regard to the establishment of obligations and rights for States members of an international organization under a treaty to which that organization is a party. The formulation of this saving clause received cautious reaction from many delegations by emphasizing that it should not be understood as allowing any possibility of a treaty concluded by an international organization producing any legal effects for States members of the organization which were not parties to the treaty, unless those States members expressly consented to accept the relevant provisions of the treaty.8 During the drafting exercise on Vienna Convention on the Law of Treaties by the ILC, an attempt had been made to enable a state or an organ on behalf of one or more states to conclude a treaty to be binding for those states concerned.9 Due to its complexity, the embryonic idea was immediately aborted and did not even reach the drafting stage of the ILC. The Commission left aside the question and considered it as a problem of

7

United Nations Conference on The Law of Treaties between States and International Organizations or between International Organizations, Vienna, 18 February-21 March 1986, Official Records, Volume I, at 174. 8 United Nations Conference on The Law of Treaties between States and International Organizations or between International Organizations, Vienna, 18 February-21 March 1986, Official Records, Volume I, at 19. 9 Yearbook of the International Law Commission, 1964, Vol. II, at 16.

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representation. The representation of one State by another State or by an international organization or, more generally, of one subject of law by another subject of law probably gives rise to complex problems of treaty law. However, when it dealt with the draft of the Vienna Convention on the Law of Treaties concluded by International Organizations (the then Vienna Convention of 1986) a similar question came out again. It was expected that the Commission refrained, as did the United Nations Conference on the Law of Treaties, from dealing with that question. If the Vienna Convention of 1969 remained silent on the representation of the corporate body by another corporate body, it is reasonable to adopt the same position as regards treaties to which an international organization is a party.10 It appeared however that it was not merely a question of representation which it could easily set aside. The delicate problem facing the conference has apparently posed the similar confusion to the ASEAN practices. ASEAN practices have also shown a ―peculiar‖ model, which is not compatible with the principle of ―third party‖ status of its members. There are several agreements which were binding all members with a third party, concluded by the Secretary General of ASEAN, such as the following:

10

Yearbook of the International Law Commission, 1977, vol. II, Part One, at 122.

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a. ASEAN – China Memorandum of Understanding on Cultural Cooperation (Bangkok 3rd August 2005), signed by the Secretary General of ASEAN; b. Memorandum of Cooperation between the Department of Commerce of the United States of America and the Association of Southeast Asian Nations (ASEAN) Secretariat concerning Cooperation on Trade Related Standards and Conformance Issues (5th April 2001), signed by the Secretary General of ASEAN; c. Memorandum of Understanding between the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Ministry of Agriculture of the People‘s Republic of China on Agricultural Cooperation (Phnom Penh, 2nd November 2002), signed by the Secretary General of ASEAN; d. Memorandum of Understanding between the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Government of the People‘s Republic of China on Cooperation in the Field of Non-traditional Security Issues (Bangkok, 10th January 2004), signed by the Secretary General of ASEAN; e. Memorandum of Understanding between the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Government of the People‘s Republic of China on Transport Cooperation (Vientiane, 27nd November 2004), signed by the Secretary General of ASEAN;

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f.

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Memorandum of Understanding between the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Ministry of Agriculture of the People‘s Republic of China on Agricultural Cooperation (Cebu, 14th January 2007), signed by the Secretary General of ASEAN;

These agreements pose various legal questions and perhaps reflect two legal scenarios. Could it be presumed that ASEAN as a distinct organization is entitled to bind its members into a treaty concluded by it? Are the scopes of cooperation contained in the agreements exclusively under ASEAN competence as a distinct personality? Two scenarios might be relevant, first that ASEAN in this regard is a distinct personality performing competences that have been transferred to it, or secondly, ASEAN is merely acting on behalf of its members for which ASEAN itself as a distinct personality is not bound. The second scenario is a question of representation, which will be discussed, in the next part. Whatever scenario may apply, these agreements are not legally compatible to what has been cautiously envisaged by the Vienna Convention of 1986. Article 36 bis proposed at the Vienna Conference was claimed as fitting to the supranational model such European Union, where some sovereign competences have been transferred to the organization. Even under the EU Law, the Union cannot conclude treaties which competences are not exclusively under it. In the event where competence is shared between the organization and its members, both can

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become parties. Such an agreement is known, in the EC model, as a ―mixed agreement‖.11 In relation to ASEAN capacity to conclude treaties, a legal question has been put forward to the 23rd ASEAN Standing Committee Meeting 1991, with respect to the possibility of ASEAN to accede to the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. The meeting rightly holds that ASEAN did not possess sufficient legal capacity to accede to that Protocol since ASEAN has no competence in respect of matters governed by the Convention or its protocol. ASEAN per se could not carry out general obligations as provided for within Art. 2 of the Convention since those matters fall into competence of respective member states and such competence is never being transferred to ASEAN. Within the legal principle that was finally adopted under the current law of treaties, one may consider that the listed agreements are peculiar on some basic legal reasons. First, it is lacking procedural requirement for the Vienna Convention 1969 principle of ―consent to be bound by a treaty‖ since it is not the member itself establishing its consent but another third party. It is worth taking into account that international law does not recognize the practices where a state can delegate its treaty

11

Verwey, Delano, The European Community, the European Union and the International Law of Treaties, Asser Press, 2004, p. 155-208 and Keefe, David and Schermers, Henry G, Mixed Agreements, Netherlands, 1984.

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making capacity to another subjects of international law to act for and on behalf of that state to establish consent to be bound by an international agreement notwithstanding the question of ―representation‖ which will be discussed later. Second, the treaty making capacity is an integrated part of state sovereignty and the exclusive domain of national authority. Even the European Commission (EC) practices, which have become supranational and integrated, it can only sign agreements in which its members have transferred the competence to the EC Council. It is obvious that in concluding such legally incompatible ASEAN agreements as listed-above, the Secretary General of ASEAN and the member states do not intend to perceive ASEAN a supranational model, which can bind the members. It is highly presumed that such practices could happen due to a lack of legal awareness with regard to the meaning of ASEAN as a distinct personality and be exacerbated by the spirit of ―ASEAN Way‖, which tends to sacrifice the legal premises for political consensus and ASEAN conveniences.

ii. The Problem of Representation The problem of representation is a subject of debate under the Law of Treaties. The question arises whether a subject of international law may act on behalf of other subjects to conclude a treaty for the latter. The question appears to be closely related, albeit distinguishable, to the problem of the status of member states vis a vis treaties concluded by their

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organization in a way that the organization may be construed as acting on behalf of its members. This question of representation had been discussed by the ILC in drafting the Vienna Convention on the Law of Treaties of 1969. The Commission finally left aside the question and considered it as a problem of representation rather than the Law of Treaties. The representation of one State by another State or by an international organization or, more generally, of one subject of law by another subject of law probably gives rise to complex problems of treaty law. The question of representation, by which one binds another states to a treaty, becomes complex and untenable in the current globalization. The question of representation is not only complex at international level but also at national/constitutional level. Democratization at national level under globalization is characterized by the increasing independent powers invested with the various organs of a state, coupled with the increasing role of individuals vis a vis their state, has affected the right of legation and posed a problem of democratic accountability of any treaty concluded by a state. The separation of powers, i.e. executive, legislative, judicative has become strict so that it raises question as to whether the executive can represent legislative and judicative interest with relations to other states. Under these circumstances, treaty making power as traditionally invested with executive branch is under intensive question and states become cautious in defining and regulating the executive treaty making exercises.

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Indonesia under democratization and constitutional consolidation would be encountered with constitutional difficulty with the question of representation. The sovereignty principle on ―consent of state‖ would be at stake when representation takes place. Indonesian Constitution 1945 and the Law No. 24 Year 2000 on Treaties have not paved the way for another state or international organization to bind Indonesia to a treaty. There is no precedent under Indonesian practices where government submits to a parliament for ratification a treaty signed by another sovereign power to be binding upon Indonesia. None even imagines that it may happen in the current constitutional context. An agreement signed by the Secretary General of ASEAN on behalf of member countries, in principle, is not binding member countries on the basis that the requirement of ―consent to be bound by a treaty‖ by Indonesia in accordance with Article 11 of Vienna Convention 1969 on the Law of Treaties and the Law of 24 Year 2000 has not been fulfilled. In this case there is no expressed consent from its individual members to be bound to the agreement. The very fact that its members are said to having authorized the Secretary General of ASEAN to do so cannot be invoked as legally sufficient for establishing consent to be bound by a treaty by the member state, as required by the Vienna Convention. Under Indonesian law, the problem of ―Full Power‖ for expressing the consent of the State to be bound by a treaty arises. If an international agreement signed by the Secretary General of ASEAN and assumed that it is binding for Indonesia, it will be construed that the Secretary General

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has obtained a full power from Indonesia. Full power is a constitutional power and only presented to the national officials. Granting full power to an international organization is not an accepted practice according to Indonesian Law of Treaties. Based on these principles, a country cannot ratify a legal act conducted by another subject of international law. In this regard, for an agreement, which is signed by the Secretary General of ASEAN or an appointed official of a member country and requires ratification, the members are not in a legal position to ratify the foresaid agreement. As ratification means ―to confirm the conduct of its representative who is signing an agreement‖, it would be peculiar if member states, through their national mechanism, ratify the conduct of the foreign officials. Further consequence is that a member state as a state party does not have the direct competent authority to conduct a legal act in relation to the agreement

itself,

such

as

invalidity;

termination;

suspension;

amendments; and modification. Such legal acts can only and have to be conducted through and under the approval of the Secretary General as the signatory party. ASEAN has abundant practices concerning the problematic situation. Adding to the agreements listed-above, one may look at the Memorandum of Understanding between the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Government of Australia on the ASEAN - Australia Economic Cooperation Program (AAECP) Phase III (Bangkok, 27th July

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1994). For ASEAN signed by H.E. Surin Pitsuwan, Deputy Minister of Foreign Affairs, Acting Minister of Foreign Affairs of Thailand. On the contrary, ASEAN has also experienced a situation where member states assumed representation despite ASEAN as a distinct personality not really requiring it. In 1985 ASEAN was authorized to conclude agreements on cultural matters with UNDP on ASEAN Training Course for Drug Rehabilitation Professionals and on ASEAN Law Enforcement Training Course. In this case ASEAN is assigned to conclude those agreements but again not on its behalf but on behalf of its members. It only performs its task as coordinator and it is the members who implement the training courses. If one looks at the project documents on such ASEAN training courses, it might be agreed that, instead of its members, ASEAN per se could be a party to the agreements. It is firstly because the conclusion of those agreements are in accordance with the objectives of ASEAN as specified within Bangkok Declaration, thus, it has competence in respect of matters governed by the agreements, and secondly, ASEAN as an entity could undertake the programs as covered by the agreements without necessarily involving the personalities of its members.

C. ASEAN Treaty Making Power under ASEAN Charter and its Rules As indicated in the previous part, ASEAN Charter provides specific rules on treaty making power. It is prescribed by Article 41 (7) that the procedures for concluding such agreements shall be prescribed by the

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ASEAN Coordinating Council in consultation with the ASEAN Community Councils. The set of procedures is under negotiation by the High Legal Experts Group, which consists of legal officials from member states. From the Law of Treaties perspective, such procedures are tantamount to the rules of the organization as referred to by the Vienna Convention of 1986. The procedures are expected to make a clear distinction on the conclusion of agreements concluded by ASEAN as a distinct personality and those that are concluded by all ASEAN member states collectively. The critical issues worth exploring would be to what extent ASEAN may be entitled to conclude treaties on its own behalf. This is the problem of scope of competences to be conferred to ASEAN for it to be subject matters of treaties it concludes. There must be a clear rule and principle for ASEAN concerning the entitled subject matters, which are and not within its competences. At least there must be a component organ under ASEAN whose task is to determine whether or not a subject matter could be contained in a treaty concluded by ASEAN. The rule is necessary in order to ensure that ASEAN concludes a treaty containing matters within its competences, otherwise, it requires collateral participation from its members as envisaged by so called ―mixed agreements‖. It should cover the matter as required by 1986 Vienna Convention to be regulated by the rules of organization. The Convention emphasizes the determining role of the ―rules of the organization‖ to govern the acts of organization in concluding a treaty. The rules mean, in particular, the

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constituent instruments, decisions and resolutions adopted in accordance with them, and established practice of the organization. The Convention makes references to the rules of the organizations in dealing with some aspects of treaty making, which shall be provided by ASEAN rules, among others: 1. The use of terms in the present Convention are without prejudice to the use of those terms or to the meanings which may be given to them in the internal law of any State or in the rules of any international organization. The ASEAN Charter uses the term ―agreements‖ instead of ―treaties‖ and therefore should not affect the validity of the instruments under such different term. 2. The capacity of an international organization to conclude treaties. It prescribes a regime that governs what subject matters that are within and beyond the scope of ASEAN Treaty making power. This particular issue is concerning power sharing between member states and the organization, which will determine the scope of competence of ASEAN in making treaties. Such competence is normally governed by constitutional provisions of the organizations. It appears that ASEAN Charter provides no provision on this competence and therefore an implied power might be presumed in such manner in accordance with the purposes and objectives of ASEAN. 3. Full powers.

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4. Act of Organization to express its consent to be bound by a treaty in the form of Signature, Act of Formal Confirmation (corresponding to that of ratification by a State), Accession, Accession and Acceptance. 5. Acceptance to Treaties providing for rights and obligations for third states or third organizations. 6. Amendments of a provision of a treaty. 7. Notifications with respect to invalidity, termination, withdrawal from or suspension of the operation of a treaty. 8. The appointment of arbitrators or conciliators under dispute settlement mechanism.

As ASEAN has grown into a mature rule-based organization on the basis of its Charter and having in mind that its role is becoming expansive at international level, it is inevitable that ASEAN as a subject of international law should be an international law-abiding organization. It this regard, international legal norms governing the relations between and by international organization shall be respected. Therefore, compatibility of ASEAN rules with the international norms becomes necessary.

Daftar Pustaka Bowett, D.W, The Law of International Institutions, Stevens, 1982. Cf. Holloway, Kaye, Modern Trends in Treaty Law, London, Stevens & Sons, 1967, Chesterman, Simon, Does Asean Exist? The Association Of Southeast Asian Nations as An International Legal Person, (2008) 12 SYBIL 199-211, Dale, W, 'Is the Commonwealth an International Organization?', (1982) 31 ICLQ 451

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Elias, T.O., The Modern Law of Treaties, Leiden, A.W. Sijthoff, 1974, Fifield, Russell H, National and Regional Interests in ASEAN, Singapore, ISEAS. G. E. do Nascimento e Silva, “The 1986 Vienna Convention and the Treaty-Making Power of International Organizations”, German Yearbook of International Law, vol. 29, 1986, G. Gaja, “A „New‟ Vienna Convention on Treaties Between States and International Organizations or Between International Organizations: A Critical Commentary”, British Yearbook of International Law, vol. 58, 1987, Greig, D.W., International Law, London, Butterworth, 1970, H. Isak & G. Loibl, “United Nations Conference on the Law of Treaties Between States and International Organizations or Between International Organizations”, Österreichische Zeitschrift für öffentliches Recht und Völkerrecht, vol. 38, 1987, Indorf, Hans H, Impediments to Regionalism in Southeast Asia, Singapore, ISEAS, 1984, Indorf, Hans. H, ASEAN: Problems and Prospects, ISEAS, 1975, p. 9. K. Zemanek (ed.), Agreements of International Organizations and the Vienna Convention on the Law of Treaties, Vienna, Springer Verlag, 1971 (Österreichische Zeitschrift für öffentliches Recht, Supplementum 1). K. Zemanek, “Agreements Concluded by International Organizations and the Vienna Convention on the Law of Treaties”, University of Toledo Law Review, vol. 89, 1971, Keefe, David and Schermers, Henry G, Mixed Agreements, Netherlands, 1984 Mann, F.A., 'Reflection on a Commercial Law of Nations', (1957) XXXIII BYIL 20, O'Connell, D.P.O, International Law, London, Stevens, Second Ed., 1970, pp. 199-200. Okeke, Chris N, Controversial Subjects of Contemporary International Law, Rotterdam, University Press, 1974, Rama-Montaldo, 'International Legal Personality and Implied Powers of International Organizations', (1970) BYIL, XLIV, 111, Report of the ILC in (1967) 61 AJIL 248, Report of the ILC' in (1967) 61 AJIL 248, p. 288. Reuter, Paul, International Institutions, George Allen & Unwin Ltd, London, 1958, Reuter, Paul, Introduction to the Law of Treaties, translated by Jose Mico and Peter Haggenmacher, London, Pinter Publisher, 1989, Schermers, Henry. G, International Institutional Law, Netherlands, Sijthoff & Noordhoff, 1980, Seyersted, Finn, 'Applicable Law in relations between Intergovernmental Organizations and Private Parties', (1967) III RdC 122. Simmonds, K.R., 'The Evolution of the External Relations Law of the European Economic Community', (1979) ICLQ 28, Sinclair, I, The Vienna Convention on the Law of Treaties, Manchester, University Press, Second Ed.

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Sukrasep, Vinita, ASEAN in International Relations, Bangkok, Institute of Security and International Studies, 1989, Thammes, A.J.P, 'Decision of International Organs as a Source of International Law', (1958) II RdC 261, Verwey, Delano, The European Community,the European Union and the International Law of Treaties, Asser Press, 2004, Von Glahn, Gerhard, Law among Nations, New York, MacMillan, Third Ed., 1976.

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THE LEGAL IMPLICATION OF THE VOLCANIC ASH CLOUD CONTINGENCY PLAN Adrianus Adityo Vito Ramon

Abstrak Beberapa insiden penerbangan yang disebabkan oleh awan panas gunung berapi telah menimbulkan dampak negatif terhadap penerbangan internasional, misalnya dalam kasus letusan Gunung Galunggung, Gunung Redoubt, Gunung Pinatubo, dan Gunung Eyjafjallajökull. Sehubungan dengan hal tersebut, komunitas internasional telah mengambil langkah-langkah yang diperlukan dan menyusun berbagai contingency plan untuk menanggulangi insiden serupa serta untuk memastikan keselamatan penerbangan. Tulisan ini akan menganalisis implikasi hukum atas contingency plan menghadapi awan panas gunung berapi dalam kaitannya dengan hak dan kewajiban para pemangku kepentingan dalam industri penerbangan internasional. Selain itu, tulisan ini juga akan memberikan analisa umum mengenai contingency plan yang ada saat ini, dari tingkat multilateral, kawasan dan nasional, serta memberikan rekomendasi bagi penyusunan contingency plan yang lebih baik. Kata kunci: awan abu vulkanis, rencana tanggap darurat, ICAO, keselamatan penerbangan, tanggung jawab, Konvensi Chicago. Abstract Several aviation incidents caused by hot cloud of volcanic ash has brought about negative effects on international aviation, such as the eruption of Mount Galunggung, Mount Redoubt, Mount Pinatubo, and Mount Eyjafjallajökull. Therefore, international community has taken necessary measures to set up various contingency plans to overcome such incidents and to assure the aviation safety. This paper will analyze legal implication on contingency plan in overcoming hot cloud of volcanic ash related to the rights and obligations of the stakeholders in international aviation industry. Moreover, this paper

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will generally analyze prevailing contingency plan as well, at multilateral, regional, and national level; and will suggest recommendations on how to make a good contingency plan. Keywords: volcanic ash cloud, contingency plan, ICAO, aviation safety, liability, Chicago Convention

I.

INTRODUCTION

On 24 June 1982, a British Airways flight BA009 was flying out from London heading for New Zealand with a stopover in Kuala Lumpur and Perth.12 The flight was a Boeing 747-200 (G-BDXH) aircraft13 piloted by Captain Eric Moody14 who took-over the flight in Kuala Lumpur.15 The flight brought 247 passengers and 15 crews.16 At approximately 240 miles south-east of Jakarta,17 while cruising at an altitude of 37,000 feet, passing the Indonesian island of Java, when suddenly the flight encountered the St. Elmo fire18 which was resulted from ‗a discharge of static electricity.‘19

* The views and opinions expressed in this article are those of the author. 12 Zoe Brennan, The Story of BA flight 009 and the Words Every Passenger Dreads. (29 January 2007) Daily Mail . 13 Accident Description, Aviation Safety Network . 14 Zoe Brennan, Above n 1. 15 Ibid. 16 Accident Description, Above n 2. 17 Ibid. 18 When Volcanic Ash Stopped a Jumbo at 37,000ft (15 April 2010) BBC News Magazine < http://news.bbc.co.uk/2/hi/uk_news/magazine/8622099.stm>. 19 Ibid.

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Consequently, all four engines of the aircraft failed abruptly20 and accordingly, the aircraft glide downward to 12,000 feet.21 Fortunately, the flight crew was able to restart three engines back.22 That was enough to divert the flight to Jakarta where it made an emergency landing.23 The aforementioned descriptions, arguably, illustrates the first recorded incident of the interferences of volcanic ash cloud towards the aviation safety. Another incident was recorded on 15 December 1989, involving a KLM flight KL867 from Amsterdam to Tokyo with a scheduled stopover in Anchorage.24 The Flight was Boeing 747-400 (PH-BFC)25 aircraft piloted by Captain Karl van der Elst.26 There were 231 passengers and 14 crews onboard the flight.27 Around 75 miles northwest of Anchorage, the flight flew through volcanic ash clouds from the eruption of Mount Redoubt.28 Consequently, all four engines of the aircraft were suddenly failed29 and

20

Accident Description, Above n 2. When Volcanic Ash Stopped a Jumbo at 37,000ft, Above n 6. 22 Ibid. 23 Ibid. 24 Richard Witkin, Jet Lands Safely After Engines Stop in Flight Through Volcanic Ash (16 December 1989) The New York Times < http://www.nytimes.com/1989/12/16/us/jetlands-safely-after-engines-stop-in-flight-through-volcanic-ash.html>. 25 Accident Description, Aviation Safety Network . 26 Larry Campbell, A look back at Alaska volcano’s near-downing of a 747 (18 April 2010) Herald Net . 27 Accident Description, Above n 14. 28 Richard Witkin, Above n 13. 29 Ibid. 21

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the aircraft descended rapidly leaving 25,000 feet to 13,000 feet in a mere 12 minutes.30 It was also reported that there was smoke in the cabin as well.31 Fortunately, similar with the previous incident, the flights crews succeed in reviving all engines32 and land the aircraft safely in Anchorage.33 During the after-flight check of flight BA009, it was found that microscopic particle of the eruption of volcano of Mount Galunggung, had damaged essential parts of the engine components, in all four engines.34 Similarly, the volcanic ash cloud had also inflicted engines failures on the KLM flight.35 A closer analysis reveals that both aircrafts suffered damages from the ‗sandblast‘ of the volcanic ash including in the windshield as well as in the avionics system of the aircraft.36 Both incidents had arguably highlighted the dangerous consequences of the volcanic ash cloud may cause for aviation safety. As a result, the international community in multilateral, regional as well as domestic level had established various contingency plans to ensure the safety of aviation from the damaging effect of volcanic ash cloud. Those plans may vary from a mere warning in the notice to airman (NOTAM) to ultimately

30

Larry Campbel, Above n 15. Richard Witkin, Above n 13. 32 Ibid. 33 Accident Description, Above n 14. 34 When Volcanic Ash Stopped a Jumbo at 37,000ft, Above n 6. 35 Richard Witkin, Above n 13. 36 Ibid. 31

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shutdown an entire airspace. All of those actions will obviously implicated legal consequences for the entire stakeholder involved in the aviation industry. This research will analyse the legal implications of the volcanic ash cloud contingency plan for all stakeholders in the aviation industry. It will provide a general analysis of the existing contingency plans. The research will first discuss the negative impact of volcanic ash cloud towards aviation safety. It will analyse the process of the volcano eruption, the materials which comprised volcanic ash cloud and its damaging effects towards aircraft. It will subsequently see various existing ash cloud contingency plans. Finally, it will then analyse the legal implications of the contingency plans vis a vis various stakeholders in the aviation industry.

II.

THE IMPACT OF THE VOLCANIC ASH CLOUD FOR INTERNATIONAL AVIATION

A volcano is a mountain which assembled ‗around a vent that connects with reservoirs of molten rock below the surface of the Earth.‘37 Its activity is resulted from ‗the buoyancy and gas pressure‘ which push the molten rock upward and inflicts an event known as volcano

37

Robert I Tilling, Volcanoes (12 December 1999) United States Geological Survey .

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eruption.38 In the event of a volcano eruption, the pushed molten rock will be discharge from the crater ‗as non-explosive lava flows‘.39 Alternatively, the molten rock may also be projected into the air to certain altitude form the infamous volcanic ash cloud.40 There are approximately 1,500 active volcanoes around the world today.41 Five hundred among those volcanoes had been erupted at least once in history42 with an average of fifty five to sixty volcanic eruptions annually.43 The majority of those volcanos are located along the edge of the continental plate forming a continuous string of line known as the volcanic ring of fire.44

38

Ibid. Ibid. 40 Ibid. 41 Volcanoes (2 December 2009) European Space Agency . 42 Volcano Environments (5 February 1997) United States Geological Survey . 43 Jos van Geffen, et al, „An Alert System for Volcanic SO2 Emissions Using Satellite Measurements‟ (Paper presented at 2009 EUMETSAT Meteorological Satellite Conference, Bath, England, 21 – 25 September 2009) 3. 44 Ibid. 39

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45

Figure 1 the location of world volcanoes – in red

There are several types of volcanic eruption. Among those types, the aviation safety might arguably most impacted by the phreatic eruption which contains water in-mixture with lave and the plinian type of eruption which potentially projected a large amount of volcanic ash cloud into the air.46 Additionally, vulcanologist had also developed the Volcanic Explosivity Index (VEI) to determine the magnitude of the volcanic eruption.47 It has nine categories ranging from VEI 0 to VEI 8.48

45

Active Volcanoes and Plate Tectonics, "Hot Spots" and the "Ring of Fire" (1 February 2003) United States Geological Survey . 46 John Watson, Types of Volcanic Eruptions (5 February 1997) United States Geological Survey . 47 International Civil Aviation Organization (ICAO), Manual on Volcanic Ash, Radioactive Material and Toxic Chemical Clouds 2nd ed, (2007) International Civil

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The volcanic ash cloud produced by the eruption may also comprised various shapes and sizes of sharp silicates glasses,49 feldspar, quartz, pyroxene,50 aluminium, iron, calcium, and sodium51 which are abrasive and accordingly may imposed considerable damages towards the aircraft.52 Furthermore, the volcanic ash cloud also contain various gasses includes water vapour, chlorine, hydrogen sulphide, nitrogen oxides53 as well as sulphur dioxide (SO2) gas which very dangerous to the human health54 and extremely corrosive toward metal compound.55 However, there is a continuing disagreement on the precise measurement and composition as well as the actual contact time for the aforementioned material might be deemed to be hazardous towards aviation safety.56 During a volcanic eruption, the eruption column may reached to the cruising altitudes of an aircraft57 and forms the umbrella of the ash

Aviation Organization Doc 9691–AN/954 , I-1-1 [1.1.1]. 48 Ibid, I-1-3. 49 Ibid, I-2-1 [2.1.1]. 50 Thomas J Casadevall, „Volcanic Hazards and Aviation Safety: Lesson from Past Decade‟ [1993] (May) Flight Safety Digest 1, 4. 51 ICAO, Above n 36 I-2-1 [2.1.1]. 52 Ibid. 53 Ibid. 54 Jos van Geffen, et al, Above n 32, 3. 55 ICAO, Above n 36, I-2-2 [2.1.4]. 56 Karsten Theil, „What are the safety regulations regarding volcanic ash and why?‟ (Paper presented at Atlantic Conference on Eyjafjallajökull and Aviation, Keflavik, Iceland, 15 and 16 September 2010), 11. 57 ICAO, Above n 36, I-2-3 [2.2.1.1].

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plumes which comprised the early stage of the volcanic ash clouds.58 The ash plumes in the umbrella parts of the eruption column will then travel and disperse into various altitudes and directions, subject to the current weather conditions, bringing various volcanic materials and gasses.59 There were also evidences of ‗electrical activities‘ inside the ash clouds column60 manifested in the form of lightning and St. Elmo fire as seen in the BA009 incident. Umbrella

Eruption column

Figure 2 eruption column and umbrella

61

The negative consequences of the volcanic ash cloud towards aircraft are further categorized into several classifications. One of those categorized the stage of the materialization of the effects.62 There are effects which directly felt by the aircraft63 which include damages on the

58

Ibid, I-2-9 [2.4.1]. Ibid, I-2-10 [2.4.1]. 60 Ibid, I-2-9 [2.3.1]. 61 Ibid, I-2-5, Figure 2-4. 62 Thomas J Casadevall, Above n 39. 63 Ibid. 59

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windows, external navigational lights, air supply system and on the fuselage.64 The volcanic ashes may also intrude the air supply system of the aircraft and significantly danger the safety of the passengers and crews with polluted air.65 Another significant damage in these categories is engine failure from the erosion of the engine components and from the scrape of the engine component with the sharp volcanic material or from the massing of volcanic materials inside the engine and clog the flow of the engine parts.66 Other damages may not as obvious and might need some time until it become noticeable. The chemical composition of gasses in the volcanic ash clouds may potentially inflicted corrosion on various parts of the aircraft which need some time to occur.67 The corrosion may cause significant structural failures of the aircraft body. This type of damage requires a continuous check-up of the aircraft since the damages might only be reveal for sometime after the actual exposure. Another classification focussed on the severity of the volcanic ash cloud impact toward the aircraft which being categorized into six classes.68 It started from Class 0, the least severe of the impact until Class

64

Ibid. Ibid, 5. 66 Ibid. 67 Ibid. 68 ICAO, Above n 36, Appendix G-8. 65

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5, the most severe consequences.69 Class 0 marked with sulphuric odour in the cabin and ‗electrostatic discharge‘ usually in the form of St. Elmo‘s fire on the exterior without any considerable damage towards the aircraft.70 Class 1 is manifested in the form of ‗light dust in cabin‘ and the variation on the ‗exhaust gas temperature,‘.‘71 Class 2 sees the occurrence of ‗heavy cabin dust,‘ the intrusion of dusk into the air system, exterior damages, include abrasion, frosting or breaking of windows, minor flight instruments failures and the massing of ashes in the engines.72 Class 3 marked with the ‗vibration of engines,‘ a severe instruments failures, intrusion of ashes into the hydraulic system, and electrical failures.73 Class 4 is sees momentary engine failure which able to be revived.74 Class 5 is the most severe effect of volcanic ash. It sees ‗engine failure or other damage leading the aircraft to crash.‘75

69

Ibid. Ibid. 71 Ibid. 72 Ibid. 73 Ibid. 74 Ibid. 75 Ibid. 70

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The accumulation of the melted volcanic materials in the turbine

Figure 3 the damages on aircraft engine due to volcanic ash cloud

76

Looking at the examples provided in the introduction, both incidents arguably categorized as Class 4 incident. It was understood that the British Airways flight BA009 had experienced significant damages in various parts of the engines caused by extensive erosion and clogging of the volcanic materials into the engines system77 as well as considerable exterior damages, including the flight deck windshield and various parts of the fuselage.78 Likewise, the KLM flight had also endured various degrees of damages in its four engines which caused by the intrusion and

76

Airbus Flight Operations Briefing Notes Operating Environment Volcanic Ash Awareness‟ (September 2006) Airbus . 77 Thomas J Casadevall, Above n 39, 1. 78 Ibid.

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blockage of volcanic materials.79 Its fuselage also suffered considerably from the scrapes of the volcanic materials.80 From 1953 until 2009, there were 129 reported incidents of volcanic ash clouds encounter with aircraft.81 The data is gathered by the United States Geological Survey and shared to various related institution, including to the ICAO International Airways Volcano Watch Operations Group.82 Among those reported incidents, the majority, approximately 75% of all reported incidents, were categorized in Class 0 until Class 2 incidents.83 Fortunately, there is yet to be a Class 5 incident occurred.84 Additionally, volcanic ash clouds may also effected others element of the aviation industry. The Volcanic ash clouds may also have the potential to significantly undermine the operation of the airport.85 The

79

Ibid. Jos van Geffen, et al, Above n 32, 2. 81 Marianne Guffanti, T J Casadevall, and Karin Budding, Encounters of Aircraft with Volcanic Ash Clouds; A Compilation of Known Incidents, 1953–2009 (2010) U.S. Geological Survey Data Series 545 . 82 Overview of Database on Encounters of Aircraft with Volcanic Ash-Clouds. Fifth Meeting of the ICAO International Airways Volcano Watch Operations Group Agenda Item 5.4 Updating of the worldwide ash encounter database (including the model VAR) ICAO Doc IAVWOPSG/5-IP/10 15/1/10 (15-19 March 2010). 83 Marianne Guffanti, T J Casadevall, and Karin Budding, Encounters of Aircraft with Volcanic-Ash Clouds: An Overview, Department of Geological and Mining Engineering and Sciences, Michigan Technological University . 84 Ibid. 85 ICAO, Above n 36, I-5-1. 80

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Volcanic ashes may also cover the airport which accordingly deemed to be inoperable as seen during the eruption of Mt. Pinatubo.86 In conclusion, in spite of the slight disagreement on the actual composition and length contact time, there is a significant prove on the considerable negative effect of volcanic ash clouds towards aviation safety. Consequently, international community had taken necessary respond and established various contingency plans to mitigate the incidents and to ensure the safety of the aircraft. The responds had come from multiple sectors, started from an orchestrated multilateral effort under the auspices of the International Civil Aviation Organization (ICAO) to the regional and domestic level.

III.

THE VOLCANIC ASH CLOUD CONTINGENCY PLAN

Pursuant to the provision of the Chicago Convention on the authority of the ICAO to established an international standard on the safety of air navigation,87 the ICAO had prepare several instruments such as the Procedures of Air Navigation Services (PANS),88 which later expanded by the ICAO Air Navigation Commission by prepared an ‗interim guidelines,‘ and adopted by the ICAO council in March 1987, as an

86

Ibid, 1-5-2. Convention on International Civil Aviation, opened for signature 7 December 1944, 15 UNTS 295 (entered into force 4 April 1947), art. 28. 88 Procedures for Air Navigation Services Rules of the Air and Air Traffic Services, International Civil Aviation Organization (ICAO) Doc 4444-RAC/501. 87

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amendment to PANS.89 The ICAO also established the Manual for Aeronautical Meteorology Practice which focused on the meteorology aspects of the aviation.90 The PANS amendment, lead to the development of the ICAO International Airways Volcano Watch (IAVW)91 which established pursuant to the provisions of Annex 3-Meteorological Service for International Air Navigation92 and Annex 11-Air Traffic Service and Annex 15-Aeronautic Information Services of the Chicago Convention.93 The ICAO IAVW is mandated to coordinate the monitoring and subsequent dissemination of the information for the existence of volcanic ash clouds in atmosphere using information provided by various sources included the member states as well as other international organization.94

89

ICAO, Above n 36, iii-iv. ICAO Doc 8896. 91 ICAO, Above n 36, iii-iv. 92 Raúl Romero, International Airways Volcanoes Watch, International Civil Aviation Organization . 93 Karsten Theil, Above n 45, 13. 94 Raúl Romero, Above n 81. 90

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Figure 4 the flow of information in ICAO IAVW

95

The ICAO IAVW, had further designated nine regional Volcanic Ash Advisory Centre (VAAC) which pursuant to Annex 3, 3.5.1 of the Chicago Convention and in accordance to the regional air navigation agreement, would be conducting around the clock watch over the volcanic activities and its effect to the aviation world within its own designated regional area.96 The information gathered by VAAC would then be disseminated to all related stakeholders in this issues, included meteorological watch offices, others VAAC as well as airline companies.97

95

International Airways Volcano Watch (IAVW) of ICAO, International Civil Aviation Organization . 96 Ibid. 97 Raúl Romero, Above n 81.

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Figure 5 regional VAAC

98

Furthermore, to support the ICAO council functions in coordinating the flow of information within the ICAO IAVW, in developing the IAVW as well as in advising the ICAO with regards to the future of the IAVW, the ICAO established the ICAO IAVW Operation Group in 2002.99 It composed representatives from the nine and related international organization such as the International Air Transport Association, International Federation of Air Line Pilots‘ Associations, the International

98 99

Ibid. Ibid.

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Union of Geodesy and Geophysics, and the World Meteorological Organization.100 The ICAO IAVW arguably has two main functions. First, it monitored volcanic activities around the world using data from various sources, including volcanic observatories as well as real-time aircraft report.101 This function arguably serves as a pre-emptive function since it was activated before any actual volcanic eruption occurred. The second function is to disseminate warnings for any volcanic threat to the aviation safety.102 It also provide specific information with regard to the detail of the volcanic threat, inter alia the coverage area of the volcanic ash cloud, the altitude, the direction of its movement, as well as the composition of the ash cloud.103 This function arguably aimed to mitigate the volcanic incidents to prevent significant damages towards aviation safety. Additionally, another pertinent role of the ICAO IAVW is to provide check-list of procedures for various stakeholders, including the area control centre, international NOTAM office, meteorological watch office and for pilot in command of an aircraft, prior and during a volcanic ash cloud emergency.104

100

Ibid. Ibid. 102 Ibid. 103 Ibid. 104 Handbook on the International Airways Volcano Watch (IAVW) Operational Procedures and Contact List Second Edition-2004 ICAO Doc 9766-AN/968. 101

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The latest development for the ICAO plans occurred following the eruption of Mt. Eyjafjallajökull in Iceland on April – May 2010 when the ICAO established the International Volcanic Ash Task Force (IVATF) as an interim group specifically aimed to evaluate the performance of various contingency plans in mitigating the Eyjafjallajökull eruption as well as to analyse the necessary revision and development to the plans.105 In addition to the aforementioned ICAO multilateral framework, several ICAO Regions, such as the European (EUR) and North Atlantic (NAT) as well as Caribbean (CAR) Regions, had also developed its own contingency plan which arguably has a more technical feature compared to the ICAO multilateral standard.106 The ICAO EUR and NAT contingency plan distinguished the respond into three different phases, ‗alerting phase‘ which focussed on the ‗initial responds‘ in the event of an imminent volcanic emergency, ‗reactive phase‘ when the volcanic emergency started, and ‗proactive phase‘ which commenced after the issuance of ‗the first Volcanic Ash Advisory and Volcanic Ash Graphic.‘107

105

Composition and Terms of Reference of the International Volcanic Ash Task Force, ICAO . 106 International Volcanic Ash Task Force First Meeting Agenda Item 4.1 ICAO Doc IVATF/1-DP/4 (29/7/10), [1.1.1]. 107 International Civil Aviation Organization Volcanic Ash Contingency Plan EUR and NAT Regions EUR Doc 019 NAT Doc 006, Part II (December 2010), 2-3.

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The CAR contingency plan also has three different phases.108 Slightly different, CAR contingency plan is divided into ‗strategic phase, pretactical, and tactical phase‘ albeit the similarity of the provisions of both plans.109 Other regional organizations such as the European Aviation Safety Agency had also take a more coordinative role and emphasises on the support for the dissemination of the information, as pre-emptive measure, and warning, as mitigating measure, of any volcanic emergency.110 They would then rely on the individual member countries to implement the necessary mitigating action towards the volcanic ash cloud emergency as also mandated by the ICAO contingency plans.111 Thus, notwithstanding to the aforementioned multilateral as well as regional contingency plans, it is fair to suggest that the contingency plans of a particular countries are, actually, acted as the spearhead for the orchestrated contingency plan to address the danger of volcanic ash cloud towards aviation safety since the multilateral and regional plans need to

108

Regional Caribbean Contingency Procedures for Volcanic Ash, International Civil Aviation Organization North American, Central American, and Caribbean Regional Office . 109 Ibid. 110 Flight in Airspace with contamination of Volcanic Ash, EASA Safety Information Bulletin SIB No.: 2010-17R4 (24 May 2011). 111 Alberto Alemanno, „The European Regulatory Response to the Volcanic Ash Crisis between Fragmentation and Integration‟ (2010) 2 European Journal of Risk Regulation 110, 104.

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be adapted by the national contingency plans. These situations may arguably be resulted from the current practice in international air law which focused on the jurisdiction of a particular country. Countries further categorized into those who had control over a particular Flight Information Region (FIR) area and those countries which become

the

‗operator/state

of

registry‘

of

airline

companies.112

Accordingly, the responsibilities of those countries are also distinct. The registry countries have to adopt and implement mitigating procedures to enabled airline companies to make risk assessment over the danger of volcanic ash cloud. The FIR countries have a greater responsibility since they need to contribute the information and monitoring data to the wider monitoring system as well as developing comprehensive pre-emptive procedures. Furthermore, the ultimate power in responding to the danger of the volcanic ash cloud is also arguably retained by the civil aviation authority of a particular country as seen during the Eyjafjallajökull eruption where the UK civil aviation authority suspend all air traffic in UK air-space.113 The steps taken by the civil aviation authority of a particular country to mitigate the emergency would undeniably implicate legal consequences to all related stakeholder. One of the examples as seen

112

Karsten Theil, Above n 45, 17. Peter Sammonds, Bill McGuire and Stephen Edwards (eds), Volcanic Hazard From Iceland Analysis and Implications of the Eyjafjallajökull Eruption (UCL Institute for Risk and Disaster Reduction), 8. 113

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in the closure of the airspace during Eyjafjallajökull eruption resulted to serious havoc in aviation industry leaving millions of passengers stranded.114

IV.

THE LEGAL IMPLICATIONS OF THE VOLCANIC ASH CLOUD CONTINGENCY PLAN

Taking the Eyjafjallajökull eruption as an example, in general, there are several legal liabilities which may be able to be asserted,115 notwithstanding to the general understanding that natural disaster supposedly construed as a waiver in most legal issues.116 The first focussed on the decision of the regulator to shut-down the airspace pursuant to the contingency plans.117 This liability arose from claimed made by several airlines that the decision of the aviation regulator was excessive and without prior consultation with all related stakeholders, includes the airline industry, and accordingly had caused significant losses to the industry since the airlines were obliged to provide necessary arrangements to the effected passengers, pursuant to Regulation (EC) 261/2004 of the European Parliament and of the Council on of 11 February 2004

114

Ibid. Ruwantissa Abeyratne, „Responsibility and Liability Aspects of the Icelandic Volcanic Eruption‟ (2010) 35 (4/5) Air and Space Law 281, 285-291. 116 John Richards, The Legal Consequences of the Iceland Volcano (11 May 2010) Law Blog . 117 Ruwantissa Abeyratne, Above n 104, 285. 115

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establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91,118 regardless to the loss of revenue inflicted to them.119

This

liability

claim

may

arguably

originate

from

the

disagreements on the actual the measurement and composition as well as the actual contact time for the volcanic materials might be deemed to be hazardous towards aviation safety.120 However, the regulator had very strong argument to support its stance. The Chicago Convention had provide the regulator with obligations to facilitate air navigation services to ensure the safety of aviation as stipulated in article 28 and Annex 3 of the Chicago Convention121 which had become the bases for the development of the contingency plans. Furthermore, since the decision to suspend all flight by the regulator supposedly construed as the ‗discretion‘ of the regulator which implemented the ‗statutory duty of care,‘ thus, as shown in various case laws discussed by Ruwantissa Abeyratne, the claimant need to prove

118

Regulation (EC) 261/2004 of the European Parliament and of the Council on of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 [2004] OJ L 46/1. 119 Ruwantissa Abeyratne, Above n 104, 285. 120 Karsten Theil, Above n 45. 121 Ruwantissa Abeyratne, Above n 104, 285 citing Chicago Convention 1944, art. 28, Annex 3.

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the negligence which undermined the capability of the regulator to undertake such obligations.122 The airlines companies also obviously become liable to its passengers for delay in the flight in accordance by Article 19 of the 1929 Warsaw Convention,123 which also become Article 19 of the 1999 Montreal Convention.124 Furthermore, for airlines which departed from the EU, the Regulation (EC) 261/2004 should be remain enforced upon them and made the airlines companies liable for the delay of the flight.125 Nevertheless, the provisions of the Warsaw Convention126 further ruled that the liability of the airlines may be limited if the airlines, along with its agents, had conducted all ‗necessary measures‘ to avoid the delay. The volcano eruption should arguably be included in those exceptions.127 However, in accordance with the aforementioned EU regulations, as

122

Ibid, 288. Convention for the Unification of Certain Rules Relating to International Transportation by Air, opened for signature 12 October 1929, 137 LNTS 11 (entered into force 13 February 1933), art. 19. 124 Convention for the Unification of Certain Rules for International Carriage by Air, opened for signature 28 May 1999, 2242 UNTS 350 (entered into force 4 November 2003), art. 19. 125 Air travel: volcanic ash cloud - EU passenger rights continue to apply (15 April 2010) European Union . 126 Warsaw Convention 1929, art. 20. 127 Ruwantissa Abeyratne, Above n 104, 290. 123

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shown in the case of Eyjafjallajökull eruption, the airlines operated in Europe retain their liability. The third liability arose in relation to the passenger insurance. In an unprecedented stance, the UK Financial Ombudsman Service had ruled in-favour for a plaintiff who claims that volcanic ash cloud should be construed as ‗poor-weather conditions‘ in contradiction to the insurance companies which determines otherwise.128 Accordingly, the insurance company should make adequate compensation to the claimant pursuant to the insurance policy. This ruling potentially become an influential decision for a significant number of insurance cases in the future which related to the ash cloud emergency and added to the complexity of the legal issues surrounding the volcanic ash cloud contingency plans since it would potentially add to the financial obligation which need to be paid by one of the stakeholder, the insurance company, during that kind of situation. The aforementioned three potential liabilities arguably described an imbalance of legal implication which arises from the volcanic ash cloud contingency plans. The current system had excessively protected the passengers, as it should be, and the regulators whilst in the same time have inflicted significant obligations to the airlines and the insurance

128

Financial Ombudsman Service, Final Decision Ms. B (March 2010) .

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companies whereas supposedly, the system creates a balance between those interests. Thus, a more comprehensive framework may be needed to accommodate this need for a novel and balanced legal regime as well as to addressed legal loop-hole currently exist such as the absent of clear liability on the failure to disseminate proper information with regard to the volcanic ash cloud emergency by the relevant authority. The momentum of the comprehensive review of the ICAO volcanic ash cloud contingency plans undertakes by the IVATF subsequent to the Icelandic eruption should be utilized to overhaul the existing systems and create a more balanced system to all stakeholders. The liability system in this regards should arguably take more into account the decision making process by the regulator in responding to the volcanic ash cloud emergency since that decision would serve as the bases for further action by all stakeholders in responding for such emergency. The passenger as the consumer, arguably, should always have the greatest protection from the risk the airline industry might bring, including for the delay or even cancellation of services due to the disruption brought by the volcanic ash cloud. Yet, those protections should not excessively burden the airline industry which also suffered tremendous losses during the ash cloud emergency. Thus, the ICAO should strive to establish a liability system where the regulator, in responding to the volcanic ash cloud emergency, operates pursuant to a certain set of standard, based on technical as well as

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scientific features on the volcanic ash cloud emergency and its relations to the safety of civil aviation. The current practice where the regulator may decide the appropriate respond for the volcanic ash cloud emergency based on its own discretion should be amended with a system where the regulator based its respond pursuant to a specific factor, agreed and decided internationally, and focussed on the technical and scientific elements and its relation to the civil aviation safety, as well as the losses incurred by all parties, including the passenger and the airline industry. With a clear and specific benchmark as bases for the regulator decision-making-process, all stakeholders would have a common understanding and knowledge for its respective rights and obligations. The negligence-of-the-regulator factor that previously essentially need to be proven would no longer construed as the sole basis to questioned the regulator decision in responding the volcanic ash cloud emergency. Instead, the regulator would need to abide with the standard and benchmark in deciding the appropriate respond, including to directly assisting the airline during the volcanic ash cloud emergency condition. That would subsequently enable the other stakeholders to easily observe the adherence of the regulator to the pre-established international standard in its decision-making-process for its respond towards the ash cloud emergency condition. In the event that the regulator failed to implement the standard, the regulator should also become liable for its failure. This framework would arguably create a more balanced liability system where the airline would not bear the sole liability in this regard,

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yet the regulator should also accounted for its respond during the emergency situation.

V.

CONCLUSION

In responding to the obvious hazardous effects of volcanic ash clouds towards aviation safety, the international community had established various contingency plans, started from multilateral level, under the auspices of the ICAO, regional level and in domestic level. The ICAO contingency plans are aimed to coordinate international efforts in monitoring as well as disseminating information on volcanic emergency. A similar function also existed for regional plans, in a more technical aspect and a narrower area. However in practice, all of those plans, arguably, still rely on the implementation on the domestic level of each particular country which would, generally, adapt the existing ICAO contingency plans and, if any, a regional contingency plans. Focussing on the legal implication of those plans, there was suggestion which argues that the current legal frameworks may not provide a balance legal implication for all stakeholders related to this issue. Those opinions underline the excessive protection for passengers whilst in the same time inflicted significant liabilities to the airlines. In the end,

international

community

should

address

this

issue

with

comprehensively amending the current legal frameworks to create a more balance rights and obligations to all stakeholders, including for a greater

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involvement of the domestic authority to support airlines during volcanic emergency.

BIBLIOGRAPHY A. Articles/Books/Reports Abeyratne, Ruwantissa, „Responsibility and Liability Aspects of the Icelandic Volcanic Eruption‟ (2010) 35 (4/5) Air and Space Law 281 Accident Description, Aviation Safety Network Accident Description, Aviation Safety Network Active Volcanoes and Plate Tectonics, "Hot Spots" and the "Ring of Fire" (1 February 2003) United States Geological Survey Airbus Flight Operations Briefing Notes Operating Environment Volcanic Ash Awareness‟ (September 2006) Airbus Air travel: volcanic ash cloud - EU passenger rights continue to apply (15 April 2010) European Union Alemanno, Alberto, „The European Regulatory Response to the Volcanic Ash Crisis between Fragmentation and Integration‟ (2010) 2 European Journal of Risk Regulation 110 Brennan, Zoe, The Story of BA flight 009 and the Words Every Passenger Dreads ... (29 January 2007) Daily Mail Campbell, Larry, A look back at Alaska volcano‟s near-downing of a 747 (18 April 2010) Herald Net Casadevall, Thomas J, „Volcanic Hazards and Aviation Safety: Lesson from Past Decade‟ [1993] (May) Flight Safety Digest 1 Composition and Terms of Reference of the International Volcanic Ash Task Force, ICAO Flight in Airspace with contamination of Volcanic Ash, EASA Safety Information Bulletin SIB No.: 2010-17R4 (24 May 2011)

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Geffen, Jos van, et al, „An Alert System for Volcanic SO2 Emissions Using Satellite Measurements‟ (Paper presented at 2009 EUMETSAT Meteorological Satellite Conference, Bath, England, 21 – 25 September 2009) Guffanti, Marianne, T J Casadevall, and Karin Budding, Encounters of Aircraft with Volcanic Ash Clouds; A Compilation of Known Incidents, 1953–2009 (2010) U.S. Geological Survey Data Series 545 Guffanti, Marianne, T J Casadevall, and Karin Budding, Encounters of Aircraft with Volcanic-Ash Clouds: An Overview, Department of Geological and Mining Engineering and Sciences, Michigan Technological University Handbook on the International Airways Volcano Watch (IAVW) Operational Procedures and Contact List Second Edition-2004 ICAO Doc 9766-AN/968 International Airways Volcano Watch (IAVW) of ICAO, International Civil Aviation Organization International Civil Aviation Organization (ICAO), Manual on Volcanic Ash, Radioactive Material and Toxic Chemical Clouds 2nd ed, (2007) International Civil Aviation Organization Doc 9691–AN/954 International Civil Aviation Organization Volcanic Ash Contingency Plan EUR and NAT Regions EUR Doc 019 NAT Doc 006, Part II (December 2010) International Volcanic Ash Task Force First Meeting Agenda Item 4.1 ICAO Doc IVATF/1-DP/4 (29/7/10) Overview of Database on Encounters of Aircraft with Volcanic Ash-Clouds. Fifth Meeting of the ICAO International Airways Volcano Watch Operations Group Agenda Item 5.4 Updating of the worldwide ash encounter database (including the model VAR) ICAO Doc IAVWOPSG/5-IP/10 15/1/10 (15-19 March 2010) Procedures for Air Navigation Services Rules of the Air and Air Traffic Services, International Civil Aviation Organization (ICAO) Doc 4444-RAC/501 Regional Caribbean Contingency Procedures for Volcanic Ash, International Civil Aviation Organization North American, Central American, and Caribbean Regional Office Richards, John, The Legal Consequences of the Iceland Volcano (11 May 2010) Law Blog < http://lawblog.legalmatch.com/2010/05/11/legal-consequences-of-theiceland-volcano/>. Romero, Raúl, International Airways Volcanoes Watch, International Civil Aviation Organization < http://www.paris.icao.int/Met/Volc_Ash/VA_awareness_workshop/International%20 Airways%20Volcano%20Watch%20%28IAVW%29%20-%20ICAO.pdf>

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Sammonds, Peter, Bill McGuire and Stephen Edwards (eds), Volcanic Hazard From Iceland Analysis and Implications of the Eyjafjallajökull Eruption (UCL Institute for Risk and Disaster Reduction) Theil, Karsten, „What are the safety regulations regarding volcanic ash and why?‟ (Paper presented at Atlantic Conference on Eyjafjallajökull and Aviation, Keflavik, Iceland, 15 and 16 September 2010) Tilling, Robert I, Volcanoes (12 December 1999) United States Geological Survey Volcano Environments (5 February 1997) United States Geological Survey Volcanoes (2 December 2009) European Space Agency Watson, John, Types of Volcanic Eruptions (5 February 1997) United States Geological Survey When Volcanic Ash Stopped a Jumbo at 37,000ft (15 April 2010) BBC News Magazine < http://news.bbc.co.uk/2/hi/uk_news/magazine/8622099.stm> Witkin, Richard, Jet Lands Safely After Engines Stop in Flight Through Volcanic Ash (16 December 1989) The New York Times < http://www.nytimes.com/1989/12/16/us/jet-lands-safely-after-engines-stop-in-flightthrough-volcanic-ash.html> B. Cases Financial Ombudsman Service, Final Decision Ms. B (March 2010) C. Legislations/Treaties Convention on International Civil Aviation, opened for signature 7 December 1944, 15 UNTS 295 (entered into force 4 April 1947) Convention for the Unification of Certain Rules Relating to International Transportation by Air, opened for signature 12 October 1929, 137 LNTS 11 (entered into force 13 February 1933). Convention for the Unification of Certain Rules for International Carriage by Air, opened for signature 28 May 1999, 2242 UNTS 350 (entered into force 4 November 2003) Regulation (EC) 261/2004 of the European Parliament and of the Council on of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 [2004] OJ L 46/1.

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GLOBAL GOVERNANCE IN A GLOBALIZING WORLD: DO GLOBALIZATION AND GLOBAL GOVERNANCE ERODE NATIONAL SOVEREIGNTY? Frassminggi Kamasa

Abstrak Tulisan ini membahas mengenai hubungan antara globalisasi dan pemerintahan global dan efeknya terhadap kedaulatan bangsa dan negara. Secara khusus, tulisan ini akan mengkaji secara empiris proses globalisasi dan pemerintahan global yang telah mengakibatkan erosi terhadap kedaulatan negara yang bersumber dari ide Westphalia. Berbeda dengan kajian-kajan yang lain, tulisan ini mempertimbangkan apakah pemerintahan nasional yang lemah, berbagai tekanan dalam proses globalisasi, dan kompleksitas pemerintahan global dapat menjelaskan fenomena kedaulatan bangsa dan negara yang mulai terkikis. Perkembangan yang demikian akan mengurangi kapasitas negara dan konsolidasi nasional dalam mengatur urusan dalam dan luar negeri. Sebagai tambahan, akan dianalisa apakah proses dan interaksi globalisasi dan pemerintahan global bersifat otonom atau justru merupakan ekspresi dari hegemoni Barat. Dengan menggunakan analisis studi kasus tunggal mengenai globalisasi dan pemerintahan global yang terjadi di Indonesia dari tahun 1997—2007, ditemukan asosiasi antara globalisasi, pemerintahan global, dan kompleksitas pemerintahan global. Selanjutnya juga akan dibuktikan bahwa interaksi antara berbagai tekanan dalam proses globalisasi dan kompleksitas pemerintahan global menghambat kepentingan pemerintah untuk mengembangkan ketahanan nasional dan pembangunan bangsa dan negara. Kata kunci: kedaulatan bangsa dan negara, globalisasi, pemerintahan global, pembangunan.

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Abstract This paper discusses the relationship between globalization and global governance and its effect on the nation’s sovereignty. Particularly, this paper will empirically examine the process of globalization and global governance that has resulted in the erosion of national sovereignty that comes from the idea of Westphalia. In contrast to other studies, this paper considers whether the national governments are weak, the pressures of globalization processes, and the complexity of global governance may explain the dawn of the erosion of the sovereignty of the nation and the state. Such developments will reduce the capacity of the state and national consolidation in regulating domestic and foreign affairs. In addition, it will be analyzed whether the process and the interaction of globalization and global governance are autonomous or even an expression of Western hegemony. By using a single case study analysis on globalization and global governance that occurred in Indonesia from 19972007, we found relationship between globalization, global governance, and the complexity of global governance. Furthermore it will be proved that the interaction between the various pressures in the process of globalization and global governance complexity hamper the interests of the government to develop a national security and nation building . Keywords: state sovereignty, globalization, global governance, development.

Introduction This study investigates Indonesia from 1997-2007. In this study I will discuss the question about whether globalization and global governance erodes Indonesia‘s national sovereignty. I will divide this essay into three sections. The first section analyzes the cause-and-effect relationships between a weak national government, globalization, and global governance that erode national sovereignty. The second section investigates how globalization pressure is likely to have the effect of eroding national sovereignty. The third section examines how the global governance complex explains the erosion of national sovereignty.

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My research question is: ―Does globalization and global governance erode national sovereignty?‖ The study‘s hypotheses may include the following: (1) state being weakened by the process of globalization and global governance. A weak national government will lead to an erosionin national sovereignty. (2) globalization and global governance is less an autonomous process, and more of an expression of United States hegemony, this coupled with an economic downturn will lead to erode national sovereignty. My first hypothesis, as pointed out by Freiden (2006:471) and Griffiths (2008:132), is that globalization and global governance weaken national government and state capacity. In the complex multidimensional processes of globalization and global governance, the state‘s capacity for independent political action is weakened. My second hypothesis as outlined by Gilpin (1987:45) and critical theorists, is that regimes, values, and agenda setting in globalization and global governance are skewed. Partisan processes of globalization and global governance have significant effects on the erosion of state sovereignty. The debates in International Relations (IR) about global governance are extensive and voluminous. One of the debates on global governance is focused

129

on

―whether

national

sovereignty

is

being

eroded.‖129

Quoted in Farrington, J. (2002, October). Sovereignty and Global Governance. Retrieved July 27, 2012, from Department for International Development: http://www.odi.org.uk/resources/docs/3171.pdf.

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Sovereignty is defined as supreme authority over a given territory withthe authority to make laws and regulations for that society.130 Globalizationis―a trend of increasing transnational flows and increasingly thick networks of interdependence.‖131 The Functional paradigm views global governance as universal liberal democracy.132 According to Pattberg, ―in simple terms, global governance means to steer the process of globalization.‖133 Many scholars pointed out that global governance in the form of thick globalism and liberal international economic institutions represented only the interests of industrial countries and northern corporations, which ruled in a way that was autocratic, deceptive, exploitative, hypocritical, and imperialistic.134 Thus, from the ideological point of view, the project

130

Krasner, S. (2001). Rethinking the sovereign state model. Review of International Studies (27, 17-42), pp. 19-29 131 Quoted in Keohane, R. (2002).Power and Governance in a Partially Globalized World. London: Routledge, p. 15. 132 Ardalan, K. (2011). Globalization and Democracy: Four Paradigmatic Views. Transcience Journal , Vol. 2, No 1 (2011), 30-31. Available at http://www2.huberlin.de/transcience/Vol2_Issue1_2011_26_53.pdf. 133 Quoted in Patberg, P. (2006). Global Governance: Reconstructing a Contested Social Science Concept. Garnett Working Paper, 13. Available at http://www2.warwick.ac.uk/fac/soc/garnet/workingpapers/0406.pdf. 134 Balaam, D., & Veseth, M. (1996). Introduction to International Political Economy. New Jersey: Prentice Hall, pp. 221-223; Barry Buzan&Ole Wæver. (2003). Regions and Powers: The Structure of International Security. Cambridge: Cambridge University Press, p. 10; Eayrs, J. (1992). The Outlook of Statehood. In H. Levine, World Politics Debate: a Reader in Contemporary Issues (pp. 16-23). New York: McGraw-Hill, Inc; Frieden, J. (2006). Global Capitalism: Its Fall and Rise in the Twentieth Century. New York: W.W. Norton & Company, p. 469; Perkins, J. (2009); Hoodwinked. An Economic

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of liberalism is, among other things, about building a sense of uniformity and the incorporation of all mankind into a single idea free from restrictions of political boundaries.135 The sovereign state‘s capacity for independent political action is weakened by globalization, especially in the area of economic policy.136― National governments had ceded power to the WTO and the IMF or had this power seized from them by international markets.‖137 According to critical theorists, such as Cox, Rosenberg, and Cutler, the emergence of the modern states system is actually the development of a new form of imperial power, and hegemony, in which the growing influence of private actors has blurred the boundaries between private and public authority in the global realm.138 In each of these analyses, it is clear that there is some erosion of

Hit Man Reveals Why the World Financial Markets Imploded and What We Need to Do to Remake Them. New York: Broadway Books, pp. 101, 134; Rais, A. (2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation: Save Indonesia!). 135 Gilpin, R. (1987). The Political Economy of International Relations. New Jersey: Princeton University Press, pp. 45-46; Perkins, J. (2004). Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc; pp. 8-10, 15-17, 120-129; Rais, A. (2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation: Save Indonesia!). Yogyakarta: PPSK Press, pp. 11-18; Thirkell-White, B., Grugel, J., & Riggirozzi, P. (2008). Beyond the Washington Consensus? Asia and Latin America in search of more autonomous development. International Affairs (84:3) , pp. 501-504. 136 Griffiths, M., O'Callaghan, T., & Roach, S. (2008). International Relations: The Key Concepts. New York: Routledge, p. 132. 137 Quoted in Frieden, J. (2006).Global Capitalism: Its Fall and Rise in the Twentieth Century. New York: W.W. Norton & Company, p. 471. 138 Roach, S. (2007). Critical Theory and International Relations: a Reader. London: Routledge, pp. 267-283.

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national sovereignty by the processes of globalization and global governance. It also suggests that the process is less autonomous.

A case study of Indonesia a. Weak national government The Republic of Indonesia is the world‘s largest archipelago with 13,487 islands and anarea of 5,193,250 km². It is a ―fragile‖ country with a population of 240 million people occupying 400 ethnicities and speaking 583 local languages. Indonesian society is united in one principle, which is Pancasila (five principles), and has a national motto Bhineka Tunggal Ika (unity in diversity). Indonesia also has the world‘s largest Muslim population. Given this background, there is no wonder that governance is a delicate action for the national government. With increasing global political

interdependence

and

integration,

Indonesian

national

sovereigntymay have become vulnerable and weakened by less autonomous processes of globalization and global governance. A weak government can be measured from three principles of poor governance. Poor governance can be defined simply as the contrary of good governance.139 In my view, a weak national government is the

139

Nasution, A. (2009, February 13). http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf. Retrieved August 15, 2012, from BPK: http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf; Force, P. T. (2002, June). Ensuring Good Governance for Poverty Reduction. Retrieved

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condition of lacking political power, social power and lack of influence of the leadership or elites in running the state. It is manifest in the lack of capability or poor management of the governing body to run the system, take action, control, or regulatethe stateorganization and the people. This can be seen from the poor governance indicators such as the high level of national debt, the high level of corruption, and income inequality. The first principle of poor governance is a high level of national debt. Debt plus lots of interest leads to disappearing freedom. Since the Cold War, globalization agencies were using loans as a main instrument of hegemony by justifying huge international loans that would funnel back to the hegemony through massive engineering project and bankrupt the countries that received these loans so they would be forever beholden to their creditors.140 This system has been called a ―Marshall Plan in reverse‖ where ―payments on Third World debt require more than $375 billion a year, twenty times the amount of foreign aid that Third World countries

August 27, 2012, from World Bank: http://siteresources.worldbank.org/INTVIETNAM/Resources/Localizing-MGDs-forPoverty5.pdf, pp. 2;Koh, T. (2009, October 7); Lecture on The Principles of Good Governance. Retrieved 13 August, 2012, from National University Singapore: http://www.spp.nus.edu.sg/ips/docs/pub/sp_tk_The%20Principles%20of%20Good%20Go vernance_071009.pdf; Khemani, M. (2008, March 6). Combating corruption in the Commonwealth. Retrieved Auguts 20, 2012, from Commonwealth Quarterly: http://www.thecommonwealth.org/EZInformation/176102/060308combating/. 140 Rais, A. (2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation: Save Indonesia!). Yogyakarta: PPSK Press, pp. 1-2, 23-24; Perkins, J. (2004). Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc, pp. 15, 203-205.

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receive with the countries of the Global South subsidizing the wealthy North, even as half the world‘s population lives on less than $2 a day.‖141 Chronic indebtedness in Indonesia from 1997-2007 has seriously constrained the government‘s ability to advance general prosperity. The Indonesian reliance for external debt from a cartel of international creditors, known as the Paris Club, had even started before the onset of 1997 financial crisis. In 1996, Indonesia‘s external debt amounted to US$127.4 billion or 54.5 per cent of GDP, in 1997 it amounted to US$135.0 billion or 163.1 per cent of GDP, in 1998, it amounted to US$149.9 billion or 129.0 per cent of GDP, in 1999 amounted to US$ 147.6 billion or 91.0 per cent of her GDP, and in 2000 amounted to US$ 149.1 billion or 86.9 per cent of her GDP.142 The data presented here are a conservative figure and therefore it is reasonable to assume that Indonesia is in a state of bankruptcy in 1996-2000 because of its debt burden reached absolute levels. Besides its false recipe to force Bank Indonesia (BI) to close sixteen banks on November 1997 that created the banking debacle, the IMF also contributed to a huge Indonesia‘s debt. As we can see from the table

141

Hiatt, S. (2007). A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. San Fransisco: Berrett-Koehler Publishers, Inc, p. 19. 142 IMF. (2000, June). Recovery from the Asian Crisis and the Role of the IMF. Retrieved August 8, 2012, from International Monetary Fund: http://www.imf.org/external/np/exr/ib/2000/062300.htm#box3; Febriaty, H. (2010). Analisis Determinan Cadangan Devisi di Indonesia (Analysis of the Determinants of Foreign Exchange Resreves in Indonesia). Medan: Universitas Sumatra Utara, pp. 1-7.

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below, it would be reasonable to assume that continued high indebtedness may have contributed to destabilization in Indonesia from 1997 until it was able to repay enough debt by 2006. Huge debt and social inequality factors created political turbulence and resulted in the fall of the government in May 1998 and the disintegration of East Timor.

Indonesia Debts to the IMF 1997-2006 Year

US$ (in billions)

SDR (in billions)

1997

2.92

2.202

1998

5.64

4.254

1999

1.34

1.001

2000-2003

5

3.638

2002

4.5

3.638

2006 (outstanding)

3.2

2.2

Source: http://www.imf.org/external/np/sec/pr/2006/pr06215.htm,

William Cline in International Debts Reexamined argues that the government that spends over 4 per cent of GDP to pay debts will be unable to undertake its duty to maintain complete political stability.143 The condition in Indonesia is much worse than 4 per cent. Globalization

143

Cline, W. (1995). International Debt Reexamined. Washington DC: Institute for International Economics, pp. 1-3, 155.

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seems malign for Indonesia from 1997-2007. The government cannot escape from a seeming addiction to interest-bearing debt. As a result, the government is unable to undertake its duty to maintain political stability because it spends over 100 per cent of GDP to pay its debts to the major multinational banks, many corporations, and foreign aid missions from a multitude of countries. The nation becomes bankrupt because of interestbearing debt. This indebtedness, coupled with the Asian financial crisis, may better explain the cause-and-effect relationship between a weak national government, globalization and global governance eroding national sovereignty. The second principle of poor governance is white-collar crime in the form of corruption. Transparency International defines corruption as ―the abuse of entrusted power for private gain. This can mean not only financial gain but also non-financial advantages.‖144 I think corruption in Indonesia can be seen from three perspectives. Systemic corruption, corruption by necessity, and by needs. All these categories are mutually connected in a globalized world in such a way that if the core system of today‘s capitalism is driven by unfairness, consumerism, hedonism, and individualism, the others are also affected.145 With this framework,

144

Compact, U. N. (2011). Global Compact Principle 10. Retrieved August from The UN Global http://www.unglobalcompact.org/aboutthegc/thetenprinciples/principle10.html. 145 Katz, C. (2011, January-February). Interpretations of the economic crisis. August 31, 2012, from International Socialist

31, 2012, Compact: Retrieved Review:

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everything is not enough and there is likely to be a need for more resources to be exploited. The present capitalist system lacks built-in systems that respect the harmony between the human and the Supreme Being, harmony between human beings, and harmony with nature. In this regard, corruption is a systemic and chronic disorder that exists in today‘s capitalist system. This can be seen from the inequitable distribution of the world‘s income that I will present in the next variable. From micro-analysis, Indonesia also is unable to escape from this tendency. Corruption has become a chronic problem in Indonesia from 1997-2007. Based on Political and Economic Risk Consultancy (PERC) and Transparency International survey, from 1997-2006 the level of corruption in Indonesia has not significantly improved.146 On average, Indonesia isusually at the top ranking in corruption practices. And because corruption is a ‗cancer‘ sweeping across Indonesia, the public trust in politicians is low.

http://www.isreview.org/issues/75/feat-katz.shtml; Perkins, J. (2004). Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc, p. 206; Perkins, J. (2009). Hoodwinked. New York: Broadway Books, pp.61-71. 146

Quah, J. (2011). Curbing Corruptions in Asian Countries: An Impossible Dream? Bingley: Emerald Group Publishing Limited, pp. 388; LAN. (2007). StrategiPenangananKorupsi di Negara-Negara Asia Pasifik (Strategy of Curbing Corruption in Asia-Pacific States), Lembaga Administrasi Negara, Pusat KajianAdministrasiInternasional, 2007, p. 20.

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Indonesia’s Level of Corruption according CPI and PERC Year

CPI

Rank

and

PERC Rank and Score**

Score* 1997

46th (2.72)

12th (8.67)

1998

80th (2.0)

12th (8.95)

1999

96th (1.7)

12th (9.91)

2000

85th (1.7)

12th (9.88)

2001

88th (1.9)

11th (9.67)

2002

96th (1.9)

12th (9.92)

2003

122nd (2.9)

12th (9.33)

2004

133rd (2.0)

12th (9.25)

2005

137th (2.2)

13th (9.10)

2006

130th (2.4)

13th (8.16)

2007

143rd (2.3)

11th (8.03)

Source: Jon S.T. Quah (2011). Curbing Corruption in Asian Countries: An Impossible Dream? (Emerald: Bingley) pp. 388. *The Corruption Perception Index by Transparency International score ranges from 0 (most corrupt) to 10 (least corrupt). **The Political and Economic Risk Consultancy, Ltd (PERC) score ranges from 0 (least corrupt) to 10 (most corrupt)

From the table above we can infer that corruption in Indonesia from 1997-2007 increased. From 1999-2002, corruption in Indonesia almost reached the absolute level. This is the period when Indonesian banks were insolvent because of their imprudent use of fractional reserve banking without any regulation or enforcement to stop this devastating practice.

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At this time also, Indonesia came under the auspices of the IMF and the World Bank to escape from the devastating financial crisis of 1997.147 Without integrity in the system and transparency when using its interestbearing loans, it would be reasonable to assume that the practice of corruption likely happened by taking advantage of a weak national government that cannot dodge from dependency and must get interestbearing debts from the creditors. The third principle of poor governance is income inequality. Income inequality is the condition where income distribution does not circulate evenly. There are domestic and international factors that cause income inequality. For the sake of this study, I argue that ‗the rules of the game‘ of capitalism which include a usurious economic system, money market system (stocks and bonds), and fiat monetary system has made wealth no longer circulate in the economy. The consequence is that the rich get richer and the poor get poorer. The result is catastrophic. The gap between the ‗haves‘ and ‗have-nots‘ is

a world-wide phenomenon. According to the 2007 Human

Development Report, the poorest 40 per cent of the world‘s population

147

Quah, J. (2011). Curbing Corruptions in Asian Countries: An Impossible Dream? Bingley: Emerald Group Publishing Limited, pp. 388; Bank, T. W. (2007, July 24); Hutang Indonesia dan Bantuan Bank Dunia (Indonesian Debts and the World Bank Assistance). Retrieved August 11, 2012, from The World Bank: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEX T/INDONESIAINBAHASAEXTN/0,,contentMDK:21014341~pagePK:1497618~piPK:2 17854~theSitePK:447244,00.html.

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accounts for 5 per centof global income, the richest 20 per cent accounts for three-quarters of world income.148 From this macro analysis, it is reasonable to assume that rich people are getting greedy at the expense of others. The ‗rules of the game‘ in the name of financial globalization also manifested itself in numerous economic and financial crises due to usurious-based economic and financial globalization.149 What is its relationship with income inequality? As I have mentioned in the previous analysis, globalization regimes sustain interest-bearing debt and breed corruption. Corruption affects income inequality. According to the UN-HABITAT ―empirical research into causal relationship between corruption and income inequality suggests that it would take only a 10 per cent decrease in corruption to increase GDP growth by 1.7 percent in Asian countries.‖150 Income inequality has a strong impact in weakening the state by magnifying social inequality and feeding corruption.

148

UNDP. (2007). Human Development Report 2007/2008.New York: Palgrave Macmillan, p. 25; Perkins, J. (2004); Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc, pp. xii, 206. 149 The savings and loan crisis in the 1990s, Asian and Russian monetary crisis in 1997, Enron accounting fraud in 2001, Argentine, Zimbabwe, and Turkey currencies and debt crises respectively in 2002, 2003, 2004, Bernard Madoff investment scandal in 2005, and the subprime mortgage crisis in 2007. 150 Programme, U. N. (2008). State of the World's Cities 2010/2011: Bridging the Urban Divide. New York: Earth Scan, p. 81.

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On a micro-analysis, it creates social inequalities, instability, and the degradation of national confidence. To be specific, when the economic and financial crisis hit Indonesia, ordinary people became vulnerable because they lost their jobs, and even if they retained a job, wages decreased because of a massive rupiah devaluation. No matter how hard Indonesian people worked, they were still poor because corruption prompted by the system had shackled them. The level of trust and national integration ebbed away. The national government was helpless in providing basic necessities for the people. Thisrocked the very foundation of national sovereignty. People became desperate to find any job; most were informal or dirty, difficult, and dangerous jobs. With less pay than they were used to, corruption became short-cut to sustain their life, families, and dependents. The gap between rich and poor became wider.

82

Year

Gini Ratio in Indonesia

1996

0.356

1997

0.560

1998

0.370

1999

0.311

2002

0.343

2005

0.343

2006

0.357

2007

0.376

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Source: Collected from various sources and Indonesian National Agency of Statistics (BPS), Analysis of poverty conditions in Indonesia.151

From the table above, Indonesia‘s Gini index (a measure of the inequality of income distribution, in which a lower index indicates better equality) rose to 0.376 in 2007 from 0.356 in 1996. It reached peak value in 1997. From this fact, I can infer that inequality has been increasing in Indonesia for a decade. The economic growth ‗cake‘ is not distributed evenly.The concentration of wealth became more exclusive as the gap between rich and the poor widened. Too much reliance on economic globalization in the form of debts and foreign capital flows created vulnerabilities for long-term state economy planning. The conditions attached to debts was too controlling and did not give national freedom to do things based on local conditions. This may have dampened national sovereignty, created political turmoil, and social

151

Statistik, B. P. (2008). Analisis dan Penghitungan Tingkat Kemiskinan Tahun 2008 (Analysis of Poverty Rate in 2008). Jakarta: Badan Pusat Statistik, available at http://daps.bps.go.id/File%20Pub/Analisis%20Kemiskinan%202008.pdf pp. 30-35; ADB. (2012); From Poverty to Prosperity:A Country Poverty Analysis for Indonesia. Retrieved August 7, 2012, from Asian Development Bank: http://216.109.65.20/Documents/Reports/Poverty-Assessment-INO/default.asp; Maulia, E. (2008, December 17). Income gap widens in Indonesia, most other countries: ILO. Retrieved August 10, 2012, from The Jakarta Post: http://www.thejakartapost.com/news/2008/12/17/income-gap-widens-indonesia-mostother-countries-ilo.htm; Sinaga, A. (2012, June 5). Income, a perilously widening gap. Retrieved 15 August, 2012, from The Jakarta Post: http://www.thejakartapost.com/news/2012/06/05/income-a-perilously-widening-gap.html.

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problems. The positive economic growth in Indonesia was yet to trickledown for the welfare and prosperity of the people.152

b. Economic globalization pressure Globalization pressure is the use of persuasion, influence, intervention or even intimidation to make states lose their autonomous economic and political decision making power. Economic and political globalization as a pressure from the Western world to the non-Western world is explained by the concept of hegemony. The new liberal cosmopolitan ideal is emerging and being accepted as the dominant ideology. There is substantial pressure from globalization agents such as the IMF, World Bank, and MNCs to follow homogenous, hegemonic, and imperialistic democratization processes coupled with liberal development strategies.153 With her strategic location and rich natural resources, Indonesia has attracted states and transnational actors to impose three strands of

152

Wijayanto. (2011, April 28). Income, a perilously widening gap. Retrieved August 8, 2012, from Globe Asia: http://www.thejakartaglobe.com/columnists/the-illusion-ofbeing-equal-prosperous-and-employed/437854. 153 Ardalan, K. (2011). Globalization and Democracy: Four Paradigmatic Views. Transcience Journal , Vol. 2, No 1 (2011), pp. 30-31; Febriaty, H. (2010).Analisis Determinan Cadangan Devisi di Indonesia (Analysis of the Determinants of Foreign Exchange Resreves in Indonesia). Medan: Universitas Sumatra Utara, pp. 1-7; Hobson, J. (2000). The State and International Relations. Cambridge: Cambridge University Press, pp. 130-136;Perkins, J. (2004). Confessions of an Economic Hit Man. California: BerretKoehler Publishers, Inc; pp. 8-10, 15-17, 120-129; Perkins, J. (2009). Hoodwinked. An Economic Hit Man Reveals Why the World Financial Markets Imploded and What We Need to Do to Remake Them. New York: Broadway Books, p. 141.

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liberalism. Commercial liberalism promotes the idea of free trade and economic interdependence, republican liberalism endorses the spread of democracy, and institutional liberalism promotes the development of international institutions. For Indonesia, globalization pressure from 1997-2007 can be divided into three components. First, the component of economic policy resulted from the imposition of Washington Consensus mantras, which are privatization, deregulation, and liberalization to escape from the Asian financial crisis 1997. Second, the spread of an American political model via globalization agents required Indonesia to undertaken overhaul of political organization based on liberal values. Third, the war on terror included pressure to eradicate so-called ―Islamic terrorism‖ in Indonesia and prevent the country from becoming Southeast Asia‘s terrorism hotspot. In this analysis, I focus on the first aspect. Indonesia‘s national sovereignty was at low ebb from 1997-2007. The government was weak because of its ailing internal affairs and reliance on globalization regimes. Indonesia was basically bankrupt because of a debt trap. International interest-bearing loans bound Indonesia to its creditors. Fundamental economic integration and interest-seeking rules nourish rent-seeking behavior in today‘s capitalism. Indonesia‘s decaying sovereignty can be clearly seen from the conditional aid found in the Letter of Intent (LoI) and Memorandum of Economic and Financial Policies (MEFP) of the government of Indonesia from 1998-2006. This basically required the Indonesian government to

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undertake privatization, deregulation, and liberalization of its strategic state-owned enterprises (SOEs).154 The IMF has given a false recipe to Indonesia, which must follow the LoI in order to basically liberalize, deregulate, and privatize its economy and become a model of Washington Consensus policies. The LoI sets out the conditions for Indonesia to get funds from the IMF.155 Jonathan Stevenson describes this shocking pressure ―the IMF offered help in the form of confidential agreement on 31 October 1997. The letter of intent required that 16 banks be closed in November 1997, which prompted a run even on relatively healthy banks.‖156 The pressure was getting high when the IMF threatened to withhold further bailout funds if the government did not following its instruction. Furthermore, on January 9, 1998, US President Bill Clinton called President Suharto to insist that IMF program must be followed.157

154

IMF. (2012, July 18). Indonesia and the IMF. Retrieved August 23, 2012, from International Monetary Fund: http://www.imf.org/external/country/idn/index.htm?type=23. 155 IMF. (2002, November 20). Indonesia—Letter of Intent. Retrieved August 10, 2012, from International Monetary Fund: http://www.imf.org/external/np/loi/2002/idn/03/index.htm.. 156 Quoted in Stevenson, J. (2000).Preventing Conflict: The Role of the Bretton Woods Institute. New York: Oxford University Press, p.18. 157 Kutan, A., Sudjana, B., & Moradoglu, G. (2012). IMF Programs, financial and real sector performance, and the Asian Crisis. Retrieved August 31, 2012, from City University of Hongkong: http://www.cb.cityu.edu.hk/CONFERENCE/EMRM2012/doc/KUTAN%20Ali.pdf, pp. 25-49.

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On February 4, 2000, the IMF approved a three-year term loan to support the program of structural reforms in Indonesia. When Indonesia asked for financial assistance, the IMF provided a variety of conditions.158 Sometimes these requirements actually increased the financial crisis on borrowing countries, as well as what happened in Indonesia during the 1997 economic crisis. The policy of the Fund is used to force, among other things, privatization, removal of subsidies and deregulation. After the 1997 crisis, on March 26, 1998, the US$40 billion rescue package organized by the IMF failed in the goal of reviving Indonesia‘s economy. In fact, it increased the country‘s debt burden dramatically, while simultaneously exacerbating Indonesia‘s economic crisis.159 The hegemonic dominance of the economic and political globalization contracts affected national sovereignty, capacity, and capability to create independent political-economic decisionsat critical times. These sets of regimes were retained by the IMF via post-program monitoring.160 With

158

Baswir, R. (2005, December 06). Tim Ekuin 'Boediono'? (Economic Team of 'Boediono')? Retrieved August 12, 2012, from Gadjah Mada University: http://www.ekonomikerakyatan.ugm.ac.id/My%20Web/sembul34_1.htm; Tri. (2003, July 31). Pasca-IMF, Dikeluarkan Buku Putih (Post-IMF, White Book been Released). Retrieved August 30, 2012, from Suara Merdeka: http://www.suaramerdeka.com/harian/0307/31/nas6.htm. 159 Kamasa, F. (2011). What China's and India's Economic Development Can Bring to ASEAN? Jurnal Diplomasi, Vol. 3, No. 1, March 2011, p. 112. 160 Regimes defined as implicit or explicit principles, norms, rules, and decision-making procedures. IMF (2005, March). Indonesia: Post-Program Monitoring Discussions. Retrieved August 28, 2012, from International Monetary Fund: http://www.imf.org/external/pubs/ft/scr/2005/cr05108.pdf; IMF. (2001, December 13);

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high interdependence, caused by the lack of political will creating a basis for the large-scale economies, Indonesia could not resist globalization pressures, could not secure enough freedom to do things, was, and still is, trapped in a huge debt. When Indonesia signed the conditions of the loans, its national sovereignty basically eroded for five reasons. First, the Indonesian government was required to make an autonomous Banking Law. From here emerges Act No.23/1999 on Bank Indonesia that separates state authority from the central bank of the Republic of Indonesia.161 The puzzle is, if the state is sovereign, why does it have to stipulate a law that is so important, being imposed by non-state organization (INGOs)? Furthermore, BI cannot be separated from the effects of having to submit tothe IMF Articles of Agreement, that is, to be regulated, and in some instances (as per the following articles: article IV section 2, article IV section 3.a, article V section 1, and article VIII section 5), this involves the state losing control of its central bank to the IMF, and only the central

Indonesia—Letter of Intent,Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding,. Retrieved August 14, 2012, from International Monetary Fund: http://www.imf.org/external/np/loi/2001/idn/02/index.htm. 161 Indonesia, R. o. (1999). Act of the Republic of Indonesia No. 23 of 1999 Concerning Bank Indonesia. Retrieved August 23, 2012, from Bank Indonesia: http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B20FC008B49A61/1215/act2399.pdf.

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bank, not government, is to have the relationship with the IMF.162 The bank is the backbone of national economy and if the central bank cannot escape being ruled by the non-state organization then logically the IMF is controlling Indonesia and the economic sovereignty of Indonesian is being eroded. Second, under the LoI requirements for restructuring the banking system, the government had to amend the Act of the Republic of Indonesia concerning Banking by Act No. 10 of 1998 and create Government Regulation No. 29 of 1999 concerning Purchase of Shares in Commercial Banks, which allowed total foreign ownership to 99 per cent of the commercial bank.163 This high threshold was dictated by the IMF in the conditionsassociated with its loansin an effort to spur growth in the immediate aftermath of the 1997 monetary crisis. Third, under the LoI on privatization of the SOEs, the government should increase the shares of SOEs released to the public. At least, this should be done for companies engaged in domestic and international

162

IMF. (1944, July 22). Articles of Agreement of the International Monetary Fund. Retrieved August 18, 2012, from International Monetary Fund: http://www.imf.org/external/pubs/ft/aa/. 163 Heriani, F. N., & Arkyasa, M. (2012, July 23). BI Should Regulate Foreign Ownership of National Banks. Retrieved August 20, 2012, from Hukum Online.com: http://en.hukumonline.com/pages/lt500cfb9830e72/bi-should-regulate-foreign-ownershipof-national-banks; Indonesia, R. o. (1998). Act of the Republic of Indonesia Number 7 of 1992 Concerning Banking as Amended by Act Number 10 of 1998. Retrieved August 18, 2012, from Bank Indonesia: http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828A7B2-0FC008B49A61/13309/act_1098e.PDF.

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telecommunications sectors.164 Because of this commitment, in less than five years, the Indonesian government lost the ownership of its telecommunications company Indosat which is strategically important. Because of this commitment, SOEs became purely business-oriented, which is to seek profit and sacrifice the welfare of the people. The economic and financial globalization that took place towards the end of the twentieth century is characterized by the liberalization ofall sectors imposed through structural adjustment programs (SAP) by global financial institutions. Globalization comes with policy conditions. According to the IMF, the prime goals of SAP are to improve a country‘s balance of payments, and to promote sustainable long-term growth. In reality, it is not transparent and can be seen as a major cause of poverty in Indonesia. IMF‘s SAP is intended to assist Indonesia tomeet its debt-bearing loans provided by the IMF to Indonesia to address fiscal issues, monetary, inflation, financial deregulation, trade liberalization, and privatization of public-sector enterprises. The assistance has become counterproductive

164

Online, H. (2000, September 21). Privatisasi Indosat Diundur Sampai 2003 (Indosat Privatization Postpones untill 2003). Retrieved August 20, 2012, from Hukum Online.com: http://www.hukumonline.com/berita/baca/hol674/privatisasi-indosatdiundur-sampai-2003; Ritonga, U. (2002, Juni 18). Kesepakatan Ekonomi sebagai Pengganti LoI IMF (Economic Agreement as a Substitute of IMF's LoI). Retrieved August 20, 2012, from Tempo Interaktif: http://www.tempo.co.id/hg/ekbis/2002/06/18/brk,20020618-14,id.html.

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and was often criticized as the crisis became deeper, longer, and harder.165 We can see this course from table below.

Level of Unemployment, Level of GDP, Level of Trade, Inflation Rate, and Interest Rate in Indonesia 1997-2007 (in percentage) Year

Level of

Level

Level of

Inflation

Interest

Unemployment

of GDP

Economic

Rate

Rate

Growth 1997

5.00

4.7

5.00

11.05

8.21

1998

5.46

-13.3

-15.0

77.63

-24.6

1999

6.36

0.3

0.79

2.01

11.83

2000

6.08

4.8

4.90

9.35

-1.65

2001

8.01

3.4

3.64

12.55

3.72

2002

9.06

3.7

4.50

10.03

12.32

2003

9.51

4.8

4.78

5.06

10.85

2004

9.86

5.0

5.03

6.40

6.4

2005

10.26

5.7

5.69

17.11

12.75

2006

10.27

5.5

5.50

6.60

9.75

2007

9.11

6.3

6.35

6.59

8.00

Sources: Data processed from various sources, http://www.bps.go.id/aboutus.php?inflasi=1, Indonesian National Agency of Statistics (BPS), 1997-2007, Statistical Yearbook of Indonesia (various years); http://www.worldbank.org/en/country/indonesia, http://eprints.undip.ac.id/26483/2/Jurnal_Skripsi.pdf

165

Naqvi, N. (2012, August 26). The IMF and Us. Retrieved September 4, 2012, from The Express Tribune: http://tribune.com.pk/story/426495/the-imf-and-the-us/.

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What assumptions can be made with the above data? Five salient observations can be drawn from these economic downturn indicators. First, by any standards, Indonesia had high unemployment rates from 1997-2007. From 1999-2007, the growth of the economy was relatively low, at just about 3.9 percent. Second, the high rates of unemployment, inflation rates, and interest rates contributed to the onset of a weak national government in Indonesia handling macro and micro economic indicators. Unemployment grew and the number of poor people increased sharply. The difference between the highest and the lowest of the unemployment levels are double and inflation rates twelve-fold. Third, the double digits of unemployment rates, interest rates, and inflation rates in Indonesia may have contributed to destabilization in socio-economic conditions in Indonesia. Such high destabilization affects societal economy activities. Fourth, in Indonesia from 1997-2007, the unemployment, inflation rates, and interest rates were relatively stable at high levels of 10 per cent, 17 per cent, and 20 per cent for a decade. Fifth, these indicators coupled with other variables may better explain the onset of weak national government and economic downturn in Indonesia over a period of ten years. Economic downturn is even harder when we look at the effects of the economic crisis as a result of the US sub-prime mortgage crisis in 2008 and the series of bubbles from then until now. The

economic

globalization

pressure

has

created

unequal

relationships in the international system and allowed foreign countries to control critical resources and dominate the country‘s public policy

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making. For example, the fiat monetary system will invariably lead to inflation because paper money is printed continuously so that the value of its purchasing power decreases. It also invariably benefits highly industrialized countries because soft currencies (e.g. Indonesian Rupiah) must be linked to hard currencies (e.g. US Dollar). The monetary crisis in Indonesia that began in July 1997 led to the fall of President Suharto on May 21, 1998. Inflation soared, and was recorded at 11.05 % in 1997 and reached 77.63 per cent in 1998. This financial crisis led to the collapse of the rupiah from Rp. 2.000 in 1997 to reach Rp. 20.000 per US dollar in 1998. This caused high prices in traded goods of more than 4 times, that is, of more than 300 per cent, at the 1998 exchange rate, in addition interest-bearing foreign denominated debt was swollen as the value of the rupiah depreciated against the US dollar. The sovereignty of national government is eclipsed when the national currency depreciates in such way. Based on this analysis, it is reasonable to say that the IMF‘s bailout of Indonesia in 1997-1998 is basically a pressure for Indonesia to adhere to structural conditionality, but this has adversely affected Indonesia‘s macro and micro-economic conditions. Indonesia at that time desperately needed loans because of its economic imprudence, fiat monetary system, and monetary speculation. It is hard to resist the actors and agents of globalization.

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Global governance complex According to Anthony McGrew, ―an evolving global governance complex existsembracing states, international institutions, transnational networks and agencies (both public and private)that functions, with variable effect, to promote, regulate, or intervene in the common affairs of humanity.‖166 The global governance complex is embracing all nationstates today. It is inevitable, inescapable, and irresistible. As we have seen from the analysis above, globalization is present at an economic, political, and societal level. In fact globalization and global governance complicate the ability of the state to maintain its sovereignty. The global governance complex frames the regimes and values of international relations. A web of organizations, public and private, domestic and international shapes political regimes and policy, sets standards, and enforces rules on a wide range of issues where sates lack effective authority.167 I have outlined the case of the IMF intervention in Indonesia from 1997-2007 that may fit into this categorization. The process of global governance in Indonesia is less autonomous but driven by hegemonic interests to gain advantage in the name of globalization and undermine national sovereignty.

166

McGrew, A. (2010). Globalization and global politics. In J. Baylis, & S. Smith, Globalization of World Politics (p. 25). Oxford: Oxfor University Press. 167 Perkins, J. (2009). Hoodwinked. New York: Broadway Books, pp. 19, 35, 41.

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Indonesia, from 1997-2007 experienced this global governance in a harsh way. As we have seen above, Indonesia was hit badly from the 1997 Asian financial crisis. The state capacity and autonomy was degraded and almost lead to Balkanization, with the risk of disintegration and becoming a failed state. Indonesia has been bound by numerous international commitments by the globalization and governance regimes. The rule of law became less well obeyed and the situation became very chaotic. A set of regimes, values, and ideas was created for, and enforced by, a variety of globalization actors. In this situation, the grass roots movement consisting of religious groups and civil society urged for restoration of Indonesia against the blatantly foreign intervention in shaping Indonesia‘s economic and political policy.168 In the area of global governance complex, there are in fact three distinct but interrelated processes at work. First the process of global governance complex locates who is the authority in global politics. Transformation of international politics becomes an arena no longer dominated by the state because the state is seen as incompetent or without capacity to solve global multidimensional problems. In another way, the reduction of the state as the central decision making body on policy is due toa lack of central authority and challenges to state autonomy, capacity and legitimacy.

168

Gie, K. K. (2006). Kebijakan Ekonomi Politik dan Hilangnya Nalar (Political Economy Policy and Lost of Reason). Jakarta: Kompas, p. 102.

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Second, where did liberal regime legitimacy come from? An act of imposition, intervention, or even intimidation is certainly against the principles of non-interference and respecting sovereignty that Indonesia or any civilized nations embraced. Learning from Indonesia‘s experience, the idealism of liberalism can ruin the essence of the liberal idea, which is freedom to choose, because it imposesthe views of another actor who has different historical process, cultural identity, and world-view and requires acceptance ofa singular global governance synthesis. Lastly, the global governance complex entails considerable risk to security if it is promoting or regulating its norms and value by intervention. The way that the legitimacy of the state is not being recognized gives rise to suspicion in many different ways. First, the global governance complex may be tending to world government. Second, it is likely to build a sense of uniformity and incorporation of all mankind into a single idea and society. Third, as Patomäkiargues, it may transform people and collective actors to accord with the preferred liberal world order. Then it might give rise to a definition of higher and lower beings, the ‗other‘ may be treated as an innocent to be converted. There also emerges the perceived need for coercive powers to protect the liberal agenda.169

169

Patomaki, H. (2003). Problems of Democratizing Global Governance: Time, Space, and the Emancipatory Process. European Journal of International Relations, pp. 7-8.

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Conclusion In conclusion, globalization and global governance eroded Indonesia‘s national sovereignty from 1997-2007. During this time Indonesia suffered many serious blows. A national government suffered the most and economic and political autonomy were much reduced by the crisis. The Indonesian experience has shown that globalization and global governance is less an autonomous process. It is more an expansion of non-state actor and Western-liberal democratic state hegemony, coupled with economic crises that attenuate national sovereignty.

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Febriaty, H. (2010). Analisis Determinan Cadangan Devisi di Indonesia (Analysis of the Determinants of Foreign Exchange Resreves in Indonesia). Medan: Universitas Sumatra Utara. Frieden, J. (2006). Global Capitalism: Its Fall and Rise in the Twentieth Century. New York: W.W. Norton & Company. Farrington, J. (2002, October). Sovereignty and Global Governance. Retrieved July 27, 2012, from Department for International Development: http://www.odi.org.uk/resources/docs/3171.pdf. Force, P. T. (2002, June). Ensuring Good Governance for Poverty Reduction. Retrieved August 27, 2012, from World Bank: http://siteresources.worldbank.org/INTVIETNAM/Resources/Localizing-MGDs-forPoverty5.pdf. Gie, K. K. (2006). Kebijakan Ekonomi Politik dan Hilangnya Nalar (Political Economy Policy and Lost of Reason). Jakarta: Kompas. Gilpin, R. (1987). The Political Economy of International Relations. New Jersey: Princeton University Press. Griffiths, M., O'Callaghan, T., & Roach, S. (2008). International Relations: The Key Concepts. New York: Routledge. Heriani, F. N., & Arkyasa, M. (2012, July 23). BI Should Regulate Foreign Ownership of National Banks. Retrieved August 20, 2012, from Hukum Online.com: http://en.hukumonline.com/pages/lt500cfb9830e72/bi-should-regulate-foreignownership-of-national-banks. Hewson, M., & Sinclair, T. (1999). Approaches to Global Governance Theory. New York: State University of New York Press, Albany. Hiatt, S. (2007). A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. San Fransisco: Berrett-Koehler Publishers, Inc. Hobson, J. (2000). The State and International Relations. Cambridge: Cambridge University Press. Indonesia, R. o. (1998). Act of the Republic of Indonesia Number 7 of 1992 Concerning Banking as Amended by Act Number 10 of 1998. Retrieved August 18, 2012, from Bank Indonesia: http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B20FC008B49A61/13309/act_1098e.PDF. Indonesia, R. o. (1999). Act of the Republic of Indonesia No. 23 of 1999 Concerning Bank Indonesia. Retrieved August 23, 2012, from Bank Indonesia: http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B20FC008B49A61/1215/act2399.pdf. IMF. (1944, July 22). Articles of Agreement of the International Monetary Fund. Retrieved August 18, 2012, from International Monetary Fund: http://www.imf.org/external/pubs/ft/aa/. IMF. (2000, June). Recovery from the Asian Crisis and the Role of the IMF. Retrieved August 8, 2012, from International Monetary Fund: http://www.imf.org/external/np/exr/ib/2000/062300.htm#box3.

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IMF. (2001, December 13); Indonesia—Letter of Intent,Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding,. Retrieved August 14, 2012, from International Monetary Fund: http://www.imf.org/external/np/loi/2001/idn/02/index.htm. IMF. (2002, November 20). Indonesia—Letter of Intent. Retrieved August 10, 2012, from International Monetary Fund: http://www.imf.org/external/np/loi/2002/idn/03/index.htm. IMF (2005, March). Indonesia: Post-Program Monitoring Discussions. Retrieved August 28, 2012, from International Monetary Fund: http://www.imf.org/external/pubs/ft/scr/2005/cr05108.pdf. IMF. (2012, July 18). Indonesia and the IMF. Retrieved August 23, 2012, from International Monetary Fund: http://www.imf.org/external/country/idn/index.htm?type=23. Kamasa, F. (2011). What China's and India's Economic Development Can Bring to ASEAN? Jurnal Diplomasi, (Vol. 3, No. 1, March 2011 103-117). Katz, C. (2011, January-February). Interpretations of the economic crisis. Retrieved August 31, 2012, from International Socialist Review: http://www.isreview.org/issues/75/feat-katz.shtml. Keohane, R. (2002). Power and Governance in a Partially Globalized World. London: Routledge. Khemani, M. (2008, March 6). Combating corruption in the Commonwealth. Retrieved Auguts 20, 2012, from Commonwealth Quarterly: http://www.thecommonwealth.org/EZInformation/176102/060308combating/. Koh, T. (2009, October 7); Lecture on The Principles of Good Governance. Retrieved 13 August, 2012, from National University Singapore: http://www.spp.nus.edu.sg/ips/docs/pub/sp_tk_The%20Principles%20of%20Good% 20Governance_071009.pdf. Krasner, S. (2001). Rethinking the sovereign state model. Review of International Studies (27, 17-42). Kutan, A., Sudjana, B., & Moradoglu, G. (2012). IMF Programs, financial and real sector performance, and the Asian Crisis. Retrieved August 31, 2012, from City University of Hongkong: http://www.cb.cityu.edu.hk/CONFERENCE/EMRM2012/doc/KUTAN%20Ali.pdf, pp. 25, 29, 40, 24, 38, 49. LAN.(2007). StrategiPenangananKorupsi di Negara-Negara Asia Pasifik (Strategy of Curbing Corruption in Asia-Pacific States), Lembaga Adinistrasi Negara, Pusat KajianAdministrasiInternasional, 2007. Maulia, E. (2008, December 17). Income gap widens in Indonesia, most other countries: ILO. Retrieved August 10, 2012, from The Jakarta Post: http://www.thejakartapost.com/news/2008/12/17/income-gap-widens-indonesiamost-other-countries-ilo.htm

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McGrew, A. (2010). Globalization and global politics. In J. Baylis, & S. Smith, Globalization of World Politics (pp. 25). Oxford: Oxfor University Press Nasution, A. (2009, February 13). http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf. Retrieved August 15, 2012, from BPK: http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf. Naqvi, N. (2012, August 26). The IMF and Us. Retrieved September 4, 2012, from The Express Tribune: http://tribune.com.pk/story/426495/the-imf-and-the-us/. Online, H. (2000, September 21). Privatisasi Indosat Diundur Sampai 2003 (Indosat Privatization Postpones untill 2003). Retrieved August 20, 2012, from Hukum Online.com: http://www.hukumonline.com/berita/baca/hol674/privatisasi-indosatdiundur-sampai-2003. Patberg, P. (2006). Global Governance: Reconstructing a Contested Social Science Concept. Garnett Working Paper, 13. Available at http://www2.warwick.ac.uk/fac/soc/garnet/workingpapers/0406.pdf. Patomaki, H. (2003). Problems of Democratizing Global Governance: Time, Space, and the Emancipatory Process. European Journal of International Relations. Perkins, J. (2009); Hoodwinked. An Economic Hit Man Reveals Why the World Financial Markets Imploded and What We Need to Do to Remake Them. New York: Broadway Books Perkins, J. (2004). Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc. Programme, U. N. (2008). State of the World's Cities 2010/2011: Bridging the Urban Divide. New York: Earth Scan. Quah, J. (2011). Curbing Corruptions in Asian Countries: An Impossible Dream? Bingley: Emerald Group Publishing Limited. Rais, A. (2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation: Save Indonesia!). Yogyakarta: PPSK Press. Ritonga, U. (2002, Juni 18). Kesepakatan Ekonomi sebagai Pengganti LoI IMF (Economic Agreement as a Substitute of IMF's LoI). Retrieved August 20, 2012, from Tempo Interaktif: http://www.tempo.co.id/hg/ekbis/2002/06/18/brk,2002061814,id.html. Roach, S. (2007). Critical Theory and International Relations: a Reader. London: Routledge. Sinaga, A. (2012, June 5). Income, a perilously widening gap. Retrieved 15 August, 2012, from The Jakarta Post: http://www.thejakartapost.com/news/2012/06/05/income-aperilously-widening-gap.html. Statistik, B. P. (2008). Analisis dan Penghitungan Tingkat Kemiskinan Tahun 2008 (Analysis of Poverty Rate in 2008). Jakarta: Badan Pusat Statistik, available at http://daps.bps.go.id/File%20Pub/Analisis%20Kemiskinan%202008.pdf. Stevenson, J. (2000). Preventing Conflict: The Role of the Bretton Woods Institute. New York: Oxford University Press.

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Thirkell-White, B., Grugel, J., & Riggirozzi, P. (2008). Beyond the Washington Consensus? Asia and Latin America in search of more autonomous development. International Affairs (84:3, 501-504). Tri. (2003, July 31). Pasca-IMF, Dikeluarkan Buku Putih (Post-IMF, White Book been Released). Retrieved August 30, 2012, from Suara Merdeka: http://www.suaramerdeka.com/harian/0307/31/nas6.htm. UNDP. (2007). Human Development Report 2007/2008. New York: Palgrave Macmillan. Wijayanto. (2011, April 28). Income, a perilously widening gap. Retrieved August 8, 2012, from Globe Asia: http://www.thejakartaglobe.com/columnists/the-illusion-ofbeing-equal-prosperous-and-employed/437854

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TEINVER V. ARGENTINA: THE MOST FAVORED NATIONS PRINCIPLE IN A MULTIPLE BILATERAL INVESTMENT TREATIES ERA Nenda Inasa Fadhilah

Abstrak Investasi adalah salah satu saluran interaksi ekonomi diantara negaranegara disamping perdagangan di era globalisasi saat ini. Negaranegara bekerja-sama dengan membuat Perjanjian Investasi Bilateral (BIT) untuk menentukan tingkat perlakuan yang akan mereka berikan kepada investor dari negara mitra. Investor asing, baik dari negaranegara maju dan berkembang, mengharapkan negara tuan rumah memberikan perlakuan yang adil serta merata dan perlindungan penuh dan keamanan tanpa diskriminasi dalam rangka untuk mengamankan dan memastikan investasi mereka agar dapat memperoleh keuntungan yang diharapkan. Salah satu prinsip yang terkandung dalam BIT adalah Most Favored Nations (MFN) di mana negara berjanji bahwa mereka akan memperlakukan investor negara mitra itu perlakuan yang "tidak akan kurang" dari investor dari negara-negara lain (tidak ada diskriminasi antara investor asing dari negara yang berbeda). Prinsip MFN ini adalah salah satu sumber sengketa di ICSID terutama terkait dengan masalah yurisdiksi. Dalam tulisan ini, saya akan menganalisis apakah keputusan ICSID terbaru tentang yurisdiksi dalam kasus Teinver SA, Transportes de Cercanias SA & AUTOBUSES Urbanos del Sur SA v Argentina Republic (Kasus Teinver) akhirnya dapat mendefinisikan dan menyelesaikan masalah-masalah yang terkandung dalam prinsip MFN di hukum investasi internasional khususnya pada masalah yurisdiksi. Kata kunci: Investasi, ICSID, Most Favored Nations, Perjanjian Investasi Bilateral, Perjanjian Ekonomi

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Abstract Investment is one of the channels of economic interaction between states beside trade in the current globalization era. States cooperate with each other by concluding Bilateral Investment Treaties (BIT) to define the treatment that they will give to their counterpart’s investors. Foreign investors, both from developed and developing states, expected the host state to give them fair and equitable treatment and full protection and security without discrimination in order to secure and ascertain their investment to acquire expected profit. One of the principles contained in the BITs is the Most Favored Nations (MFN) where a state promised that they will treat the counterpart’s investor the treatment that is “no less favorable” to investor from other states (no discrimination between foreign investors from different states). This MFN principle is one of the sources of dispute in ICSID especially related to the jurisdictional matter. In this paper, I will analyze whether the latest ICSID decision on jurisdiction in the case Teinver S.A., Transportes de Cercanías S.A. & Autobuses Urbanos del Sur S.A. v. Argentine Republic (Teinver Case) finally defined and settle the problems contained in the MFN principle in international investment law specifically on the jurisdictional matter. Keyword: Investment, ICSDI, Most Favored Nations, Bilateral Investment Treaty, Economic Agreement

I. The Most Favored Nations Principle A. History of Most Favored Nations Principle The MFN principle has been acknowledged in trade area for centuries before the emergence of BITs. The earliest acknowledgment of MFN principle is at eleventh century when French and Spanish cities asked Arab princes of Western Africa to afford them treatments equal

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with the Italian traders.170 The MFN principle become the preferred treatment when they unable to gain monopoly.171 However, during and after the first world war occurred, the effects of chilly relationship between warring states and the destruction of economy caused the MFN clause to be not in favorable position172 despite attempts made by the League of Nations in International Economic Conference of 1927.173 After the World War Two, states realized that non-discriminatory treatment is important in the advancement of international economic relations. While the states failed to create International Trade Organization, they successfully adopted General Agreement on Tariffs and Trade (GATT). One of the main principles of GATT is MFN.174 Since 1967, International Law Commission (ILC) started the study on MFN Clause. It has successfully adopted Draft Articles on MostFavoured-Nation Clauses in 1978.175 Member States of UN however,

170

Endre Ustor, First Report on the Most-Favoured-Nation Clause, ¶10, U.N. Doc. A/CN.4/213 (April 18, 1969). 171 Id. ¶19. 172 Id. ¶30-34. 173 Id. ¶37. 174 World Trade Organization, Understanding the WTO: Basics: Principles of the Trading System, http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm (last visited March 16, 2013). 175 Rep. of the Int‟l Law Comm‟n, 33rd Sess., May 8-July 28, 1978, U.N. Doc. A/33/10; GAOR 33d Sess., Supp. No. 10 (1978).

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viewed that the work of ILC in MFN is a complex and therefore it give additional time to the ILC to conduct further study.176

B. The Most Favored Nations Principle in International Trade Since the inception of GATT and later its transformation into World Trade Organization (WTO), MFN has become one of its most important principles.177 The provisions that deal with the MFN principle in WTO are Article I of GATT178 and Article II of the General Agreement on Trade in Service (GATS).179 MFN in WTO means that states may not discriminate between other states for the trade of like products180 or like services.181 As the WTO member states are widespread throughout the world, its mechanism and laws have been a standard in international trade. The WTO Agreements acknowledge the exceptions to the MFN Principle

176

G.A. Res. 63/123, ¶6-8, U.N. Doc. A/RES/63/123 (Jan. 15, 2009). See Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, ¶101, WT/DS246/AB/R (April 7, 2004); Peter van den Bossche, The Law and Policy of the World Trade Organization 321 (2d Ed. 2008). 178 General Agreement on Tariffs and Trade, art. I, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT]. 179 General Agreement on Trade in Services art. II, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1B, 1869 U.N.T.S. 183, 33 I.L.M. 1167 (1994) [hereinafter GATS]. 180 GATT, supra note 17 art. I. 181 GATS, supra note 18 art. II. 177

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which are Free Trade Area182 and Custom Union.183 Therefore, state still able to use its discretion to award certain states more trade benefit compared to other WTO members.

C. The Most Favored Nations Principle in Investment 1. The Attempts to Create a Multilateral Investment Treaty The opposite situation occurs in the field of international investment. There are no widespread substantive rules of investment protection that have been adopted. The efforts to create an investment regime alongside GATT in 1947 under International Trade Organization (ITO) have failed184 and compromises were made to put investment in agenda at the 1995 WTO Ministerial Conference in Singapore.185 In the 1995 WTO Ministerial Conference, the Ministers are only agreeing to establish a working group to examine the relationship between trade and investment.186 Another effort to create a Multilateral Agreement on

182

GATT, supra note 17 art. XXIV:4. GATT, supra note 17 art. XXIV:5. 184 Stephan W. Schill, The Multilateralization of International Investment Law 32-34 (2009). 185 See Zdenek Drabek, A Multilateral Agreement on Investment: Convincing the Sceptics, WTO (June 1998), http://www.wto.org/english/res_e/reser_e/pera9805.doc “[A]t the end, the topic was not included, and the countries have basically only agreed to further explore on the analytical level the issues related to trade and investment.” 186 World Trade Organization, Ministerial Declaration ¶20, Dec. 13, 1996, 36 I.L.M. 218 (1997). 183

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Investment (MAI) by the Organization for Economic Co-operation and Development (OECD) in 1998 has failed.187 However

the

attempts

to

create

widespread

multilateral

investment related convention are not utterly in vain. There are two widespread multilateral investments related treaties that have been successfully created. They are the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) in 1965 and the Multilateral Investment Guarantee Agency (MIGA) in 1985 that was sponsored by the World Bank. The ICSID Convention deals with the settlement of disputes in investment rather than regulating worldwide investment like the WTO Agreements in trade. Meanwhile MIGA deals with insurance framework for foreign investment project. There are 147 states that ratified ICSID Convention188 while MIGA count 178 countries as member.189 The multilateral investment treaties that successfully adopted often in the forms of regional investment treaties such as North American Free Trade Agreement (NAFTA) or in the limited investment sector such

187

Organisation for Economic Co-operation and Development, International Investment Agreements: Multilateral Agreement on Investment, http://www.oecd.org/investment/internationalinvestmentagreements/multilateralagreemen toninvestment.htm (last visited March 18, 2013). 188 International Centre for Settlement of Investment Dispute, Member States, https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=Show Home&pageName=MemberStates_Home (last visited March 18, 2013). 189 Multilateral Investment Guarantee Agency, MIGA Member Countries, http://www.miga.org/whoweare/index.cfm?stid=1789 (last visited March 18, 2013).

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as Energy Charter Treaty.190 The United States also in the process of negotiating the Trans Pacific Partnership with 10 pacific countries191 and the Transatlantic Trade and Investment Partnership with the European Union (EU)192 which contains the agreements on investment between the parties.193 If the Transatlantic Trade and Investment Partnership negotiations succeed, it will be the biggest free trade and investment block.194 2. The Bilateral Investment Treaties and the MFN Clause As there is no WTO version, i.e. overreaching investment world organization, states have relied on multiple BITs and regional arrangements. Thus, there have been no uniform MFN clauses drafted in BITs. It depends on the states to draft the treatments that they want to extend to previous BITs or give exclusively to another state or a group of states.

190

Schill, supra note 23 at 42-43. The United States in the Trans-Pacific Partnership, Office of the U.S. Trade Representative, http://www.ustr.gov/about-us/press-office/factsheets/2011/november/united-states-trans-pacific-partnership (last visited April 26, 2013). 192 Office of the Press Secretary, Statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso, The White House (Feb. 13, 2013), http://www.whitehouse.gov/thepress-office/2013/02/13/statement-united-states-president-barack-obama-europeancouncil-presiden. 193 Id.; The United States in the Trans-Pacific Partnership, supra note 30. 194 Countries and Regions: United States, European Commission, http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/ (last visited April 26, 2013). 191

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The MFN clause in investment at least has 3 components. They include, first, a beneficiary that encompasses the investors or the investments entitled to the MFN treatment, second, a comparator which is another investor and investment that set an MFN treatment standard, and third, a standard of treatment that is expected by the investors or the investments.195 These components could be expanded to include the scope of application of the MFN clause196 and exceptions such as in taxation197 or special arrangements.198 The MFN clause applies in ‗like situations‘ or ‗in like circumstances‘.199 An MFN clause is the future commitment of states200 to treat the foreign investors equally with the treatment contained in the newer BIT and their latest regulation. However the extend of the application of MFN principle in the dispute settlement has always been the source of controversy.201

195

Kenneth J. Vandevelde, Bilateral Investment Treaties: History, Policy, and Interpretation 341 (2010) at 339-343. 196 Vandevelde, supra note 195 at 339. 197 Vandevelde, supra note 195 at 346. 198 Vandevelde, supra note 195 at 339 (Special arrangements such as customs union, free trade area or multilateral and regional agreements on investment). 199 Andreas R. Ziegler, Most-Favoured-Nation (MFN) Treatment, in Standards of Investment Protection 59, 74 (August Reinisch ed., 2008). 200 Id. at 65. 201 August Reinisch, Introduction: Interrelationship of Standards, in Standards of Investment Protection 1, 6 (August Reinisch ed., 2008); Yannick Radi, The Application of the Most-Favoured-Nation Clause to the Dispute Settlement Provisions of Bilateral Investment Treaties: Domesticating the “Trojan Horse”, 18 European Journal of

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Nonetheless, there is considerable uniformity in the MFN Clause although variations still exist among them. This might happen because several European states202 have drafted Model BIT which helps them to guide and standardized the treatment that will give to their counterparts commonly with developing states.203 The Model BIT could be customized by a state at certain provisions to accommodate demand from different counterpart states.204 As the developing states started to create BITs among themselves, the BITs concluded often based on the previous BITs that they have concluded with the developed states.205

D. The MFN Principle Jurisprudence Before the Teinver Case There are numerous cases decided in ICSID that relate to the MFN principle. The first case that involved the MFN principle was Asian Agricultural Products Ltd (AAPL) v. Srilanka. AAPL argued that the ICSID Panel should apply the more favorable liability standards contained in the 1981 Switzerland-Sri Lanka BIT as opposed to UK-Sri Lanka BIT.206 The Panel reasoned the Switzerland-Sri Lanka BIT does not

International Law 757, 760 (2007), http://ejil.oxfordjournals.org/content/18/4/757.abstract. 202 Vandevelde, supra note 195 at 1. 203 Vandevelde, supra note 195 at 1. 204 Vandevelde, supra note 195 at 3. 205 Vandevelde, supra note 195 at 1. 206 Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3, Final Award, ¶9 (June 27, 1990).

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adopted a ―strict liability‖ standard207 and thus in the absence of specific provision in the BIT, the Panel must apply Switzerland-Sri Lanka BIT as a lex specialis rather than international law as lex generalis.208 Perhaps, the first and most famous case in ICSID that related with the application of the MFN principle in the ICSID jurisdiction is Maffezini v. Spain. The Maffezini case involved the same Spain-Argentina BIT with the current case although the respondent is Spain. Maffezini as the claimant argued that the court should apply the Chile-Spain BIT that contains more favorable provision,209 which the claimant does not have to wait for 18 months in local court before they able to submit the case to ICSID.210 The Panel agreed with the Claimant‘s argument and noting that there is no requirement for the Claimant to exhaust the local remedies, thus the case may proceed.211 The Maffezini reasoning has been followed by cases such as Siemens,212 Gas Natural213 and Suez Vivendi214 but rejected, for example, in Salini,215 Plama216 and Berschader.217

207

"Id. ¶45 (“Strict liability" means the Sri Lankan Government is “liable for any destruction of the investment even if caused by persons whose acts arc not attributable to the Government and under circumstances beyond the State's control.”) 208 Id. ¶54. 209 Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objectons to Jurisdiction, ¶1 (Jan. 25, 2000). 210 Id. ¶39-40. 211 Id. ¶62. 212 Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Decision on Jurisdiction, ¶121 (Aug. 3, 2004). 213 Gas Natural SDG, S.A. v. The Argentine Republic, ICSID Case No. ARB/03/10, Decision of the Tribunal on Preliminary Questions on Jurisdiction, ¶30 (June 17, 2005).

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II.

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Teinver v. Argentine Republic

A. Background of the Issue Teinver (Transportes) (collectively,

S.A. and

(Teinver), Autobuses

―Claimants‖)

Transportes Urbanos

are Spanish

del

de

Cercanias

Sur

S.A.

S.A.

(Urbanos)

companies218 that owned

investments in Aerolíneas Argentinas S.A. (ARSA) and Austral-Cielos del Sur S.A. (AUSA) (collectively, ―the Argentine Airlines‖).219 The source of dispute between the parties were the alleged unlawful nationalization and other measures related to Argentine Airlines taken by the Argentine Congress in December 2008220 and also

214

Suez, Sociedad General de Aguas de Barcelona, S.A.and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19, Decision on Jurisdiction, ¶62-63, 68, (Aug 3, 2006). 215 Salini Costruttori S.p.A. and Italstrade S.p.A. v. The Hashemite Kingdom of Jordan, ICSID Case No. ARB/02/13, Decision on Jurisdiction, ¶115-119 , (Nov. 29, 2004) (The ICSID Panel refused to accept the jurisdiction because the MFN clause does not explicitly include the dispute resolution procedure nor implicitly by adding the words “all rights” or “all matters” in the MFN clause.). 216 Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction, ¶216-227, (Feb. 8, 2005) (In Plama, the ICSID Panel rejected the Maffezini approach because the expansion of the MFN principle to dispute settlement must explicitly stated by the state parties in the BIT). 217 Vladimir Berschader & Moise Berschader v. The Russian Federation, Arbitration V (080/2004), ¶185-208., (April 21, 2006) (The terms “all matters” in the MFN clause cannot expand to dispute settlement because it cannot be interpreted literally nor the parties to the BIT have the intention to do so.). 218 Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic (Teinver), ICSID Case No. ARB/09/1, Decision on Jurisdiction, ¶1 (Dec. 21, 2012). 219 Id. ¶2. 220 Id. ¶8.

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creeping expropriation that allegedly started since October 2004.221 Disputes centered on Argentine regulation on airfare caps between 2002 and 2008 and disagreement on remedy for the expropriation of the Claimant‘s shares in the airlines.222 The Claimants requested arbitration against Respondent on December 11, 2008.223 The Claimants also invoked Argentina‘s consent to dispute settlement through ICSID Treaty and MFN clause contained in Article IV(2) 1991 Agreement between the Argentine Republic and the Kingdom of Spain on the Reciprocal Promotion and Protection of Investments (Spain-Argentina BIT) and the procedural clause found in Article 1991 Bilateral Investment Treaty between the United States of America and the Argentine Republic (U.S.-Argentina BIT).224 The Claimants appointed Henri C. Alvarez while the Respondent appointed Dr. Kamal Hossain and both parties agreed to ICSID proposal to appoint Judge Thomas Buergenthal as the President of the Tribunal.225

221

Id. ¶8. Id. ¶8. 223 Id. ¶9. 224 Id. ¶10. 225 Id. ¶14, 16, 19-20. 222

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B. The MFN Issue in Teinver Case 1. Spain-Argentina BIT as Jurisdictional Basis Article IV(2) of the Spain-Argentina BIT called for treatment that shall be no less favorable than accorded by each party to investors from a third country in all matters that governed by the treaty.226 The MFN treatment does not extend for treatment from future treaties made in connection with free trade areas, customs unions, common markets, a regional integration agreement and a previous treaty regarding organization of mutual economic assistance,227 and tax deductions and similar privileges.228 As for the investor-state dispute settlement provision, the SpainArgentina BIT required the investor to settle the dispute amicably with the state party after the dispute raised.229 After 6 months, if the investor and the state party concerned failed to reach settlement, the investor may bring the claim to the tribunal in the territory where the investment was made.230 The investor is only able to bring the claim to ICSID231 18 months

226

Agreement on the Reciprocal Promotion and Protection of Investments, SpainArgentina, art. IV(2), Oct. 3, 1991, 1699 U.N.T.S. 202. 227 Id. art. IV(3). 228 Id. art. IV(4). 229 Id. art. X(1). 230 Id. art. X(2). 231 Id. art. X(4).

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after the investor initiated the judicial proceeding in the national tribunals232 or if both parties agreed to.233

2.The Invocation of U.S.-Argentina BIT The U.S.-Argentina BIT has the ‗fork in the road‘ dispute settlement clause where the investors covered could choose to submit the dispute to the national courts, administrative tribunals,234 any applicable, previously agreed dispute-settlement procedures235 or six months after the dispute arisen has passed and the parties have been through consultation and negotiation236 for settlement by binding arbitration such as ICSID237 or any other arbitration institution as agreed.238 The Claimants in their Request for Arbitration and Memorial on the Merits invoked Argentina‘s consent to proceeding in ICSID through the MFN clause contained in the Spain-Argentina BIT and took the example of the dispute settlement mechanism contained in the 1991 Bilateral Investment Treaty between the United States of America and the Argentine Republic (U.S.-Argentina BIT).239

232

Id. art. X(3)(a). Id. art. X(3)(b). 234 Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.Argentina, art. VII(2)(a),Nov. 14, 1991, S. Treaty Doc. No. 103-2 (1993). 235 Id. art. VII(2)(b). 236 Id. art. VII(3)(a)(i). 237 Id. art. VII(3)(a). 238 Id. art. VII(3)(a)(iv). 239 Teinver, supra note 56, ¶138. 233

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3.The Invocation of Australia-Argentina BIT Argentina in the Memorial of Jurisdiction argued the six month of negotiation is ―one of the condition‖ that must be satisfied to invoke Respondent‘s consent.240 Then, the Claimants in their Request for Arbitration and Counter-Memorial argued that the Tribunal had jurisdiction over the dispute because the Claimants also have satisfied the conditions set in the Australia-Argentina BIT that applies through the Spain-Argentina BIT‘s MFN clause.241 The Australia-Argentina BIT was adopted on August 23, 1997. The BIT regulated that an investment dispute may be brought to ICSID242 if the dispute cannot be settled amicably.243 Argentina objects to the Claimants‘ assertion to rely on the Australia-Argentina BIT because it is not timely and must be dismissed.244 The Claimants claimed the invocation of Australia-Argentina BIT is not untimely because the Claimants have relied on MFN clause ―even before they submitted their Request for Arbitration‖245 and to counter

240

Teinver, supra note 56, ¶78. Teinver, supra note 56, ¶138. 242 Agreement on the Promotion and Protection of Investments art. 13(3)(a), AustraliaArgentina, Aug. 23 1995, 1985 U.N.T.S. 85. 243 Id. art. (13)(1). 244 Teinver, supra note 56, ¶148. 245 Teinver, supra note 56, ¶158. 241

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Argentina‘s objection ―with respect to the six-month waiting period in its Memorial on Jurisdiction.246 The Claimants should have consistently relied on the same comparator BIT from the start. Although the Claimants argue that they have relied on MFN clause from the start, they should have made clear which another state‘s BIT that they will use as comparator BIT. The switch of comparator BIT is confusing and made difficult for Argentina as the Respondent state to make the argument accordingly to fit the comparator BIT which dispute settlement clause has been used by the Claimants.

C. Panel Decision and Reasoning The Claimants in their written and oral submissions argue that (1) the Panel has jurisdiction over the case due to the MFN clause in SpainArgentina BIT that makes it possible for the Claimants to rely on more favorable treatment in the Australia-Argentina BIT247 and even if the jurisdiction is based U.S.-Argentina BIT, there will be no contradiction since the Claimants have not submitted the case to Argentine Courts.248 (2) The Claimants already relied on MFN Clause before the Request for Arbitration submitted and the invocation of Australia-Argentina BIT in the Counter-Memorial on Jurisdiction is in response of to Argentina‘s

246

Teinver, supra note 56, ¶158. TTeinver, supra note 56, ¶138. 248 Teinver, supra note 56, ¶157. 247

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objection to 6-month waiting period in Memorial on Jurisdiction.249 In the alternative, the Claimants also argued that the Claimants have fulfilled the requirements set forth in Article X of Spain-Argentina BIT or excused for reasons of futility.250 The Respondent argued that the MFN clause is not applied because: (1) the jurisdictional requirements as contained in Article X of the Spain-Argentina Treaty is not to be set aside or disregarded251 and must be accepted by investor to invoke arbitration clause.252 (2) Both Argentina and Spain never accepted ―the application of the Treaty‘s MFN clause‖ to invoke their consent to ICSID253 and thus it should be deemed to be authentic interpretation based on Article 31(3) of the Vienna Convention on the Laws of Treaty (VCLT).254 (2) The invocation of the Australia-Argentina MFN in the Claimant‘s Counter Memorial is against the principle of good faith and barred by estoppels.255

249

Teinver, supra note 56, ¶158. Teinver, supra note 56, ¶73(ii) (The Claimant argue that it will be impossible or difficult for them to settle the claim within 6 months and to start the judicial proceeding for 18 months in accordance with Article X of the Spain-Argentina BIT before a dispute may be submitted to ICSID.) 251 Teinver, supra note 56, ¶140. 252 Teinver, supra note 56, ¶141. 253 Teinver, supra note 56, ¶146. 254 Teinver, supra note 56, ¶147. 255 Teinver, supra note 56, ¶148. 250

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The Panel decides that it had jurisdiction over the case based on the MFN clause of the Spain-Argentina BIT.256 The panel reasoned that (1) MFN clause of Spain-Argentina BIT contained the words ―all matters‖ which unambiguously inclusive and Claimants have satisfied the requirements contained in Article 13 of Australia-Argentina BIT.257 Further, the U.S.-Argentina BIT and Australia-Argentina BIT have more advantages compared to Spain-Argentina BIT.258 Besides, the Claimants have not selected the ‗fork on the road‘ under U.S. Argentina BIT where they will be unable to bring the case to ICSID if it has been brought to local court.259 (2) There is no harm for the Respondent caused by the Claimants‘ change of reliance to Australia-Argentina BIT from U.S. Argentina BIT.260

III.

The Teinver Decision: Is the Panel Finally Defined and Solve

the Confusion on the Application of MFN Clause in the InvestorState Dispute Resolution? In Teinver, the Panel streamlined the application of MFN clause to (1) whether or not the MFN clause in Spanish-Argentina BIT applies to investment dispute resolution and (2) whether or not it is fair for the

256

Teinver, supra note 56, ¶186. Teinver, supra note 56, ¶186. 258 Teinver, supra note 56, ¶184. 259 Teinver, supra note 56, ¶184. 260 Teinver, supra note 56, ¶185. 257

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Claimants to add another comparator BIT as basis for the Panel‘s jurisdiction in the middle of the proceeding?

A. The Application of the MFN Clause in Dispute Resolution The problems in the invocation of MFN clause often stemmed from the disagreement on the interpretation of the MFN clause, specifically on whether it should be interpreted broadly or strictly. According to August Reinisch, the most contentious issue in the interpretation of MFN clauses lies not on the substantive standard of investment treatment but rather on the extent of the MFN clause in dispute settlement, particularly in jurisdictional matters,261 as in the current case. The Panel in their reasoning mentioned the ordinary meaning interpretation of Article IV262 and noted that the Spain-Argentine BIT contains an MFN clause that applied in all matters regulated by the BIT263 thus supposed to include the dispute settlement clause. However, the BIT does provide exceptions for the MFN clause. They are the treatment granted to investors of a third state that participate in free trade area, customs union, common market, regional integration or organization of

261

Reinisch, supra note 40, at 6. Teinver, supra note 56, at 33. 263 Teinver, supra note 56, ¶160; Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64, art. IV(2). 262

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mutual economic assistance concluded by agreement before the BIT264 and taxation.265 Again, here, Spain and Argentina as the state parties did not explicitly exclude the dispute settlement from the exception of the MFN clause treatment. The Panel also stated that investment arbitration jurisprudence especially in the matters of ordinary meaning of the MFN clause has not been consistent.266 Although, the Panel noted that in cases related to MFN clause within Spain-Argentina BIT such as Maffezini, Gas Natural, Suez InterAguas, Suez Vivendi and Impregilo, the Panels in respective cases decided that the term ―all matters‖ applies to Article X that concerned on Dispute Resolution.267 In order to analyze the problem further, the Panel also relied on UNCTAD‘s MFN Treatment publication268 that sorts the application of MFN in jurisdictions into two categories. The first category is the admissibility requirements where the Claimants ―have invoked the MFN treatment clause to override a procedural requirement that constitutes a

264

Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64, art. IV(3). 265 Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64, art. IV(4). 266 Teinver, supra note 56, ¶165-166. 267 Teinver, supra note 56, ¶165. 268 Teinver, supra note 56, ¶168-172.

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condition for the submission of a claim to international arbitration‖269 as occurred in the current case. In the previous cases that involved admissibility such as Maffezini, Siemens, Gas Natural, National Grid, Suez InterAguas, AWG Group, Impregilo, Hothcief and Abaclat showed that generally the MFN treatment clause could override a procedural requirement.270 Exception where the Panels refused to override a procedural requirement only occurred in Wintershall, ICS and Daimler.271 The second category is where a Claimant attempts to extend the arbitral tribunal‘s scope of jurisdiction beyond the BIT.272 It worth noting that the Panels in previous cases such as Salini, Plama, Telenor, Berschader and Tza Yap Shum has been generally refused to extend the arbitral tribunal‘s scope of jurisdiction beyond the BIT, except in RosInvestCo case.273 The Panel tried to clarify the different reasoning that caused different outcomes in the cases that involved the application of MFN to dispute resolution. The Panel noted that each case has different facts that influenced the outcome of the case whereas the Panel that asked

269

U.N. Conference on Trade and Development, Most Favoured-Nation Treatment: UNCTAD Series on Issues in International Agreements II, at 66, UNCTAD/DIAE/IA/2010/1, U.N. Sales No. 10.II.D.19; Teinver, supra note 56, ¶169. 270 Teinver, supra note 56, ¶170. 271 Teinver, supra note 56, ¶170. 272 U.N. Conference on Trade and Development, supra note 107, at 67; Teinver, supra note 56, ¶169. 273 Teinver, supra note 56, ¶171.

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admissibility requirements does not consider the extent of the scope of jurisdiction and vice versa.274 The panel turns to Maffezini whereas it listed the dispute resolution related clause that may not be overridden by an MFN clause due to public policy.275 The Panel in Teinver also notes that this approach has been generally preferred although it has been criticized in Salini and Wintershall as not adequate to prevent forum shopping and questioned in Plama as there is no basis for these requirements.276 As the current case involves admissibility requirements, the Panel agreed that the case may proceed as it does not cross the boundary of the jurisdiction.277 Notably, Wintershall deemed that the requirement to pursue local remedies for 18 months in an Argentinean Court is a condition to the host State‘s consent for arbitration and an admissibility obstacle.278 However, this approach is in the minority and could be deemed to depart from the rationale of the differentiation between the admissibility where time is the only wall for the Claimants to submit the case to ICSID and expansion of

274

Teinver, supra note 56, ¶177. Maffezini, supra note 47, ¶63 (They are exhaustion of local remedies, „the fork in the road‟ clause, changing the arbitration forum, the agreement on a particular forum which is a highly institutionalized and very precise procedural mechanism such as NAFTA.) 276 Teinver, supra note 56, ¶180; Plama supra note 54, ¶221. 277 Teinver, supra note 56, ¶182. 278 Wintershall Aktiengesellschaft v. Argentine Republic, ICSID Case No ARB/04/14, Award, ¶160(3) (Dec. 8 2008). 275

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jurisdiction.279 Besides, the MFN clause in Argentina-Germany BIT which became the basis in Wintershall deemed to be more constrained280 than the Spain-Argentina BIT. It is worth noting that if the Claimants used the procedural aspect in the Spain-Argentina BIT, the case could be end up in the ICSID anyway albeit with more procedural hurdles without the need to exhaust local remedies. Therefore, the Australia-Argentina BIT could be deemed to be more favorable than the Spain-Argentina BIT as it does not requires the total twenty-four months time that divided with the six months for the investor to tried to settle the claim amicably281 and eighteen months time for investor to brought the claim in local court.282 The Panel also noted that the Claimants argued on limited application

of

procedural

requirements

specifically

whether

the

Claimants may bypass the negotiation and local court part of the dispute resolution.283 If the Claimants argued in more broad application such as replacing the arbitral forum or rules or to broaden the issue that may be arbitrated,284 there will be much more complication that occurs. The

279

Andrea Marco Steingruber, Consent in International Arbitration 314 (2012). Teinver, supra note 56, ¶160. 281 Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64, art. X(1)-X(2). 282 Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64, art. X(2)-X(3). 283 Teinver, supra note 56, ¶182. 284 Teinver, supra note 56, ¶182. 280

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limited application of procedural requirements is a gateway issue in the admissibility of the Claimants‘ claim. The negotiation and local court requirements are the gate to a room that must be opened by the Claimants to bring the claim. This is not the case where the Claimants requested to change the arbitral forum or rules that could be compared to request to open a door to another room that only open to investors from third state. If those clauses are overridden, there could be forum shopping where the investors choose the forum that assumed to be favorable despite it is not originally available in their BIT.

B. The Change in the Comparator BIT The second problem is on whether or not it is right for the Claimants to change the comparator BIT from U.S.-Argentina to Australia-Argentina during the proceeding and its relation with the ‗fork in the road clause‘ contained in U.S.-Argentina BIT. The application of the ‗fork in the road clause' means that an investor that benefitted under the U.S.-Argentina BIT must choose either going to the local court or ICSID. The Claimants argued that the invocation of the AustraliaArgentina BIT in the Counter-Memorial on Jurisdiction did not matter since they already relied on MFN clause and Respondent only raised objection with respect to the six month waiting period in the Memorial on

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Jurisdiction.285 Contrary, the Respondent argued that the invocation of the Australia-Argentina MFN through MFN Clause in the Counter-Memorial of Jurisdiction is ―against the principle of good faith and should be barred by estoppel.‖286 The argument of Respondent is understandable since if the Claimants changed their basis for argument specifically BIT that they used as basis for jurisdiction of the Court, it will be difficult for the Respondent to prepare the appropriate defense. It will also difficult for the Panel to decide which comparable BIT should become the basis of jurisdiction. The Panel however, declared that the addition of AustraliaArgentina BIT did not preclude the jurisdiction of the Panel over the case.287 The Panel noted that both the U.S.-Argentina BIT and AustraliaArgentina BIT have the same advantage, which is the ―possibility to access arbitration with fewer procedural preconditions‖288 therefore there is no actual or perceived harm caused.289 Besides that, the Claimants had not bring the claim to the local court which constituted a ‗fork in the road‘ for the application of the U.S.-Argentina BIT290 and it has followed the

285

Teinver, supra note 56, ¶158. Teinver, supra note 56, ¶148. 287 Teinver, supra note 56, ¶186. 288 Teinver, supra note 56, ¶184. 289 Teinver, supra note 56, ¶185. 290 Teinver, supra note 56, ¶184. 286

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negotiation requirement contained in the provision of dispute resolution in Australia-Argentina BIT.291 The later requirement, i.e. to follow the whole procedural requirements contained in the BIT that invoked by MFN clause is important to prevent the investors to cherry picking the dispute resolution clause. Conclusion & Recommendation The Panel in the Teinver case has strengthened the idea that MFN clause could extend to the admissibility issue but not to expand the scope of the jurisdiction or to change the forum of arbitration. This approach, firstly decided in Maffezini has been generally accepted in numerous ICSID decisions. Although there are some cases that dissent to this approach, notably in Winterhall but it can be considered to be a minority approach. The Panel also clarified that in order to invoke the benefit of MFN Clause in dispute resolution, the Claimants must prove that comparator BIT has more favorable dispute resolution clause compared to the current BIT that applied to the investment. Such benefit only applies to the admissibility requirement and the Claimants must follow the whole dispute resolution clause in the comparator BIT. Although the ICSID

291

Teinver, supra note 56, ¶186.

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cases will not bind future application of MFN clause but the reference to the current case specifically in the application of MFN principle in the admissibility issue is recommended. In order to avoid the jurisdictional problem within the dispute resolution system, it will be highly recommended for the drafter of BITs to specifically and explicitly mention whether or not the MFN clause applied to dispute resolution between host state and the investors. However, the Panel should have come to different conclusion in regard to the switch of comparator BIT in the middle of proceeding like in the Teinver case. Although the Panel accept the jurisdiction because the Claimants have fulfilled the jurisdictional requirements both in U.S.Argentina BIT and Australia-Argentina BIT, but, if such thing ensue again in the future, it will be difficult for the respondent states to prepare the proper defense accordingly.

BIBLIOGRAPHY A. Articles/Books/Reports Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R (April 7, 2004); Drabek, Zdenek, A Multilateral Agreement on Investment: Convincing the Sceptics, WTO (June 1998), http://www.wto.org/english/res_e/reser_e/pera9805.doc European Commission, Countries and Regions: United States, http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/ (last visited April 26, 2013). G.A. Res. 63/123, U.N. Doc. A/RES/63/123 (Jan. 15, 2009). International Centre for Settlement of Investment Dispute, Member States, https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal= ShowHome&pageName=MemberStates_Home (last visited March 18, 2013). Multilateral Investment Guarantee Agency, MIGA Member Countries, http://www.miga.org/whoweare/index.cfm?stid=1789 (last visited March 18, 2013).

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Office of the Press Secretary, Statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso, The White House (Feb. 13, 2013), http://www.whitehouse.gov/the-pressoffice/2013/02/13/statement-united-states-president-barack-obama-europeancouncil-presiden. Office of the U.S. Trade Representative, The United States in the Trans-Pacific Partnership, http://www.ustr.gov/about-us/press-office/fact-sheets/2011/november/united-statestrans-pacific-partnership (last visited April 26, 2013 Organisation for Economic Co-operation and Development, International Investment Agreements: Multilateral Agreement on Investment, http://www.oecd.org/investment/internationalinvestmentagreements/multilateralagre ementoninvestment.htm (last visited March 18, 2013). Radi, Yannick, The Application of the Most-Favoured-Nation Clause to the Dispute Settlement Provisions of Bilateral Investment Treaties: Domesticating the “Trojan Horse”, 18 European Journal of International Law 757 (2007), http://ejil.oxfordjournals.org/content/18/4/757.abstract. Reinisch, August (ed), Standards of Investment Protection, (2008); Rep. of the Int‟l Law Comm‟n, 33rd Sess., May 8-July 28, 1978, U.N. Doc. A/33/10; GAOR 33d Sess., Supp. No. 10 (1978). Schill, Stephan W., The Multilateralization of International Investment Law (2009). Steingruber, Andrea Marco, Consent in International Arbitration (2012). U.N. Conference on Trade and Development, Most Favoured-Nation Treatment: UNCTAD Series on Issues in International Agreements II, at 66, UNCTAD/DIAE/IA/2010/1, U.N. Sales No. 10.II.D.19 Ustor, Endre, First Report on the Most-Favoured-Nation Clause, U.N. Doc. A/CN.4/213 (April 18, 1969). Van den Bossche, Peter, The Law and Policy of the World Trade Organization (2d Ed. 2008). Vandevelde, Kenneth J., Bilateral Investment Treaties: History, Policy, and Interpretation (2010), World Trade Organization, Understanding the WTO: Basics: Principles of the Trading System, http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm (last visited March 16, 2013). B. Cases Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3, Final Award, (June 27, 1990).

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Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objectons to Jurisdiction, (Jan. 25, 2000). Gas Natural SDG, S.A. v. The Argentine Republic, ICSID Case No. ARB/03/10, Decision of the Tribunal on Preliminary Questions on Jurisdiction, ¶30 (June 17, 2005). Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction, ¶216-227, (Feb. 8, 2005). Salini Costruttori S.p.A. and Italstrade S.p.A. v. The Hashemite Kingdom of Jordan, ICSID Case No. ARB/02/13, Decision on Jurisdiction, ¶115-119 , (Nov. 29, 2004). Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Decision on Jurisdiction, ¶121 (Aug. 3, 2004). Suez, Sociedad General de Aguas de Barcelona, S.A.and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19, Decision on Jurisdiction, ¶62-63, 68, (Aug 3, 2006). Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic (Teinver), ICSID Case No. ARB/09/1, Decision on Jurisdiction, ¶1 (Dec. 21, 2012). Vladimir Berschader & Moise Berschader v. The Russian Federation, Arbitration V (080/2004), ¶185-208., (April 21, 2006) Wintershall Aktiengesellschaft v. Argentine Republic, ICSID Case No ARB/04/14, Award, ¶160(3) (Dec. 8 2008). C. Legislations/Treaties Agreement on the Promotion and Protection of Investments, Australia-Argentina, Aug. 23 1995, 1985 U.N.T.S. 85. Agreement on the Reciprocal Promotion and Protection of Investments, Spain-Argentina, Oct. 3, 1991, 1699 U.N.T.S. 202. General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 General Agreement on Trade in Services Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, 1869 U.N.T.S. 183, 33 I.L.M. Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.Argentina, Nov. 14, 1991, S. Treaty Doc. No. 103-2 (1993). World Trade Organization, Ministerial Declaration ¶20, Dec. 13, 1996, 36 I.L.M. 218 (1997).

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RESENSI BUKU Judul

: Refleksi dan Kompleksitas Hukum Humaniter

Penulis buku

: Prof. KGPH. Haryomataram, SH., Brigjen (Purn)

Penerbit

: Pusat Studi Hukum Humaniter dan HAM (terAs) Fakultas Hukum Universitas Trisakti

Bahasa

: Indonesia

Jumlah halaman

: x + 478

Tahun penerbitan

: 2012

Pembuat resensi

: Ratih Wulandari, S.IP.

Hukum Humaniter secara lengkap diterjemahkan

dari

International

Humanitarian Law Applicable in Armed Conflict. Namun, pada masa lalu Hukum Humaniter juga dikenal sebagai Hukum Konflik Bersenjata atau Hukum Perang. Hukum

Humaniter

mengatur

pelaksanaan konflik termasuk alat, cara dan metode yang digunakan dalam konflik senjata (sering dipersamakan dengan

perang),

serta

perlindungan

korban dari kejadian konflik bersenjata di tingkat nasional maupun internasional.

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Pada prinsipnya, Hukum Humaniter berlaku setelah perang atau konflik senjata terjadi, tidak berkaitan dengan melarang perang dan tidak menentukan pihak yang benar atau salah dalam perang.

―Prinsip

pembeda‖ (distinction principle) dalam Hukum Humaniter adalah antara golongan combatant, yaitu pihak yang aktif terlibat dalam permusuhan, dan penduduk sipil (civil population) yang tidak aktif turut serta dalam konflik. Sumber Hukum ini berasal dari berbagai konvensi dan protokol, terutama Hukum Den Haag (The Hague Laws), yang mengatur tentang alat dan cara berperang, dan Hukum Jenewa (The Geneva Laws), yang mengatur tentang perlindungan terhadap mereka yang menjadi korban perang. Pada dasarnya bentuk konflik senjata ada yang bersifat internasional, di mana konflik terjadi antara dua negara atau lebih, dan konflik senjata bersifat non-internasional, di mana konflik terjadi di salah satu negara antara aktor non-pemerintah dengan pemerintah. Dalam konflik senjata bersifat internasional, seluruh perangkat Hukum Humaniter berlaku, namun dalam konflik yang bersifat non-internasional yang berlaku hanya Konvensi Jenewa 1949, dan/atau Protokol Tambahan II 1977. Pasal 3 Konvensi Jenewa 1949 menetapkan bahwa orang yang tidak terlibat secara aktif dalam konflik senjata (termasuk anggota Angkatan Perang yang meletakkan senjata mereka atau karena terluka, sakit, ditahan) harus diperlakukan dengan manusiawi tanpa diskriminasi ras, agama atau kepercayaan, gender, keturunan atau harta, atau kriteria lainnya.

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Dalam konflik yang bersifat non-internasional, orang yang tidak terlibat aktif dalam konflik mempunyai hak dasar manusia yang tidak dapat diambil dalam keadaan apa pun dan harus dilindungi, yaitu (1) terhadap tindakan segala kekerasan atas jiwa dan raga, (2) dari tindakan yang terjadi terkait dengan konflik senjata, seperti penangkapan, penahanan dan pengasingan, harus diinformasikan dalam bahasa yang dimengerti dan memperoleh perlindungan selama masa penahanan, (3) dari penjatuhan hukuman tanpa didahului keputusan pengadilan dengan standar yang dapat diakui oleh bangsa beradab lainnya, (4) tempat penahanan perempuan harus dipisah kecuali keluarganya pun ditahan, dan (5) Orang yang terluka atau sakit harus dikumpulkan dan dirawat di mana

terdapat sebuah

badan

humaniter netral,

seperti Komite

Internasional Palang Merah, dan dalam pengaturan perawatan tersebut membutuhkan

persetujuan

khusus

dengan

pihak-pihak

konflik.

Pelaksanaan ketentuan tersebut tidak mengubah kedudukan hukum pihak-pihak dalam konflik. Buku

ini

merupakan

kumpulan

pemikiran

Prof.

KGPH.

Haryomataram, seorang tokoh ternama Indonesia di bidang Hukum Humaniter, yang telah disampaikan dalam berbagai pertemuan ilmiah seperti seminar, lokakarya, pemaparan maupun konferensi hukum humaniter baik di tingkat nasional maupun internasional, termasuk dalam pidato pengukuhan Guru Besar Ilmu Hukum di Universitas Trisakti. Puluhan buku penulis mengenai Hukum Humaniter telah diterbitkan.

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Buku terdiri dari lima bab, di mana bab I adalah tipe-tipe konflik bersenjata, bab II adalah mengenai konflik internal dan permasalahannya, bab III berjudul konflik bersenjata di era abad ke-20, bab IV tentang aspek-aspek tanggung jawab negara dalam hukum humaniter, dan bab V bertemakan masalah-masalah lain. Buku Hukum Humaniter menjelaskan subyek yang menarik namun kompleks, dengan cara yang dapat mudah dipahami, untuk orang awam sekalipun yang bukan lulusan Sarjana Hukum, mengenai teori-teori termasuk

uraian,

penjelasan

dan

analisa

perkembangan

hukum

humaniter, serta permasalahan praktis yang dihadapi oleh negara-negara. Situasi dan kondisi yang relevan dan faktual untuk Indonesia telah dilihat dari aspek Hukum Humaniter termasuk mengenai keadaan darurat, terorisme, situasi kekerasan dan ketegangan dalam negeri, perang pembebasan negara (self-determination), dan negara netral dalam sengketa bersenjata di laut.

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ISTILAH HUKUM Kemal Haripurwanto, S.H., LL.M. Jus dispositivum Jus Dispositivum means the law adopted by consent. It is the category of international law that consists of norms derived from the consent of states. It is founded on the self-interest of the participating states. Jus dispositivum binds only those states consenting to be governed by it. Norma yang mengatur. Ia hanya bersifat mengatur, oleh karenanya tidak memaksa dapat disimpangi. Pengertian jus cogen menunjuk pada kaidah atau norma tertentu Civil law Civil law (or civilian law) is a legal system originating in Western Europe, intellectualized within the framework of late Roman law, and whose most prevalent feature is that its core principles are codified into a referable system which serves as the primary source of law. This can be contrasted with common law systems whose intellectual framework comes from judge-made decisional law which gives precedential authority to prior court decisions on the principle that it is unfair to treat similar facts differently on different occasions (doctrine of judicial precedent) Civil law (atau civilian law) adalah sebuah sistem hukum yang berasal dari Eropa Barat, yang dibentuk dalam kerangka berpikir hukum Romawi, dan yang ciri utamanya ialah bahwa prinsip pokoknya dikodifikasi

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dalam suatu sistem rujukan yang menjadi dasar utama hukum. Istilah civil law ini dapat dikontraskan dengan sistem common law di mana kerangka berpikirnya berasal dari hukum yang dibuat oleh hakim yang memberikan otoritas preseden atas keputusan pengadilan sebelumnya dengan prinsip bahwa tidak adil untuk menerapkan fakta yang serupa secara berlainan dalam waktu yang berbeda (doktrin keputusan hukum atas dasar preseden). Force Majeure Force mejeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party's nonperformance entirely, but only suspends it for the duration of the force majeure. Force majeure (keadaan kahar) adalah suatu kausul dalam kontrak yang pada dasarnya membebaskan kedua belah pihak dari kewajiban membayar atau kewajiban lain ketika suatu kejadian luar biasa atau keadaan di luar kendali para pihak, seperti perang, aksi mogok, kerusuhan, kejahatan, atau suatu kejadian yang disebut dalam istilah hukum sebagai tindakan Tuhan (Act of God) seperti badai, banjir, gempa bumi, letusan gunung berapi, dan lain-lain, yang mencegah satu atau kedua pihak dari memenuhi kewajiban-kewajiban mereka atas dasar

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kontrak itu. Dalam praktik, pada umumnya klausul force majeure tidak membebaskan suatu pihak atas tidak dilaksanakannya kewajiban sesuai kontrak secara keseluruhan, namun hanya untuk sementara menunda pelaksanaan kewajiban itu selama adanya force majeure.

and order exist for the purpose of establishing justice and when they “ Law fail in this purpose they become the dangerously structured dams that block the flow of social progress. ” - Martin Luther King, Jr.-

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TENTANG PENULIS Damos Dumoli Agusman, SH., MA, Lulusan dari Fakultas Hukum Universitas Padjadjaran Bandung tahun 1987. Penulis menempuh pendidikan lanjutan di University of Hull, Inggris dan memperoleh gelar Master of Arts di bidang Hukum Internasional dan Politik pada tahun 1991. Penulis pernah mengikuti program hukum internasional pada The Hague Academy of International Law, Den Haag, Belanda. Penulis pernah menjabat sebagai Direktur Perjanjian Ekonomi dan Sosial Budaya pada Kementerian Luar Negeri tahun 2006-2010. Saat ini penulis bertugas sebagai Konsul Jenderal RI di Frankfurt. Adrianus Adityo Vito Ramon, SH., LL.M (Adv) Kepala Seksi Hukum Udara, Subdit Perjanjian Kewilayahan, Direktorat Perjanjian Politik, Keamanan dan Kewilayahan, Kemlu. Lulus dari Fakultas Hukum Universitas Indonesia dengan program kekhususan Hukum Internasional pada tahun 2007 serta Master of Laws (Advanced) dari T. C. Beirne School of Law, the University of Queensland pada tahun 2012. Penulis memasuki Kementerian Luar Negeri pada tahun 2008 dan mengikuti Sekolah Dinas Luar Negeri (Sekdilu) Angkatan XXXIII.

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Frassminggi Kamasa Frassminggi Kamasa menyelesaikan S1 Studi Rusia di Universitas Indonesia, BSc Business Administration di University of the People dan S2 Hubungan Internasional di Victoria University of Wellington, New Zealand. Pernah mengikuti kursus Ekonomi-Politik Internasional di Yonsei University. Saat ini bertugas di Direktorat Eropa Timur dan Tengah, Direktorat Jenderal Amerika dan Eropa. Penulis memasuki Kementerian Luar Negeri pada tahun 2009 dan mengikuti Sekolah Dinas Luar Negeri (Sekdilu) Angkatan XXXIV.

Nenda Inasa Fadhilah, SH., LL.M Staf Fungsional Diplomat Sekretariat Direktorat Jenderal Hukum dan Perjanjian Internasional. Memiliki minat utama pada isu-isu Hukum Internasional Publik dan Hukum Investasi Internasional. Lulus dari Fakultas

Hukum

Universitas

Pelita

Harapan

dengan

program

kekhususan Hukum Internasional pada tahun 2009 serta Master of Laws (International Legal Studies) dari Georgetown University Law Center di Washington, DC pada tahun 2013. Penulis memasuki Kementerian Luar Negeri pada tahun 2010 dan mengikuti Sekolah Dinas Luar Negeri (Sekdilu) Angkatan XXXV.

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Jurnal Hukum dan Perjanjian Internasional

OPINIO JURIS

Jurnal Opinio Juris menerima tulisan dengan tema hukum internasional, perjanjian internasional, diplomasi, hubungan internasional, dan isu-isu dalam negeri yang memiliki dimensi hukum dan perjanjian internasional. Ketentuan Penulisan: 1. Panjang tulisan 10—20 halaman kertas A4 (termasuk abstraksi, isi, catatan kaki, dan daftar pustaka), format MS Word, spasi satu setengah, font Times New Roman ukuran 11. Untuk catatan kaki, spasi satu dan font Times New Roman ukuran 10; 2. Tulisan dapat dibuat dalam bahasa Indonesia atau bahasa Inggris; 3. Setiap naskah harus disertai abstraksi maksimal 1 halaman A4. Untuk tulisan dalam bahasa Indonesia, abstraksi dibuat dalam bahasa Inggris dan untuk tulisan dalam bahasa Inggris, abstraksi dibuat dalam bahasa Indonesia. Jumlah kata abstraksi sekitar 100 kata. 4. Rujukan dibuat dalam bentuk catatan kaki (footnote); 5. Tulisan harus asli dari penulis, belum pernah diterbitkan, dan tidak sedang dikirimkan ke penerbit lain; 6. Untuk setiap naskah yang masuk, redaksi berhak mengedit dengan tidak mengubah maksud dan isi tulisan; 7. Apabila diperlukan, redaksi akan memberikan masukan dan rekomendasi kepada penulis tentang tulisan yang dikirim; 8. Setiap naskah yang dikirim harus disertai daftar riwayat hidup singkat penulis (curriculum vitae) yang setidak-tidaknya terdiri dari pekerjaan, pendidikan, alamat, dan nomor telepon yang bisa dihubungi; 9. Setiap naskah yang disetujui untuk diterbitkan akan mendapatkan kompensasi finansial; 10. File naskah beserta kelengkapan lainnya dapat dikirim ke email Redaksi.

Sekretariat Direktorat Jenderal Hukum dan Perjanjian Interansional Kementerian Luar Negeri Jalan Taman Pejambon No. 6 Jakarta Pusat Telp: +62 21 3846633 Fax: +62 21 3858044 Email: [email protected] http://pustakahpi.kemlu.go.id/

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