How To Contain Global Companies - conversation with Fleur Johns

I had a conversation not long ago with Professor Adam Winkler whose book, “We the Corporation” tells the story of how corporations became innovators in American constitutional law winning their individual rights. Globalization was one of the major driving forces of the world’s political economy in the past half century. You once wrote about the “invisibility” of transnational corporation in the eyes of international law. Does it mean that they have not been able to shape international law?

Not at all. Corporations have been very significant in shaping and informing international law. What I was getting at in the article to which you refer (written and published while I was an undergraduate student, so not my strongest work!) is that international law has had difficulty “seeing” or addressing corporate conduct and influence directly. More recently, I’ve suggested that international law has tended to know corporations in three main (oblique) ways: as quasi-citizens or analogues to individuals (whereby they have been assimilated to, and drawn under the protection and oversight of, the nation state); as para-statal entities (whereby they have re-routed, assumed and absorbed state power and resources, through contracting out especially); and as comparators and benchmarks for the work and management of international organizations (whereby corporate conduct has been cast as the measure of “innovation” or “agility” to which IOs should aspire).  In all these three ways – and thanks to, not in spite of, their occupation of offstage space among international legal subjects –  corporations have been major repositories of legal and de facto authority on the global plane.

In what areas of international law were they able to gain internationally recognized rights vis-à-vis states? What are the impacts of global corporations on international law? Would you consider them “innovators” of international law?

Let me try to answer your three questions together, acknowledging that each would require far more space than we have to answer fulsomely. Corporations have gained a wide range of rights vis-à-vis states.

They possess consequential treaty and contract rights across many areas of law.

Consider the right to “enter into contracts with princes and rulers...in order to build fortifications and strongholds” granted to the Dutch East India Company (or the VOC) by the Netherlands in 1602. And recall the rights guaranteed to corporations by many bilateral investment treaties today, including the right launch arbitral proceedings against states to try to recover lost assets and profits when states make policy decisions adverse to corporate interests.

Just as significant, however, are a litany of informal rights that corporations enjoy vis-à-vis states: rights to counsel, standardize, model and shape “best practice”. Corporate representatives serve on technical committees charged with developing standards within the International Organization for Standardization (ISO). They model and evaluate the feasibility, and environmental and social impacts, of major state-funded infrastructure projects. They consult with governments on the drafting and negotiation of trade agreements: playing a prominent role in the crafting of the Trans-Pacific Partnership and its successors, for instance. They are continually in states’ ears, so to speak, in international legal affairs. And this is due, in part, to corporations having laid claim to the space of “innovation”.

Corporations have been, undoubtedly, sites of innovation within the international legal order.

But above all, corporations have promulgated the idea that innovation is the primary and natural preserve of the private sector. The prevalence of this contentious idea may be among corporations’ most impactful “innovations”.

Beside the recent emphasis of corporate rights, is there another side of the coin? What are the harmful impacts of the global operation of corporate entities? Where are the lacuna in the current international law?

Let me focus on the second of your questions. Corporate entities have harmful impacts globally because they are fundamentally oriented towards profit and yielding value for shareholders. When they get involved in matters, or take responsibility for things, on the global plane for which a profit-making imperative is ill-suited or inadequate, then harmful impacts frequently ensue.

This does not mean that corporations are always malevolent forces in international law.

It means, rather, that they have outrun the purposes for which they are well-designed and crowded out other modes of social and economic organization and aggregation in the process. As I will explain in response to question 5 below, however, addressing this is not a matter of filling a lacuna in current international law.

What are the new international legal and/or constitutional challenges that the rise of large tech companies are posing with the emergence of digital technologies?

The challenges to which the increasing digitization of international legal order give rise are many. Much of my work over the past few years has been concerned with trying to identify and analyze some of these – work that is ongoing. One example of a challenge with which we are only just beginning to come to grips is associated with the changes in representation that digital technology is effecting on the global plane. Digitization means that people, places and things are being assembled and imagined differently to how we have been accustomed to thinking of and governing them over the past few centuries. Territory is being datafied: rendered into digital maps and divided up and contested through recourse to boundaries both virtual and material. Governments and international organizations are rendering their constituents in digital formats for purposes of trying to understand where and who they are and what they need: by analysing mobile phone data and satellite image data, for instance, for official statistics, disaster relief, intelligence-gathering, welfare delivery, pandemic response, and much more.

Let me explain the significance of these changes by reference to a crude analogy. Imagine that the existing infrastructure for organizing and meting out authority and resources globally is like an urban sewerage system. Pipes run between different locations in ways that one can map. These are operated under regimes of public and private law that, again, one can map. Growing recourse to digital technology is replacing and re-routing the pipes and changing the terms and conditions under which they are laid and used, and most of these don’t feature on any publicly available map. When an international organization directs its aid programming by reference, in part, to analysis of social media, it is using a different pipe, laid along a different route, to that which conventional statistical analysis, reporting and governance practice have employed. Digitization is also transforming how we understand the entities and elements making up the system. Instead of a physical building, a parcel of land or a local government jurisdiction being the focus for engineering inflows and outflows, a digital “object” may be the focus of analysis and service-delivery: an “object” identified through satellite image analysis or another mode of digital data aggregation and analysis, for example.

Just as the development and spread of statistics throughout the 18th and 19th centuries changed the way that governance was approached and critiqued on the national and international planes,

digital technology is wreaking transformation of comparable magnitude.

Because this transformation is underway all around us, it is still hard to get a handle on, although useful mappings are burgeoning. Also, because not all is new, much can be learned from the past. The corporation has long been cast as a proxy-person within international legal order. That proxy status has enabled the accumulation of significant power and resources in corporate hands – power and resources distributed unevenly according to corporate standards of law and accounting. Now we are seeing the rise of new, digital proxies at every turn. Once again, these may be vehicles for the uneven distribution of power and resources globally, although not necessarily along existing lines.

What reform steps in international law would you consider useful to regulate the rising influence of corporate actors?

For a start, I think it is essential to recognize how extensively corporate activity is and has been regulated on the global plane. Corporate actors have not accumulated and wielded power – to the extent that they have – in defiance of international law or in its absence. They have done so through the deft navigation and wielding of international legal rights and norms and by aligning and embedding their interests with and within states and international organizations.

To the extent that this existing regulatory infrastructure has enabled harmful conduct and decision-making (harmful, that is, to humans and the planet), we need to think about fundamentally re-ordering it,

not just adding to it at the edges or filling in gaps. With respect to corporations behind the world’s most dominant digital platforms, there are innumerable points of entry for this at the national and international levels: from employment and intellectual property regulation to tax policy and accounting standards, from investment protection agreements to manufacturing and procurement protocols, and so on.