Victor V. Ramraj

ESADE Barcelona

8 February 2013

Private Power Resurgent?Privatization, State Capitalism, and the Future of Modern Constitutionalism

backgroundmapping constitutionalism: states, companies, and regulators in a post-national world

assuming… o the orthodox’ liberal constitutional goal

of limiting state powero the transformation of private powero the growth of global regulation

… how do we make sense of state constitutionalism?

this lectureo what are the implications of the

resurgence of transnational private power for domestic constitutionalism?

background mapping constitutionalism:states, companies, and regulators in a post-national world

assumptions of constitutionalism:o the subordination of private power to

public powero the hierarchical and vertical orientation

of constitutional lawo the nexus between constitutional law

and territory

background mapping constitutionalism:states, companies, and regulators in a post-national world

claim: constitutionalism needs to…o acknowledge the blurring line between

public and private powero rethink ‘state action’ doctrine and

apply constitutional norms to private actors

o loosen the link between constitutional jurisdiction and territory

book outlineo history of company, constitution (2, 3)o private power resurgent? (4)o global regulation (5)o rethinking constitutionalism (6, 7)

aim of this talk implications of private/hybrid power for modern constitutionalism

private power resurgent?

o the rise of multinational enterpriseso the emergence of state capitalism o private dispute resolution

these developments (together with the steady growth of transnational regulation) pose a serious challenge for any theory of modern constitutionalism that considers as its main goal the limitation of state power

the modern multinational enterprise

1990 onwards is characterized by ‘the adoption of truly global production chains by MNEs and their associates, a marked shift from raw materials and manufacturing toward services based FDI...’

— Muchlinski, Multinational Enterprises and the Law

the return of state capitalism

‘State companies make up 80% of the value of the stockmarket in China...’

— The Economist, 21 January 2012

59 of the 61 Chinese companies in the Fortune 500 were SOEs

— Phillip C.C. Huang (2012)

sovereign wealth funds: by 2013, projected to have $5-10 trillion in assets under management, against 3.9 trillion in 2008

— Ramamurti (2011)

the return of state capitalismChinese National Overseas Oil Company, 2012

o ‘State-owned companies from China, the world’s second-largest economy, have been increasingly active in global mergers and acquisitions.… They are also becoming strategic about how to avoid political opposition and structure deals in such a way that they are more likely to be approved.’

— ‘Cnooc heeds lessons of failed Unocal bid’ (Financial Times, July 2012)

privatization of dispute resolution

‘resolution of disputes [in the UK] mainly involving international parties rose by 59% to 5,297 in 2009 from 3,339 disputes in 2007’ (TheCityUK report, 2010)major arbitration venues in Paris, London,

New York, Geneva, Dubai, Singapore, Hong Kong

dispute resolution for infrastructure mega-projects

investor-state arbitration

rethinking constitutionalism challenges

many states are increasing unable to regulate MNCs

blurring of the lines between public and private, company and state

state law/institutions are increasingly marginalized in resolving commercial disputes, developing legal norms

rethinking constitutionalism state and non-state actors

states as o regulators of public powero wielders of private power (SOEs)

non-state bodies as:o wielders of private power (e.g., MNEs)o regulators of public power

rethinking constitutionalism a modest proposal

constitutionalism needs to…

o acknowledge the blurring line between public and private power

o rethink ‘state action’ doctrine and apply constitutional norms to private actors

o loosen the link between constitutional jurisdiction and territory