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International Law

Reserve judgment: Arbitrating energy disputes in Africa

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As African states seek to use national laws to protect their natural resources and increase revenue from their development, Fieldfisher dispute resolution partner, Simon Sloane, considers the difficulties facing energy companies seeking to protect their investments while respecting the transformational needs of host states.

Africa’s capacity to benefit equitably from its own natural resources continues to be one of the main challenges facing many of its most energy-abundant jurisdictions.

While blaming this state of affairs on the old “resource curse” myth is simplistic and unhelpful, it remains the case that nations rich in resources tend to be poorer and less developed than those which are not, with many of the benefits of their exploitation going offshore.

Despite the clear moral case for African countries to profit more from their energy and mineral reserves, legally the picture is more complicated.

Much of the cost and risk of extracting these resources tends to be shouldered by foreign investors, who expect to be compensated for their outlays and assume that the terms on which they invested will be protected by local and international laws.

Consequently, any new domestic legislation guaranteeing host countries a “fair” share of the revenues from internationally funded projects is often treated as breaching protections given to foreign investors in bilateral investment treaties (BITs).

There have been numerous incidents of foreign companies successfully bringing arbitrations against African states that have tried to amend investment terms retrospectively, with investors relying on safeguards such as fair and equitable treatment (FET) and non-expropriation rights provided in BITs.

This has led to growing scepticism among African governments of (particularly first and second generation) BITs, as these treaties are often perceived as looking after the interests of foreign investors, to the detriment of states’ needs to transform their economies.

Affirmative action

A handful of African countries, including South Africa and Tanzania, have recently cancelled a number of their BITs – a situation that has created tension between the desire to preserve domestic assets for the national benefit and the need to attract foreign investment to fuel economic growth.

Domestic legislation designed to promote equitable ownership include South Africa’s black economic empowerment initiatives, which compel 26% of shares in mining assets to be distributed to disadvantaged local people.

In Tanzania, new laws including the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act, 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Act, give the government power to renegotiate contracts with investors on terms more favourable to the state.

Although international arbitration is generally a last resort for resources companies when disputes arise, lately there has been a noticeable increase in requests for arbitration in circumstances where African states have sought to implement alternative local laws.

BIT terms and Western-centric legal principles rarely align with traditional African customary laws and there is a growing unwillingness in many African states to accept foreign rulings over key national assets, which can make the enforcement of an international arbitration award against a state politically challenging.

Since relatively few African court decisions are published, it is hard to tell statistically where many countries are in terms of compliance with international arbitration awards, and how many are resisting enforcement.

There have been some very public rejections of international arbitrators’ decisions.

Zimbabwe, for example, has resisted recent efforts to enforce awards made against it in US courts.

Nigerian courts have also refused the local enforcement of a multi-billion dollar London Court of International Arbitration (LCIA)commercial arbitration award against a state-owned entity in favour of foreign investors, notwithstanding that the English courts have upheld the validity of the award (see P&ID Ltd v Federal State of Nigeria).

Yet even in cases where the authority of international arbitrators is accepted, the variety and nature of local laws can cause problems when it comes to implementing awards in African states.

Parallel proceedings

Growing distrust of the international arbitration system among African governments is a considerable problem for foreign investors, especially in the highly litigious energy sector, as there is currently no trusted alternative for resolving disputes.

Historically, arbitration has not been high on the agenda for most African states and relatively few African judges have significant experience of international arbitration.

Efforts are being made to redress this through legal education and there have been moves to establish regional arbitration centres throughout Africa that have the confidence of both states and investors, although these are yet to gain significant traction.

In the meantime, there continue to be serious problems in resolving energy project disputes caused by parallel proceedings, where one party will ignore an arbitration clause in a contract and ask for the matter to be addressed in a local court.

In these situations, partiesend up straddling one or more proceedings on the same issues, with different tribunals and courts regularly reaching different decisions and with the added hurdle of a party facing competing anti-suit or anti-arbitration injunctions.

Such circumstances are common where at least one partner is foreign and relies on an arbitration clause in a contract or its public international law rights under a BIT, while local parties are more naturally inclined to seek decisions from local judges.

Often, the impasse is caused by local judges who are suspicious of the international arbitration process and are not willing to abdicate their powers to a foreign tribunal .

Pre-empting problems

In many cases, the need for arbitration can be avoided by careful and far-sighted approaches to contract negotiation.

Simply including an arbitration clause in a contract will not automatically prevent the parties ending up in messy disputes being contested simultaneously in domestic and international courts.

Energy projects especially will usually involve a complicated series of contracts between international energy companies and one or more domestic counterparts, including government bodies, local investors and contractors.

If a domestic party decides to ignore an arbitration clause and asks a local court to intervene, the foreign party then has to choose whether to seek an injunction and refer the dispute to arbitration, or submit to the local court’s jurisdiction.

In these situations, the international partner is likely to have difficulty locally enforcing any award they obtain, if they proceed with the arbitration.

Alternatively, the international party can opt to engage in the local court process which can expose them to the vagaries of an unfamiliar legal system.

Where there is a suite of contracts containing different arbitration clauses, this leaves the parties open to arguments about which arbitration clause governs which dispute and the possibility of multiple proceedings.

Habitually, there is a lack of attention given by lawyers drafting contracts to what are sometimes mandatory laws to protect natural resources.

Rules obliging infrastructure developers to use local contractors on large projects are also frequently ignored.

This failure to respect local laws can lead to litigation in local courts, especially as communities become more empowered to challenge this practice, over issues which should have been addressed at the drafting stage.

While not wholly avoidable, the risk of becoming embroiled in paralysing disagreements can be minimised by careful drafting and fully thinking through how proceedings will work in particular African jurisdictions.

Intra-African arbitration centres

One of the solutions being implemented to improve the perception of international arbitration in African disputes is the establishment of local arbitration centres.

In 2016 alone, there were more than 70 international arbitration centres operating across Africa,, with varying degrees of credibility, and more have sprung up since.

The Cairo Regional Centre for International Commercial Arbitration, established in 1979, has been notably successful in attracting Arab and north-Saharan arbitrations.

In Nigeria, the Lagos Court of Arbitration is growing in stature, as are the Kigali International Arbitration Centre (KIAC) in Rwanda and the Ghana Arbitration Centre.

The Casablanca International Mediation and Arbitration Centre (CIMAC) in Morocco and the Mauritius International Arbitration Centre (MIAC), which was previously an offshoot of the LCIA, are also actively seeking to play active roles in resolving African disputes.

China’s approach to arbitrating in Africa is also worth paying attention to. The China-Africa Joint Arbitration Centre (CJAC) in Shanghai was specifically set up to deal with infrastructure project disputes, and China is now looking to set up centres with broader mandates in East and West Africa.

The goal of all of these African centres is to regionalise arbitration, so that cases involving precious national assets are dealt with in Africa by African lawyers and arbitrators, with the buy-in of African governments and international investors.

However, until local courts are equipped to play a supportive role in arbitration, it may be hard for these centres to command confidence, especially when there are so many centres competing to hear arbitrations.

Transparency within the local court system also needs to improve, as where there is little or no access to court judgments, the worst assumptions are going to prevail.

International investors need to feel they can trust the integrity of local courts before they can be comfortable with their handling of cases.

The Paris-headquartered International Court of Arbitration (ICA) is pushing to improve the transparency of enforcement, on the grounds that it is important for tribunals and courts to know what other courts are doing, and for the rest of the world to see that key treaties are not being overturned and set aside.

The Organization for the Harmonization of Business Law in Africa (OHADA) is similarly seeking to facilitate a pro-arbitration stance in West Africa.

It is worth noting that suggestions around using institutionally appointed arbitrators, who have the advantage of proven expertise in the area they are arbitrating on, have generally received a cool reception by courts, states and investors.

Stabilisation clauses

The use of stabilisation clauses in contracts as a means for foreign investors to mitigate or manage political risks associated with their project is coming under scrutiny in Africa.

The World Bank and other multi-lateral development organisations favour the deployment of clauses that allow an investor to sue a state if the terms on which they invested change, as a way of increasing investment in Africa and developing economies in general.

But it is becoming increasingly evident that such clauses bind African governments and prevent them from amending local labour and environmental laws or their fiscal regimes, even if such reforms are deemed necessary to transform their societies and enhance domestic economies.

Although many African countries recognise that including stabilisation clauses in a BIT is likely to lead to expensive disputes that state balance sheets can ill afford, the need to attract foreign investment means that most governments are still willing to take the risk.

This is an area that multi-lateral organisations need to review, as it is clear that the current situation does not adequately serve the transformational needs of many African states.

New model treaties

Simultaneously with the growth of local arbitration centres, a raft of regional investment and co-operation agreements have sprung up to foster intra-African state and private investment from home-grown and international sources.

The majority of these agreements contain carve-outs expressly to enable African states to address their transformational needs, including exemptions for disenfranchised communities and the need to protect natural resources, without the fear of incurring liability to foreign investors.

The African Continental Free Trade Agreement (AfCFTA), signed in Kigali in March 2018, is intended to provide a platform for intra-African investment between 27 African Union member states, both at state level and for private investors.

It is also hoped that the AfCFTA will go some way towards dealing with the perception that foreign investors have advantages over local partners under traditional BITs, and with some of the problems of enforcing courts’ decisions on disputes.

The New York Convention

One major benefit of international arbitration is the ease of enforcement in foreign jurisdictions which are signatories to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”).

In sub-Saharan Africa, a region which comprises 46 of Africa’s 54 countries, many but not all jurisdictions have ratified the New York Convention.

The challenge now will be to ensure that the convention is properly implemented and respected by all signatories.

African governments are also closely following developments in Europe around the Investment Court System as an alternative to international arbitration, for resolving investor disputes in EU member states.

Tackling corruption

Non-governmental organisation Transparency International singles out the global oil and gas industry as one of the business sectors at the greatest risk of corruption, with Africa being a particular hot spot.

While there has been ample evidence of corrupt practices in some jurisdictions, observers should be cautious generalising about Africa, as many African countries are highly ranked as places to do business cleanly and legally.

Corruption is one of the issues at the heart of many governments’ dissatisfaction with the international arbitration system, as it smacks of injustice that an investor may be involved in illegal activity, by coercion or by choice, yet still win significant arbitration awards.

There have been a few advances in BITs and model laws that indicate international law is starting to get to grips with the issue.

The Dutch Model BIT published earlier this year allows tribunals to take into account whether there has been corruption when making an award – a development that has been largely welcomed and is likely to be replicated in other BITs around the world.

The Nigeria-Morocco BIT (the Reciprocal Investment Promotion and Investment Agreement) signed in late 2016, which contains a comprehensive anti-corruption provision, is also seen as one of the most progressive new formats of BIT.

The future of African energy disputes

Anyone considering making investments in Africa needs to be aware that there are a number of regional treaties to be complied with in order to benefit from investment protections.

There continue to be unresolved questions around enforcement mechanisms and what protections are enforceable through arbitration, especially as countries pull out of BITs.

For users or would-be users of the arbitration system, there are some difficult choices to be made for those who find themselves in the midst of several parallel proceedings.

While disputants may be convinced that they are legally right that arbitration is the way to resolve an issue, parties need to be very certain that there is some kind of enforcement option available to justify the time and expense involved.

Otherwise, disputes can turn into difficult procedural battles between arbitrators and local court proceedings, leading to spiralling costs and project delays, ultimately forcing parties to abandon the case.

Simon Sloane is a dispute resolution partner at European law firm, Fieldfisher. He is a leading expert in international arbitration and ADR with over 25 years' experience of advising construction, energy and insurance clients. For more information on our international arbitration expertise, please visit the relevant pages of the Fieldfisher website. https://www.fieldfisher.com/

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International Law

Why states undermined their sovereignty by signing NPT?

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Nuclear weapons are known as brawny and cataclysmic weapons. The source of the energy of such weapons is fission and fusion of atoms. Such weapons release huge amount of radiation which can cause “radiation sickness”. Nuclear weapons were used once in a history in 1945. 80000 people were killed in Hiroshima and 70000 in Nagasaki. Due to the evidence of catastrophic impact, they have not been used in any war till today. The proliferation of nuclear weapons is a subject of concern in the international system. There are nine states which possess nuclear weapons: United States, United Kingdom, Russia, France and china. Proliferation is a spread of nuclear weapons both horizontally and vertically. In order to deal with the proliferation, NPT was introduced and still working globally.

NPT:

NPT is known as “treaty on the non-proliferation of nuclear weapons”. It thwarts the states from acquiring nuclear weapons’ technology or developing fissile material for nuclear weapons. The NPT is a multilateral treaty which was opened for signature on July 1st 1968 and entered into effect on March 5th 1970. Its signatory parties are 186 which joined it either by ratification or accession. Russia, UK and US are its depositaries. According to this treaty the states which have manufactured nuclear explosives prior to January 1st 1967 are legal nuclear states which include US, UK, Russia, France and china also known as de-jure states whereas Pakistan, India, North Korea and Israel are de-facto nuclear states. There three main pillar of NPT:

  • “Prevention of spread of nuclear weapons and nuclear technology.
  • Promotion of co-operation in peaceful uses of nuclear energy.
  • Achievement of nuclear as well as general and complete disarmament under strict and effective international control”.

Since the formation of these contraptions, a lot of gloomy predictions were made like in 21st century 20 states would acquire nuclear weapons but only nine states have been observed as nuclear weapon states till today. However, 65 years ago almost 39 states were engaged in nuclear program but sooner or later they gave up their ambition. From the second half of the 1980, the states which were indulge in the nuclear activities were relatively low. This is because of the 186states have signed NPT as a non-nuclear weapon state and condemned proliferation. The question arises here is what motivate states to not acquire nuclear weapons. There are many theories from the past decade to answer this question are grouped into four overarching groups:

  • Capability
  • Security
  • International norms and perception
  • Domestic political context

These are elaborated below:

The capability of any state regarding formation of nuclear weapons comprises on:

  • Technological capability
  • Economic capability

Development of nuclear weapon is not facile. Production of facile material is the most challenging and expensive, scientifically and technologically both. The transformation of that material into a deliveryweapon and development of the delivery system require technological and financial capabilities and which has become an effective obstacle for the less developed countries. As those countries don’t have advanced scientific and technological infrastructure and are not financially strong to afford the investment needed to start its own nuclear program. So, capabilities became a stumbling block for less developed states due to which they sign NPT as a non-nuclear state. But this is not only the decisive factor in taking decision whether to forgo nuclear weapons or not. Political willingness also play a crucial role in it because it devote a considerable share of states’ resources to military sector or public sector e.g. Pakistan and north Korea are poor states with less capabilities but they have developed nuclear weapons. So, it also depends upon the psychology of the leaders too. This point is concluded by saying:

“More highly developed countries proliferate more readily, less highly developed counters do so less readily”.

Security is the dominant theory to explain both questions: why states go nuclear and why not? Security is very appealing factor for the states to acquire nuclear weapons but acquiring nuclear weapons is not always the best way to ensure security. As this world is anarchic and states are rational unitary actor, so for the security, states go for self-help. But sometimes, acquiring nuclear weapons poses a greater threat than to forgo them because it may cause more distrust and tension among the adversaries. Due to the distrust one state may attempt pre-emptive strikewhich can cause nuclear war and end of the both states. So, to avoid this situation, state opted to go non-nuclear because in this condition it has not that’s much adversaries and can focuses on the other public sectors. According to the “prudential realism: “nations under certaincircumstances mayprudently forgo military capabilities that is threatening because states and security-conscious entities”. States which are involve in low intensity conflict would likely to go non-nuclear by signing NPT. Alliances also play an important role in security according to neo-liberalism. States are likely to go in alliance with any nuclear state in order to avoid the risk, cost and difficulties of nuclear weapon programs e.g. NATO countries are in alliance with US. But that nuclear state must give a guarantee of “positive and negative assurance security” so those states chose to sign NPT as a non-nuclear states.

International norms and perceptions also assist states in deciding whether to sign NPT as a non-nuclear weapon state or not. The norms of international system highly influence the perceptions of the states especially norms in the international treaties like NPT. States have a lust of prestige and status in international system. On the basis of non-proliferation norms, states perceive that their status and prestige would be increased by forgoing nuclear weapons. According to Jacques Hymans: “ most states think of themselves as, and want to be seen as , good international citizens and good international citizens don’t build nuclear arsenals”. Due to this reason, majority of thestates don’t acquire nuclear weapons. Constructivism is the basis of international norms and perceptions which have made normative situation for the states in general. NPT have changed the normative environment and situation got changed due to which many states forgo nuclear weapons. Cost-benefit analysis got changed by the non-proliferation norms. It has made nuclear weapon program technically, financially and politically expensive. It has also change the assumption of appropriate state behavior. So to maintain the good self-image in international system states have signed NPT as a non-nuclear weapon states.

The factors of domestic political context have many dimensions. In this cluster, types of governmental systemplay a crucial role for the states to sign NPT as a non-nuclear states. According to some researchers, democracies are less likely to engage in conflicts than autocracies. Democracies obey international laws at greater level to become a good citizen of internal system due to which the chances of democracies to become nuclear states are less. From the lens of political-ideology if a system aims for the economic growth that it would not go for nuclear weapons. According to Solingen “the nuclear programs are less likely to emerge in countries where the political culture is in general sympathetic to economic openness, trade liberalization, foreign investments, and international economic integration” e.g. Saudi Arabia. Psychology of domestic actor also play a crucial role in influencing the decision regarding nuclear weapons and societal groups too. In short, it depends upon the national political circumstances and dynamics that effect the decision of perusing or forgoing nuclear weapons.

Conclusion:

Nuclear free zone or weapons of mass destruction free zone is a great disincentive for the states if combined with the credible pledges by the US and other nuclear states to provide positive and negative assurance security to the non-nuclear weapon states. Like in Middle East only Israel has acquired nuclear weapons which can be equalized by the security given by US or other nuclear state in order to make Middle East nuclear-free zone. As NPT is known as bargaining treaty which offer economic incentives to the states and compel other states to sign NPT. All the above factors showed the reasons of the will of states but some states sign NPTbecause of the fear of the sanction because none of the state survive if it becomes isolated from the whole world e.g. economic sanctions upon Iran. Many under developed countries are unable to resist the pressure of the developed stays and for their survival, they need their support. So, in return, they obey the orders of developed states and don’t go for nuclear weapons. Ukraine, Kazakhstan and Belarus dismantle their nuclear arsenals because of the incentive of the positive assured security. Whereas, the nuclear programs of Brazil and Argentina were dissuaded by the regional security arrangement. South Africa gave its nuclear weapons for the sake of its development. Under developed countries focus on the development of health, education sectors etc. due to which they dismantle their nuclear weapons and got economic assistance. In a nutshell, NPT played a crucial role in resisting nuclear proliferation but at the same time it is monopolizing the power of nuclear states.

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International Law

Why Did States Sign NPT Treaty As Non-Nuclear Weapon States

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Following the inception of the “Treaty on the non-proliferation of nuclear weapons NPT” in 1967, about 186 states signed NPT as non-nuclear weapon states (NNWS) which are obliged to refrain from acquiring or manufacturing nuclear weapons nor these states are allowed to seek or receive assistance from nuclear weapon states in this regard, and have to comply with the prerequisites defined by IAEA. The reasons due to which these states decided to give up their sovereign right of acquiring nuclear weapons (despite the fact that some of these states are actually capable to develop nuclear weapons) are driven by motivations that vary according to the states’ regional and domestic security dynamics, combined with the international normative values. Hence, in order to identify and understand the relevant reasons, case studies and an analysis have been presented.

CASE STUDIES

UKRAINE: After exploring the official statements related to the nuclear policy, issued by Ukraine’s Ministry of Foreign Affairs (MFA), following reasons were observed due to which Ukraine signed NPT: international pressure, technical incapability, unstable economic affairs, incentive given by NPT in terms of civil nuclear technology (membership of MCTR “Missile Technology Control Regime” saved the space industry of Ukraine), pursuit for the stability of the newly established state in the region etc. At first, Ukraine tried to hold the rights over a nuclear arsenal (that it inherited after the disintegration of USSR). However, it seemed unable to handle international pressure. Moreover, MFA of Ukraine acknoweldged that Ukrain didn’t want to offend the IAEA prerequisites as doing so would result in unstable economic relations with other states, especially Russia; the halted supply of nuclear fuel from Russia would cause the Ukranian nuclear power plants to shut down which might have result in energy crisis.

EGYPT:Previously interested in the procurement of nuclear weapons (due to perceived threat from “nuclear activity of Israel”), Egypt signed NPT in 1981 as it perceived (constructivism) that the benefits of signing NPT were impeccable in terms of diplomatic ties with US and aid of approximately two billion dollars provided by US every year. Moreover, Egypt had the chance to be “good international citizen” as per the international norms and to criticize the Israel’s ambigous nuclear aims.

BRAZIL AND ARGENTINA: Brazil and Argentina faced security dilemma due to the “long-standing rivalry” between them. Later on, due to the adoption of the “democratic regimes”, their rivalry was mitigated. Later on, Argentina and Brazil states became party to the NPT as NNWS in the years 1995 and 1998 respectively. Hence, the security dilemma was over and these states, being democratic states and as per the international normative values, had no reason to stay out of NPT. So the “low security threat” is the main reason due to which these states signed NPT as NNWS.

SOUTH KOREA:Despite having the advanced nuclear reactors manufacturing industry, South Korea chose to sign NPT as NNWS, partly because of its capitalist approach and international norms, and partly because of nuclear umbrella sought by South Korea from USA (though the influence of extended nuclear deterrence remains debatable between scholars).Moreover,according to some scholars, a few states are able to develop and manufacture the final product (nuclear weapons) but have not done it yet, either due to diplomatic reasons or simply because they do not have the reason to rush towards the development of nuclear weapons as they can manufacture nukes any time by withdrawing from NPT in case they perceived potential threat. However, the personal opinion is that it is highly unlikely of South Korea to withdraw from NPT.

JAPAN:Japan signed NPT as NNWS due to the international condemnation it faced which resulted from its aggressive historical background, and due to article 9 (renounced its right to keep armed forces except for defensive purposes) in its constitution. Moreover, like South Korea it has nuclear umbrella from US. However, scholars debate over the future of Japan (Whether it would remain non-nuclear state or not).

ANALYSIS

Although, multiple scholars gave multiple sets of “proliferation motives” yet an attempt has been made in this article to identify the most relevant motives and reasons due to which states signed NPT as NNWS, after studying the cases of the few states ( elaborated above).

First of all, The expense of the enrichment of fissile material (uranium or plutonium) and the development of stable nuclear arsenals, could be a disincentive for developing states to procure nuclear weapons. Therefore, such states might have signed NPT in order to be benefited by prohibitive international laws (for the use of force) in terms of security.

Second reason is theRegional Security Dynamics; whether a state is facing security dilemma with its adversary or not. If a state is not facing any security dilemma then there is no reason for the state to stay out of NPT. Otherwise, procurement of nuclear weapons would pose potential threat to the security of the state as compared to the disarmament. The initiative for the development of nuclear weapons taken by a state would insecure its adversary and may lead to arms race in the region that would ultimately, contribute to the instability of that region. Another reason could be drived from the perceived “Nuclear Umbrella”; state such as South Korea and Japan may not develop nuclear weapons as in case of conflict, they would seek help, in the form of the deployment of nuclear weapons, from the USA; a phenomeon known as extended deterrence.

Thirdly, International Normative values based contructivism could also be considered a reason due to which states signed NPT as NNWS. The term nuclear taboo became the part of the scholarly text which emphasized the constructivist perception that the making and the use of nuclear weapons is immoral and the (perceived) legitimate initiatives related to he non-proliferation and disarmament would increase their prestige (which might also be beneficial for inter-state relations of a state with others and for the trade). This norm has been institutionalized in Non-proliferation Treaty. In other words, “states prefer to be good international citizens; the ones which do not develop nuclear weapons” (Jacques Hymans). Hence, the states overwhelmed (international pressure) by the international norms signed NPT as non-nuclear weapon states. Many states (which possessed the capability of developing nuclear weapons) started nuclear programs before NPT entered into force. Later on, these states terminated their nuclear programs and signed NPT due to the altered norms of cost and benefit analysis; favorable trade agreements and the changed definition of appropriate state behavior. Another factor that contributes to this topic is the history of the states (e.g Japan’ case).

Fourthly,the behavior of the states influenced by intra-state political and economic affairs could also be a reason; political structure and type of government along with the state’s priorities (military security prioritized over economic security and vice versa). Democratic states tend to be the protagonist of NPT and prefer to obey the international laws (However, this opinion remains debatable). Moreover, the “willingness” of the state leaders to prefer the economic growth (through international trade and cooperation; a liberal perspective) could also be a “non-proliferation motive”, since doing otherwise (prefering to develop nuclear weapons) would result in economic sanctions and disintergration.

Fifth reason is the most common and widely understood reason that is the incentive (bargain) offered by NPT to the non-nuclear weapons states; the providence of civil nuclear technology for the peaceful purposes (e.g generating electricity or for medical purposes etc.).

Other reasons have also been assumed after observing the state of world affairs, for example: the monopoly of P5, that is, not to let other states acquire nuclear weapons could also be the reason; the small weak states or the states that are newly established may have signed NPT after being pressurized by these countries on political and economical level. Moreover,some states might have signed NPT to simply support the cause of this treaty. For example, New Zealand signed NPT because it is a great protagonist of the non-proliferation and disarmament cause. In addition to that, these states, at the time of signing the treaty, expected P5 to disarm as per the treaty’s articles. The matter that the P5 haven’t done it yet, has been raised at NPT meetings many times, by NNWS.

CONCLUSION

Since there are 186 states party to the NPT as Non-Nuclear Weapon States (NNWS), the reasons for them signing as NNWS are numerous. However these reasons could be narrowed down to the few major reasons; security dynamics of the regions where these states are situated, their intra-state matters, the prevailing norms in the international system, cost and beneft analysis over the incentives offered by NPT etc. However, the effect of NPT is uncertain since the states that have signed NPT do not have immediate security threats. In case, they face threats from adversary, the decisive role of NPT over such potential security issues remains debatable.

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International Law

How nations states are limited

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After the World War II, the establishment of the United Nations and the beginning of cooperation between the states was considered by many governments as a positive step. It was a useful step for all governments to start cooperating with European states that had been at war with each other for many years and failed in European history, and for other states to join this process and maintain positive political and diplomatic relations. However, after the recent two world wars, the desire of states to sit at the table of peace has made them forget something. These were the influences of the global government (UN) that would affect the sovereignty of states. Therefore, as liberal relations and the process of globalization develop in international relations, nation-states have begun to move away from the status of individual states to the management of global power. Today, global governance has become a reality. When national states decide on an act in international politics, they are forced to act and implement acts not only in the national interests of the state, but also in the opinion of international organizations. Today, it is not as easy as in the past to seriously change the geopolitical situation and violate international law without the opinion of international political organizations. Because today in the system of international relations there is a control and power through global governance, which will influence the sovereign decisions of states. Therefore, today I will share my views on how global governance, which is a reality today, has brought nation-states closer to decline.

Part 1

Although the emergence and functioning of international organizations dates back to the 19th century, the formation of global governance is largely thought of as the history of the United Nations and some of the political organizations that have emerged since then. As I said, the emergence of global governance is associated with the end of World War II in 1945 and the establishment of the United Nations. As we know, after the Second World War, the world began to move on different realities. With the establishment of the United Nations, a mechanism of global governance has already begun to emerge. However, due to the geopolitical consequences of World War II and the transfer of Eastern Europe to the USSR, global governance through the UN could not cover the whole world, but simply led to the emergence of international organizations with its roots and the division of the world into two poles. As we know, the signing of the North Atlantic Pact in 1949, the emergence of NATO and the formation of the Western bloc, and later the signing of the Warsaw Pact and the establishment of the Eastern bloc in the same year divided the world into two poles. On the one hand, there was the capitalist West in global governance. On the other hand, there was the communist-ruled USSR. This continued until the 1990s.

Then, in 1991, with the collapse of the USSR and the end of the Cold War, global governance began to take over the world and the world came to global power, and liberal relations began to take over the world. Even Fukuyama, when he said the end of history, in fact meant that global governance would cover the world and that the world’s states would operate in the process of globalization based on a liberal tradition. All of this was a small history of how global governance came into being and when it covered the whole world. After the end of the Cold War in 1991, the Eastern European states that had already seceded from the USSR began to integrate into the West. In short, they have joined global governance. Later, some countries in the region, such as Azerbaijan, Georgia, and Ukraine, which gained independence from the USSR, entered the global system of governance, maintaining ties with the West. However, states such as Russia and Iran, in order to further protect their sovereignty, did not allow the influence of this administration to influence them and began to sever ties with the West over time.

However, the process of globalization did not move much with its positive aspects. Not only did global governance influence the decisions of states to control them, but it also had to create hierarchical control over them by creating global hegemony. The ideal option for this was the hegemonic equator. In this hegemonic equator, states are legally and formally equal, but over time they have become economically, politically and militarily unequal. Thus, after a while, this unequal situation began to form a hierarchy of power between states. States with weaker economic resources and militaries are already under constant pressure from powerful states and under the influence of powerful states.

For example, we can see an example of this in our country today. We are all equal in the South Caucasus region. Although Georgia, Iran, Russia and Azerbaijan are formally equal, there is a hierarchy in terms of global hegemony. For example, Russia comes first in this hierarchy. Because Russia is much luckier than others in military, economic and geopolitical terms. The second is Iran. Because the possibility of Iran becoming a nuclear weapon results in its military superiority over other countries in the region. The third is Azerbaijan. Because Azerbaijan’s oil economy, such as oil and gas, makes it more economically viable and stronger than Armenia. Therefore, such differences created by global governance and the limits imposed on sovereign decisions by states have formed a critique of globalization over time, leading to criticism and debate by various academics. This criticism has long focused on the question of whether globalization can lead to the decline of nation-states.

Part 2

As we know, the long-term impact of the globalization process on states has led to serious criticism about whether globalization has transformed states. While some academics believe that global governance destroys and degrades nation-states, others argue that globalization serves the national interests of nations.

The first critical approach is that the process of globalization is very powerful in a globalized world. In this case, we have already moved to a system of non-sovereign states. Today, states are no longer able to make independent political decisions in the long run for their national interests and to act accordingly. This process also weakens the power of states in the world and in international relations, and transnational companies gain a dominant position.

However, in the second critical approach, academics think differently and contradict the first criticism. Academics believe that although globalization affects the independent acts of states, the superpowers of their regions are still the most important entities in global politics. Because both international organizations and economic transnational organizations, which are the concepts of the globalization process, were created by these countries themselves. Therefore, globalization does not harm these countries, but serves their national interests. They can violate international law and the rules of global governance at any time, and even the geopolitical situation can change despite global governance. (For example, the US invasion of Iraq, Russia’s imperialist act against Georgia and Ukraine)

In addition, there is a third and final critical approach, which is the approach of global governance to other forms of power, interests, goals and acts of states. As globalization is now considered a world reality, states are forced to choose between two options. Either Iran, like North Korea, will remain closed and protect its national sovereignty outside of global governance, or, like other countries in the world, will join the process of globalization and cooperate with each other. Since there is an economic reality created by global governance in the world, global governance can keep states under its influence by changing the interests, goals and acts of states.

However, the decline of the state today is not only due to the process of globalization and global governance. In addition, there are institutions such as the global economy, business, large companies, non-governmental organizations and international organizations, which pose a serious threat to the sovereignty of states. Today we live in a world of more international, economic companies and organizations than national states. 49% of these companies and organizations belong to the states and 51% to the international economy. The economic power of some of these companies (Exxon Mobil, General Motors) is already greater than in many Eastern European and African countries. From this we can conclude that the second concept that leads to the decline of nation-states, along with international organizations, is the international economic companies.

Conclusion

As a result, I can say that today the globalized world and international organizations have become a system that borders states and limits their national decisions. If in the 20th century it was so easy to make a decision to start a world war, to use any type of weapon, it has become almost impossible to do so in a globalized world. But in addition, globalization and international organizations can sometimes help strengthen states. For example, today, because states play an important role in international organizations, decisions made through international organizations

sometimes depend on states. For example, the UN Security Council, the Consulate General of the European Union, is a process that depends on states in the decision-making process. The decisions of the member states are considered very serious and decisive in the decision-making process. In this case, too, we can see that international organizations do not act as a tool for the decline of nation-states, but as a concept that strengthens them. Therefore, I do not think it is right to assess globalization today as a system that leads to the decline of nation-states.

Reference

  • Andrew Heywood. (2013, fourth edition). Politics s.18
  • Robert Jackson & Georg Sorensen: Introduction to İR, s. 4
  • Mazarr, M. (1999). Global trends 2005: An owner’s manual for the next decade. New York: St. Martin’s Press.
  • Zygmunt BAUMAN, Küreselleşme-Toplumsal Sonuçları, Çev: Abdullah Yılmaz, Arıntı Yayınları, İstanbul, 2010, s.83

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