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Lillich Source: The American Journal of International Law, Vol. 69, No. 2 (Apr., 1975), pp. 399-365 Published by: American Society of International Law Stable URL: http://www.jstor.org/stable/2200272 Accessed: 21-01-2016 15:39 UTC Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www. jstor.org/page/ info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support @jstor.org. http://www.jstor.org This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions THE DIPLOMATIC PROTECTION OF NATIONALS ABROAD: AN ELEMENTARY PRINCIPLE OF INTERNATIONAL LAw UnpEerR ATTACK That the traditional international law governing the Responsibility of States for Injuries to Aliens has been under attack for several decades should come as no surprise to readers of this Journal. What is perhaps less familiar is the fact that this attack on the substantive norms of one of the most important areas of international law has been followed in recent years by a similar, albeit more limited, attack on its procedural counterpart, the diplomatic protection of nationals abroad.2, While the doctrine of diplomatic protection admittedly has its imperfections, weak- ening or abolishing it under present conditions would effectively undercut the substantive norms developed by state practice over the past 150 years,° for, as Mr. Justice Holmes once remarked, “legal obligations that exist but cannot be enforced are ghosts that are seen in the law but are elusive to the grasp.” Hence, pending the establishment of international machinery guaranteeing third-party determination of disputes between alien claim- ants and states, it is in the interest of all international lawyers not only to support the doctrine, but to oppose vigorously any effort to cripple or destroy it.® 1 See Guha Roy, Is the Law of Responsibility of States for Injuries to Aliens a Part of Universal International Law?, 55 AJIL 863 (1961). See also R. ANAND, NEw STATES AND INTERNATIONAL Law 39-43 (1972); Castafieda, The Underdeveloped Na- tions and the Development of International Law, 15 Int’, Orc. 38, 39 (1961); F. OxoyE, INTERNATIONAL LAW AND THE NEw AFRICAN SraTEs 178-84 (1972); and S. SinnA, NEw NATIONS AND THE Law or Nations ch. VI (1967). Cf. Falk, The New States and International Legal Order, 118 RecuEu. pEs Cours (Hague Academy of International Law) 1, 94-96 (1966-II). For a convincing reply to these writers, see Jessup, Non-Universal International Law, 12 Coium. J. Transnat’i L. 415 (1973). 2A preliminary survey of these attacks will be found in Lillich, The Valuation of Nationalized Property in International Law: Toward a Consensus or More “Rich Chaos”?, in 3 THE VALUATION OF NATIONALIZED PROPERTY IN INTERNATIONAL Law, to be published by the University Press of Virginia during 1975. 3 State practice in this area of international law is so extensive that the League of Nations found the subject “ripe” for codification nearly 50 years ago. For various attempts at codification, see Lillich, Toward the Formulation of an Acceptable Body of Law Concerning State Responsibility, 16 Syracuse L. Rev. 721, 724-31 (1965). See generally Baxter, Reflections on Codification in Light of the International Law of State Responsibility for Injuries to Aliens, 16 id. 745 (1965). 4 The Western Maid, 257 U.S. 419, 433 (1922). 5 Weakening or abolishing the right of diplomatic protection, Freeman observed when opposing an earlier attempt along the lines of recent ones, in effect frees “an inter- ested state from restraints imposed by international law upon conduct which would otherwise produce a pecuniary liability to its sister nations. The far-reaching im- plications of this doctrine are so sinister and so deplorable that it should be resisted by the profession with every means at its command.” Freeman, Recent Aspects of the Calvo Doctrine and the Challenge to International Law, 40 AJIL 121, 125 (1946). 309 This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 360 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 69 Despite unsuccessful attempts over the past century, especially by the Latin American states, to restrict diplomatic protection,® the Permanent Court of International Justice in the Mavrommatis Palestine Concessions case described the doctrine as “an elementary principle of international law,’ 7 a view which has been reaffirmed repeatedly by the International Court of Justice,’ most recently in the Barcelona Traction case.® Attempts during the past decade to water down the substantive norms of UN Gen- eral Assembly Resolution 1803(XVII) on Permanent Sovereignty Over - Natural Resources,?° however, also purport to dilute the doctrine of diplo- matic protection, at least insofar as claims based upon “wealth depriva- tion” + are concerned. Heretofore unnoticed, these attempts deserve exami- nation and refutation, especially Resolution 88( XII) adopted by the Trade and Development Board of UNCTAD on October 19, 1972,1? Resolution 3171(XXVIII) adopted by the UN General Assembly on December 17, 1973,2 and the Charter of Economic Rights and Duties of States adopted by the UN General Assembly on December 12, 1974.14 6 See generally A. FREEMAN, THE INTERNATIONAL RESPONSIBILITY OF STATES FOR DENIAL OF JusTIcE ch. XVI (1938). Such attempts occur regularly every generation. See, e.g., the replies of Hershey, The Calvo and Drago Doctrines, 1 AJIL 26 (1907), and Brown, The “Cardenas Doctrine,” 34 id. 300 (1940). See text at and accompany- ing note 19 infra. 7 Case of the Mavrommatis Palestine Concessions, [1924] PCIJ, ser. A. No. 2, at 12: It is an elementary principle of international law that a state is entitled to ae tect its subjects, when injured by acts contrary to international law committe another state, from whom they have been unable to obtain satisfaction theough the ordinary channels. 8 See, e.g., the Nottebohm Case, [1955] ICJ Rep. 4, 24: “Diplomatic protection and protection by means of international judicial proceedings constitute measures for the defense of the rights of the State.” 9 Case Concerning the Barcelona Traction, Light & Power Co., Ltd., [1970] IC] Rep. 3, 32-51 passim. See text at note 40 infra. 10 GA Res. 1803, 17 UN GAOR, Supp. 17, at 15, UN Doc. A/5217 (1962). 11“The term ‘wealth deprivation’ . . . [is] used principally to avoid the simul- taneous and, hence, ambiguous reference to both facts and legal consequences which so often characterizes the more popular ‘expropriation,’ ‘confiscation,’ ‘condemnation,’ ‘taking,’ ‘forfeiture,’ and the like. It is therefore conceived as a neutral expression which describes the public or publicly sanctioned imposition of a wealth loss (or blocking of a wealth gain) . . . which in the absence of some further act on the part of the depriving party would involve the denial of a quid pro quo to the party who sustains the deprivation (the component ‘wealth’... being preferred to the more pop- ular ‘property’ because it refers to all the relevant values of goods, services, and in- come without sharing the latter’s common emphasis upon physical attributes nor the civil law’s stress on ‘ownership’). Depending on a multitude of factual variables, a wealth deprivation may be found lawful or unlawful.” B. Weston, INTERNATIONAL C.LAIMs: Postwar FRENCH PRACTICE 12 n.10 (1971). 1212 UN TDOR Supp. 1, at 1, UN Doc. TD/B/423 (1973). The resolution, which was adopted by a 39-2-23 vote, Greece and the United States voting against and the developed states abstaining, is reprinted in 11 ILM 1474 (1972). See Note, UNCTAD: Permanent Sovereignty over Natural Resources, 7 J. Worup Trave L. 376 (1973). 13 UN Doc. A/RES/3171 (XXVIII) (1974); 68 AJIL 381 (1974). 14UN Doc. A/RES/3281 (XXIX) (1974); reprinted in Official Documents section, infra p. 484 and in 14 ILM 251 (1975). The Charter was adopted by a vote of 120- 6-10, the United States voting against along with Belgium, Denmark, the Federal Republic of Germany, Luxembourg, and the United Kingdom. This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 1975] EDITORIAL COMMENTS 361 The UNCTAD resolution, after reaffirming the principle of permanent sovereignty over natural resources, states that “any dispute” concerning a state’s nationalization of foreign-owned property “falls within the sole jurisdiction of its courts... .”%5 Similarly, Resolution 3171( XXVIII) pro- vides that “any disputes which might arise should be settled in accordance with the national legislation of each state carrying out such measures,” *° surely an open invitation to nationalizing states to enact measures making their domestic courts the final arbiters on disputed questions.17 Finally, the Charter of Economic Rights and Duties of States specifically requires that “where the question of compensation gives rise to a controversy, it shall be settled under the domestic laws of the nationalizing State and by its tribunals... .”18 Read together, the two resolutions and the Charter are no more than a thinly-disguised attempt to endow the Calvo Doctrine, which maintains “that aliens are not entitled to rights and privileges not accorded to nationals, and that therefore they may seek redress for griev- ances only before local authorities,” 2° with limited international status. This development, which would immunize states from potential interna- tional responsibility by denying alien claimants the right to seek the diplo- matic protection of their states, is as unnecessary as it is unfortunate. In the first place, whatever pragmatic arguments once existed in favor of the Calvo Doctrine now have disappeared. To the extent that it origi- nated as a defensive reaction to substantive norms which allegedly dis- criminated against smaller states, as some authorities have suggested,?° surely this raison d’étre carries little weight today in the wealth deprivation field, where the standard of compensation required has been leveled from “prompt, adequate and effective” to “appropriate” to “possible.” 24 Hav- ing participated fully in this reformulation of the substantive norms, it is somewhat inconsistent for the developing states—which pushed through the above two resolutions and the Charter—to support a doctrine per- 15 1] JLM 1475. 16 See note 13 supra. 17 An invitation Kuwait immediately decided to accept. The Times (London), Mar. 20, 1974, at 19, col. 2. 18 UN Doc, A/RES/3281 (XXIX) (1974) (Art. 2(2)(c)). 19FP), Sea, THe Carivo CxiausE 19 (1955). As Shea correctly notes, “[i]t is ap- parent that the acceptance of these two concepts would result in the elimination of the ‘enemy’ of diplomatic protection.” Jd. at 20. Supporters of the Calvo Doctrine are frank to acknowledge this objective. For instance, in his Separate Opinion in the Barcelona Traction Case, supra note 9, at 294, Judge Ammoun states flatly that it “is aimed at nothing less than the abolition of unilateral diplomatic protection. .. .” 20 See, e.g., Judge Ammoun’s comments in the Barcelona Traction Case, supra note 9, at 290-95 passim. See generally the writers cited in note 1 supra. 21 Resolution 3171(XXVIII) provides that “each State is entitled to determine the amount of possible compensation and the mode of payment. ...” See note 13 supra. Moreover, paragraph 4(e) of the Declaration on the Establishment of a New International Economic Order, adopted by the UN Generali Assembly at its Sixth Spe- cial Session in 1974, while reaffirming what it characterizes as a state’s “inalienable right” to nationalization, for the first time omits entirely any reference to a corres- ponding duty of compensation—even under a “possible” compensation standard. UN Doc. A/RES/3201 (S—-VI)(1974). The resolution is reprinted in 68 AJIL 798 (1974) and in 13 ILM 715 (1974). This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 362 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 69 mitting them to avoid the application of those same norms.”? Moreover, to the extent that it originated as a reaction to the acknowledged abuses surrounding diplomatic protection in the past,?* surely the elimination of the right of forcible self-help to protect property abroad ** and the general international atmosphere of the postwar period have combined to redress the balance.?> In short, states whose conduct measures up to interna- tional standards have little to fear from diplomatic protection, while its abolition would leave alien claimants without even nominal procedural safeguards under the existing international legal order.”° With the above pragmatic arguments no longer persuasive, supporters of the Calvo Doctrine have fallen back upon the anachronistic notion of state sovereignty in their attempts to discredit diplomatic protection, contending that it is “in flagrant contradiction with international democratic ten- dencies” 2" for one state to press upon another state claims originating in alleged injuries to the former's nationals. Actually, as Freeman has ob- served from an inclusive world order perspective, if anything is anti- democratic “it is the dogma of extreme sovereignty which repudiates the international responsibility of the state, and which would remove all restraints upon arbitrary and illegal conduct, whether directed against nationals and foreigners alike, or against foreigners alone.” 8 For, despite the fact that the Calvo Doctrine, both in general and as incorporated in the UNCTAD resolution, Resolution 3171( XXVIII), and the Charter of Economic Rights and Duties of States, is couched in procedural terms, the real issue involved is the international responsibility of the State. Its opponents simply do not want any question raised as to com- pliance with their international obligations; they do not wish to run 22 Cf, A, FREEMAN, supra note 6, at 462: “No political entity claiming to enjoy the rights and privileges of membership in the society of nations can defend the incon- sistent position of ‘legislating itself’ out of its international obligations.” Unfortunately, many developing states apparently take precisely this position. 23 For a forceful critique of past abuses, see Judge Padilla Nervo’s comments in the Barcelona Traction Case, supra note 9, at 247. 24 See generally D. Bowett, SELF-DEFENCE IN INTERNATIONAL Law ch. V (1956). On the right of forcible self-help to protect persons abroad, see Lillich, Forcible Self- Help to Protect Human Rights, 53 Iowa L. Rev. 325 (1967), and HuMANITARIAN INTERVENTION AND THE UNITED Nations (R. Lillich ed. 1973). 25 Indeed, as Freeman observed some years ago: [T]he shoe appears to be on the other foot. Now certain of the weaker states have adopted a policy of resisting every claim, irrespective of merits, at all costs, and of seizing every opportunity to tear asunder the principles of state responsibility which operate for the benefit of the international community as a whole. This is a most unfortunate tendency, not only from the standpoint of true justice, but from that of these states’ real interests. To seek to eliminate diplomatic pro- tection is short-sighted in that its disappearance must inevitably discourage the influx of that capital which undeveloped countries still need to fulfill their destiny. Freeman, supra note 5, at 143—44. 26 “Although the acceptance of the Calvo Doctrine would eliminate the abuses of diplomatic protection, it would also eliminate the institution itself, without substituting an acceptable alternative.” D. Sura, supra note 19, at 20. 27 Garcia Robles, quoted in Freeman, supra note 5, at 139. 28 Id. This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 1975] EDITORIAL COMMENTS 363 the risks of an adverse award that might result from submission to arbitration. They wish to encourage foreign talent to assist in de- veloping the country but they also wish to be completely free to take any measures they desire without being subject to a demand for compensation arising out of violations of rights. In brief, they would have the benefits of their bargain but not its obligations.?° While some readers may think the above criticism too harsh, there is considerable collateral evidence to support it. In almost all cases in- volving wealth deprivation, Amerasinghe observes, “offers of international arbitration have been rejected by the nationalizing States.”°° Many of the same states voting for the above two resolutions and the Charter, more- over, have refused to ratify the World Bank Convention on the Settlement of Investment Disputes,*! a neutral-principled document establishing im- partial procedures to resolve such disputes, which specifically preempts diplomatic protection.*? Additionally, when three U.S. aluminum com- panies recently asked for arbitration of Jamaica’s 500 percent rise in bauxite royalties, that country, an original party to the convention, challenged its applicability the following day.** It can be argued, although not very convincingly, that such actions are attributable only to misguided notions of state sovereignty.** Whatever their cause, however, they lead inescapably to the conclusion that the 29 Id. at 144, 30 Amerasinghe, The Quantum of Compensation for Nationalized Property, in 3 THE VALUATION OF NATIONALIZED PROPERTY IN INTERNATIONAL LAw, note 2 supra. 31 The convention is conveniently reprinted in 60 AJIL 892 (1966) and in 4 ILM 532 (1965). Significantly, no Latin American country has ratified it. See Szasz, The Investment Disputes Convention and Latin America, 11 Va. J. Int’. L. 246 (1971). 82 Under Article 27(1) of the convention, “[n]Jo Contracting State shall give diplo- matic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to arbitration under this Convention, unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute.” 60 AJIL at 899. See Broches, The Convention on the Settlement of In- vestment Disputes Between States and Nationals of Other States, 136 RECUEIL DES Cours (Hague Academy of International Law) 331, 371-80 (1972-II). 83 N.Y. Times, June 26, 1974, at 66, col. 2. 84 Young noted a decade ago that the acceptance of international jurisdiction over such disputes “seems to be considered as in some way derogatory to a state’s sovereign dignity and national pride. This is to look at the matter the wrong way round. The advance of technology and the economic and social forces at work in the modern world demand of all peoples, whatever their stage of development, continually closer coop- eration for the benefit of all. The provision of machinery for the settlement of differ- ences concerning private foreign investment should be viewed in this context, as part of the growth of international institutions of all kinds required to keep the modern world functioning.” Young, International Remedies in Investment Disputes: A For- ward View, in RicHrs AND Duties oF PrivaTE Investors ABROAD 359, 377-78 (1965). Thus, for a newly-independent state to accept international jurisdiction “is not to regress into colonialism but to exercise the right of a free people to join with others in securing a rule of law before which all stand equal. This is not to move backward but to lead the march toward a better legal order in this field.” Id. at 378. This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 364 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 69 states involved simply are unwilling to accept an international regime to resolve wealth deprivation disputes, even one which meets and satisfies their objections to the traditional substantive norms and procedural tech- niques. This state of affairs is doubly disappointing, for as Young has remarked: Procedural improvements . . . are not only desirable in themselves but may also be expected to have a beneficial effect on the growth of the substantive law. Good machinery does not, alone, ensure good law; but good machinery invites use, and use builds the practice and precedents which put flesh on the bones of principles.** Unfortunately, the immediate prospects for the establishment of new or the use of existing international machinery, which would help to put “flesh on the bones” of documents such as the UNCTAD resolution, Resolution 3171 (XXVIII), and the Charter of Economic Rights and Duties of States, look pretty bleak.* Given the above situation, Judge Jessup’s comment in the Barcelona Traction case that “[t]he institution of the right to give diplomatic pro- tection is surely not obsolete” *” is truer now than ever before. With its impressive juridical credentials,** its incorporation in the Vienna Conven- tion on Diplomatic Relations,®® and its recent “unquestioning adoption” *° by the International Court of Justice, there normally would be little cause for concern in the camp of its supporters. The efforts to circumscribe the doctrine described in this Editorial, however, obviously are regarded by many states as the thin edge of the wedge.** For this reason alone, until the international community grants alien claimants access to effective international machinery guaranteeing third-party determination of wealth deprivation disputes, the modern doctrine of diplomatic protection of 35 Id, at 377. 36 Indeed, all signs point to further attempts to institutionalize the Calvo Doctrine in the wealth deprivation field. 37 Barcelona Traction Case, supra note 9, at 165. 38 See text at and accompanying notes 7-9 supra. 89 Under Article 3(1)(b) of the Vienna Convention on Diplomatic Relations of 1961, one of the stated functions of a diplomatic mission is “protecting in the receiving state the interests of the sending state and of its nationals, within the limits permitted by international law. . . .” The convention is conveniently reprinted in 55 AJIL 1064, 1065 (1961). See Kerley, Some Aspects of the Vienna Conference on Diplomatic Intercourse and Immunities, 56 id. 88, 94-95 (1962). 40 The phrase is from a forthcoming essay by Fatouros entitled The Transnational Corporation. Even as bitter a critic of diplomatic protection as Judge Padilla Nervo admitted in the Barcelona Traction Case that “[flor the time being, the principle which recognizes the capacity of a State to intervene, by way of diplomatic protec- tion of a company of its own nationality, has proved to be a fair and well-balanced safeguard or insurance, both for the investor and for the State, where foreign com- panies operate.” Barcelona Traction Case, supra note 9, at 245. 41 See Judge Ammoun’s admission in the Barcelona Traction Case, supra note 9, at 294, that “[t]he path toward this unconcealed objective [abolition of diplomatic protection] is certainly a long and arduous one... .” This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions 1975] EDITORIAL COMMENTS 365 nationals abroad *? warrants the continued vigorous support of all en- lightened internationalists.** R. B. Liniica 42 By “modern” is meant a doctrine stripped of the abuses surrounding its use in the past, see text at and accompanying notes 23-26 supra, and sensitive to the real or imagined grievances not only of alien claimants, but of respondent states as well. For an intriguing “self-preservation model” of diplomatic protection, see Goodsell, Diplo- matic Protection of U.S. Business in Peru, in U.S. ForemicGN Ponicy AND PERU 237 (D. Sharp 1972). Examples of the growing use of assistance short of formal espousal may be found in R. Liwuich & G. CHRISTENSON, INTERNATIONAL CLAIMS: THEIR PREPARATION AND PRESENTATION 98-101 (1962). 43 This support, moreover, need not be defensive in nature nor grudgingly given, since regardless of its present imperfections the doctrine remains what it always has been: one of the few halfway effective procedures for the international protection of human rights. On the generally overlooked interrelationship between diplomatic pro- tection and human rights, see Freeman, Human Rights and the Rights of Aliens, 45 ASIL Procs. 120 (1951); Garcia-Amador, State Responsibility in the Light of the New Trends of International Law, 49 AJIL 339 (1955); and Weis, Diplomatic Pro- tection of Nationals and International Protection of Human Rights, 4 HuMaNn RicHrTs J. 643 (1971). See also L. Sonn & T. BUERGENTHAL, INTERNATIONAL PROTECTION oF Human Ricuts ch. 2 (1978). After the expulsion of the Ugandan Asians in 1972, the UN Sub-Commission on Prevention of Discrimination and Protection of Minorities decided to “consider the problem of the applicability of the present provisions for the international legal pro- tection of the human rights of individuals who are not citizens of the country in which they live and to consider what measures in the field of human rights would be de- sirable.” UN Doc. E/CN.4/1101, at 60 (1972). At present the Sub-Commission is considering several draft declarations on the subject. See, e.g., UN Doc. E/CN.4/Sub. 2/L.598 (1974). This exceptionally important development seems to bear out Free- man’s caustic observation that “[e]ven those nations which in the recent past would have choked trying to swallow the much more restricted concept of a minimum stan- dard for aliens, today apparently do not experience as great a degree of indigestion at the conference table when asked to partake of a bill of fare garnished in a dressing called ‘human rights.”” Freeman, supra, at 122. In any event, the Sub-Commission’s long overdue attempt at a synthesis of these two branches of international law is a welcome development, especially when compared to the trends considered in this Editorial. This content downloaded from 132.77.150.148 on Thu, 21 Jan 2016 15:39:17 UTC All use subject to JSTOR Terms and Conditions