Victor V. Ramraj ESADE Barcelona 8 February 2013

1. Private Power Resurgent?Privatization, State Capitalism, and the Future of Modern Constitutionalism Victor V. Ramraj ESADE Barcelona 8 February 2013

2. backgroundmapping constitutionalism: states, companies, and regulators in a post-national world • assuming… • the orthodox’ liberal constitutional goal of limiting state power • the transformation of private power • the growth of global regulation • … how do we make sense of state constitutionalism? • this lecture • what are the implications of the resurgence of transnational private power for domestic constitutionalism?

3. background mapping constitutionalism:states, companies, and regulators in a post-national world • assumptions of constitutionalism: • the subordination of private power to public power • the hierarchical and vertical orientation of constitutional law • the nexus between constitutional law and territory

4. background mapping constitutionalism:states, companies, and regulators in a post-national world • claim: constitutionalism needs to… • acknowledge the blurring line between public and private power • rethink ‘state action’ doctrine and apply constitutional norms to private actors • loosen the link between constitutional jurisdiction and territory • book outline • history of company, constitution (2, 3) • private power resurgent? (4) • global regulation (5) • rethinking constitutionalism (6, 7)

5. aim of this talk implications of private/hybrid power for modern constitutionalism • private power resurgent? • the rise of multinational enterprises • the emergence of state capitalism • 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

6. 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

7. 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)

8. the return of state capitalismChinese National Overseas Oil Company, 2012 • ‘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)

9. 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

10. 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

11. rethinking constitutionalism state and non-state actors • states as • regulators of public power • wielders of private power (SOEs) • non-state bodies as: • wielders of private power (e.g., MNEs) • regulators of public power

12. rethinking constitutionalism a modest proposal • constitutionalism needs to… • acknowledge the blurring line between public and private power • rethink ‘state action’ doctrine and apply constitutional norms to private actors • loosen the link between constitutional jurisdiction and territory