Revue Européenne du Droit
The Role of Soft Law in Global Governance: Heading Towards Hegemonic Influence?
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Issue #2

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Jean-Marc Sorel

21x29,7cm - 186 pages Issue #2, Spring 2021 12,90€

Governing Globalization

To tackle the topic of soft law is to engage prima facie in a vast discussion on the forms of normativity in law. This will not be the case here. There are many technical and comprehensive studies on the question, and it seems unnecessary to replicate them 1 . Rather, the aim will be to ascertain the implications of the use and methods of soft law in the context of global governance, including insidious or hidden ones.

We will simply point out that the modulations of the norm are infinite in law, especially since formal sources, which simply attest to a process that makes it possible to target certain norms, are now competing with multiple ways of producing the norm that reflect the actual process of its formation, particularly in international law. The discussion is not recent. The law is greater than the formal source, as Jean Carbonnier 2 reminded us quite some time ago, and Hans Kelsen expressed himself no differently: “Ordering is not, however, the only function of a norm; enabling, permitting and repealing are also functions of the norm” 3 .

As a result, there are many combinations of mandatory, supplementary, permissive, prescriptive or prohibitory standards, especially since the instruments carrying such standards may also be soft or hard. In international law, this translates into practices, guiding principles and guidelines, when they are not standards that we know are very difficult to classify in a specific category.

Let us add that soft law can no longer be considered as an intermediate or provisional form because it often appears as a substitute and not a complement to hard law, particularly in the context of financial activities, which will be privileged here as illustrating the increasing influence of soft law in global governance 4 . What must be essentially involved is the process of formalizing a norm that will become legal because agents are then convinced that this rule will be useful to them and they will therefore give it legal form. But such formalization is far from corresponding to a univocal and fixed process and sweeps away the binary logic between the forbidden and the authorized, too often presented as the ultimate goal of the rule of law.

If mondialisation relates to the universalization of exchanges, therefore to its substantive law, globalisation 5 relates to the universalization of legal concepts with the creation of horizontal patches of specialization in certain fields. In this renewed universe, soft law plays a central role, which is not new since international law predisposes to it by reason of the absence of a centralized normative system. This role has been accentuated with the growth of the financial sector, which demonstrates the interweaving of public and private, national, regional and international actors.

In order to demonstrate the growing influence of soft law in global governance, it is necessary to retrace the chains of events that place increasingly strong constraints on the latitude of policymakers’ decisions, and that lead to an ever-greater hold of this form of normativity.

1. The variety of factors leading to the influence of soft law

Obligation versus constraint. The confusion between obligation and constraint leaves uncertainties about soft law. Soft law may not be binding but may be more constraining than a legal obligation. While binding force is always constraining, constraining force is not always binding, and while obligations always carry constraints, constraints do not always arise from legal obligations. Rejecting soft law as non-law is often tantamount to ignoring this reality; however, many constraints are more deterrent than obligations. It should be added that the legal bond created by an obligation does not have the same meaning in different legal systems 6 .

In reality, it is the well-known link between obligation and sanction that is targeted. Without obligation, there is no sanction in case of non-compliance, therefore no judge, therefore no right. This is to forget that the sanctioned law is not the whole law, and that the latter is not prima facie characterized by the sanction but by the perception of its necessity by individuals. In economic matters, States are clearly aware that it is in their interest to abide by rules and that the sanction of economic excommunication would be much heavier than a simple legal sanction. Moreover, agents (and not only the States) are aware that soft law can impose compliance with a norm if it arises from a collective need and is in conformity with the spirit in which they wish to intervene. There is therefore a link between the interest of a norm and the consensus to make it real, and this without the need for legal sanction. Compliance therefore results from the fact that social agents, in the broadest sense of the term, perceive it as an advantage, and that they anticipate the benefits that they will be able to derive from the effectiveness of norms.

Lack of grasp of the facts. If the technicity of the law is supposed to calm passions 7 , it can also become a source of confusion or incomprehension, including for jurists. Soft law illustrates this form of disconnection between an increasingly sophisticated technique and the difficulty for the jurist to grasp its contours. Of course, a share of the elusiveness of soft law is consubstantial to its existence, and while no social domain escapes its legal transposition, my impression is nevertheless that we leave it to complex facts to conceive themselves the legal framework they deserve. Unless he is omniscient (utopian) or endowed with hyperspecialization (which, moreover, is not desirable), a jurist, while having to grasp the complexity of a system, cannot be in a position to judge such technicity, which sometimes includes algorithms that are difficult to understand. On the other hand, she is entitled to judge the appropriateness of the use of such techniques. Once again, the financial sector is a particularly illustrative example. It is, in a way, a wild world (because few primary norms seem to dictate its conduct), which is moreover subject to highly sophisticated, extremely technical processes that are difficult for the general public to understand. The uniqueness of economic liberalism (nuanced) thus counters the pressure of the law to regulate its excesses, with even greater resistance.

But this brings us back, above all, to the relationship between law and fact. If the law governs the fact, and if the fact must merge with the law, such adequacy can work only if we can grasp the facts. This is what seems to be lacking today in many fields, including finance: apart from a few specialists in financial engineering, the economic, social and political grasp of facts is imperfect, and the law can only provide an imperfect framework for it. Accounting for norms that are so technical that they escape the understanding of the public at large becomes a holistic question because it leads to a form of desacralization of the law that diminishes the exclusivity of the skills of those who are supposed to master it.

Changes in the validity of the norm. With soft law, the norm supersedes the rule, which is understood to be general and impersonal. Compliance no longer comes from a norm set in advance and complied with, but from its effectiveness and efficiency. Depending on the variations in the validity of the norm, between formal validity (legality), axiological validity (legitimacy) or factual validity (effectiveness) 8 , only the latter seems to prevail. It is the legal categories that adapt to the facts, and not the other way round. Soft law is therefore also a lesson in modesty with respect to legality and legitimacy, which are always subject to the refutation of sociological evolution.

Such evolution is the result of a long unfinished process following the dilution of verticality in horizontal networks (for example, economic regulation), a partial loss of the sacralization of the vertical (and of the belief in immutable institutions), the complexification of relationships, or the interference of the private person within the legal dialogue which is no longer only that of a given order from above which must flow downwards.

Regulation and self-regulation. This set of factors is embedded in the primacy of regulation, this moving law whose purpose supersedes the instrument, and which derogates from the characteristics of an abstract, general and immutable law, to enter into a moving, more concrete and particular sphere, closer to economic “laws”, hence the preference for a more flexible law that favors, for example, standards or principles, as opposed to rules that symbolize stability. Rather than being rigid, this type of law proves to be effective if effectiveness means responding to a given role. The role supersedes the instrument, even if regulation helps to create a semblance of security, because it is a way of making the law work that seems to satisfy the various agents involved.

The concern to obtain the adhesion of the recipient of the rule and his legitimate expectation shape soft law. The authorities that issue soft law assume that, if the recipients are involved in the process of normative production, they will not resist compliance with these rules, which are then considered legitimate. Thus, rather than imposing “hard” norms that can be circumvented head on, it is preferable – even unconsciously – to let the agents regulate themselves, in the hope that they will give priority to legal security over profitability with no safety net and will create a self-regulating system in their particular “order”.

Soft law thus constitutes the privileged vector of a sphere that seeks self-regulation. In this restricted circle, “one feels compelled”, which amounts to a form of opinio juris. In this respect, we can also invoke the autopoietic dynamic transposed from the biological paradigm of the organism to the law, in order to describe legal phenomena that manifest a “normative closure” towards the outside, in the sense that they themselves determine what is legal or illegal, licit or illicit, by adapting to an increasingly complex society 9 . Such a hypothesis corresponds to the world of international finance, which generates and specifies its own organization, and is continually subject to external disturbances that it compensates for. It simply amounts to a Darwinian logic of survival, where markets respond above all to the law of evolution and adaptation. This is all the more insidious since an institution will tend to study all problems from the point of view of its functionality, and to treat them in this way. The dangers are not ignored but, more than asserted, they are whispered.

Soft law thus generates norms that adapt to the expansion of their recipients and are simply hindered by regulatory norms that are both those imposed by the old structures (States, organizations) and those accepted by the agents.

The role of social organization. The legal order is characterized by a set of norms that can be enforced in order to ensure that such order is respected. However, with soft law, control is superior to sanction. Consequently, it was quickly understood that this relative normativity did not correspond to the role of social organization of the international legal system, a role that we can expect to be played by any legal system. Indeed, soft law as an autonomous system of regulation of international relations would extract itself from a uniform legal order to respond to the particular concerns of a restricted corporatist group, most often economic, and it is the strength of the economy that makes soft law sometimes hard law without a predetermined legal order.

Taking this line of reasoning as far as possible, one may even wonder about the need for soft law to evolve within the framework of a legal order. There is a form of “de facto power” 10 , and soft law uses all channels (political, economic, social, etc.), which leads us to observe that it does not matter for soft law to be law, or that it is itself ignorant of being law, unless such quality is “revealed” to it.

The law has a double role: besides its role of “giving orders to men”, it also has a mission of regulation which is that of “giving an order to things” 11 . Thus, from the moment the framework succeeds in imposing such social order, in putting order into disorder, we are potentially in the presence of law, even in the absence of a legal order in the strict sense of the term.

Law captured by communication. Soft law is an Anglo-Saxon expression, but it is mostly stateless. The French term “droit souple” is still an incomplete translation, giving a false impression of softness, roundness; in short, of benevolence 12 . It is above all one of many stateless expressions, from the same universe as: governance, regulation, transparency or accountability (its translation by “rendre compte” (“account for”) remains just as imperfect), or compliance –a form of semantic relaxation of “bringing into conformity” that resonates above all as the encapsulation of economic transactions likely to soften the potentiality of the execution of a decision. Together, they are the hallmark of an unbridled neo-corporatism linked to communication. Words are used to soften the rigor of the rule: governance broadens government, accountability makes it possible to reduce responsibility to its visible side, transparency –a one-way mirror– allows everyone to be accountable without necessarily taking responsibility. Jean-Arnaud Mazeres states: “The law of the market, making law a commodity, leads to the market of law” 13 , which is also a form of normative dumping.

2. Hegemonic temptation and regression of the democratization process

The combination of the preceding remarks leads to one observation: the soft power of soft law can lead to a form of hegemony in world governance, which some might call soft totalitarianism, through technical and financial domination of the planet. While soft law seems to be imposing itself as an increasingly common and renewed way of considering normativity, it is also legitimate to gaze at its hidden side; in other words, does this arrangement not lead to a new form of hegemony through law? Even if it is more an intuition than an informed assessment 14 , we cannot help noticing that while we find many qualities in soft law, we can also think of it as a form of steamroller replacing the traditional order of constraint by a constraining order. The phenomenon of soft law is being assessed in terms of its foundations, effects and consequences for the legal order, without necessarily being willing to go beyond such legal analysis to place this phenomenon in a broader context. Meanwhile, as a certain form of irrationality poses as science and with self-regulation being the norm, private agents can now make pronouncements on the failure of States (and impose remedies on them); as the general interest is replaced by category-based private interests, the risk of a kind of hegemony emerging is not negligible.

Hegemony is understood here as Antonio Gramsci defined it. The absence of a real reaction to the global nature of the logic of things that is pursued and integrated into society leads to what is commonly referred to as cultural hegemony, a concept that describes the cultural domination by a group and the role that everyday practices and collective beliefs play in creating systems of domination. It is an old analysis, which may seem outdated, but which already pointed out some shortcomings no less relevant today: sirens of nationalism, consumerism and social ascension against a backdrop of individualistic competition. The monopoly of soft law when hard law is unable or unwilling to impose itself can also be a danger that is all the more pernicious, the more diffuse leadership is. Such law presented as false volunteering is also imposed with its suggested constraints, most often economic. An advertising slogan unwittingly but very well summarized this phenomenon: Soft is the New Strong.

The sequence is logical (and could be said “fateful”): starting from an expertise that is both technical and neutral, the norm is introduced at the national, regional or international level in symbiosis with the dominant economic dogma that is spreading and permeating the entire international system in a gentle but perfectly compelling way. The risk of the replacement of the general interest by category-based private interests is no chimera and is reinforced by a form of denial of real democracy, as such norms rarely reach national parliaments or the jurisdictional bodies of states. This is not recent and has, for example, been the hallmark of the “Stand-By Arrangements” —which are not treaties in the legal sense— concluded between the IMF and applicant countries for decades. It is also believed that the monitoring mechanisms (sometimes opaque because of their technical nature, despite their displayed transparency) of the standardization bodies serve as a substitute for public debate 15 .

The international financial architecture is a particularly heterogeneous whole from the point of view of the bodies that participate in it. Indeed, it includes multilateral institutions open to all States, such as the IMF, the World Bank, IAIS and IOSCO. Other bodies have a smaller base. This is the case of the BIS, which comprises some 60 national central banks, or the OECD and the FATF, each of which has about 40 member states. The circle is even narrower for the Basel Committee, the FSB and the G20, which have respectively 27, 24 and 19 member states represented (plus the EU) and operate on a “club” basis. The G20, the body that is to steer such international financial governance, has in this respect the smallest membership base from an inter-state point of view. There is therefore a gap between the plurilateral composition of the bodies and the multilateral scope, or even universal ambition, of their standards in the form of soft law.

However, once transposed into domestic legal systems, international financial standards become norms that overwhelmingly affect the regulatory framework applicable to the provision of financial services. The result is a pernicious social constraint, because it is not acknowledged. Let us take as an example the standards of the Basel Committee in banking and prudential matters: the adoption of one standard leads to the need to adopt a whole set that becomes necessary as a matter of consistency. “It is therefore a question of placing the recipients of the rules, using different techniques, in such a situation that they will have no choice but to comply with them. In other words, the international authorities do not seek to sanction a violation of the norms, but to force compliance with them, even before any violation occurs” 16 .

Although the hegemony in question here is there different from the one envisaged by Mireille Delmas-Marty, who refers to the hegemony of a State 17 (which, by its power, would be a form of “empire”), we agree with her when she states: “Apparently less constraining, soft law is sometimes more effective, and ultimately more repressive, than hard law” 18 . The soft law system can indeed become more “repressive” in the sense of an imposed constraint, and not a specific sanction.

While law in general should probably be more subject to the criterion of refutability, in particular to avoid the scientific isolation that conditions the way in which this subject is considered, soft law offers an opportunity to do so, because it is indeed experience that takes precedence over the scientific nature. Through soft law, law rediscovers itself as fragile and ephemeral even as it thought it was immutable in its fundamental build-up. Nevertheless, fragility concerns more the ways of considering law than the involvement of soft law in this context, because it is also a matter of norms of power. The aspiration towards rationality –which we hoped to reach– being diluted in the meanders of the norm is troubling, but this does not change the parameters of power, because it is more an issue of a shift towards agents who were until then in the shadows. The Promethean aspiration of states to master reality fades and experimentation can hardly enter into preconceived boxes because practice requires no more than adapting to reality.

Should we despair of ever seeing law come out of the trap of power? Several signals are pointing towards a return to a certain balance. First of all, in the financial sector, taken here as a pertinent example of the spread of soft law, the logic of security tends to counterbalance the logic of profitability and pushes agents towards a legal framework.

To put it plainly, we are prepared to lose “a little” in order to gain in security. On the other hand, if, as Mireille Delmas-Marty points out: “Our conception of sovereignty needs to be renewed. In order to create a rule of law without a true global state, universalism is too ambitious and sovereignism, by withdrawing into national communities, is too timid” 19 , we have reason to wonder whether this “timid sovereignism” is in fact a godsend, and whether the internationalization it calls for is merely a comeback to the sources. In a way, it would be necessary to return to Jean Bodin, without the detour via Hobbes or Hegel.

State sovereignty was initially envisaged as coexistence for states that have always been plural, unlike an empire. In other words, the support of independence is just as much a means of interdependence. The absolutism of sovereignty concealed this double facet for a long time.The retreat of a form of absolute sovereignty undoubtedly weakens it; but it gives the state the opportunity to refocus on a balance allowing it to take on the role of regulator in the face of such proliferation of soft law, role it has abandoned in favor of entities that are not guided by the general interest. This is how sovereignty, wich intended (or thought it was) to be “solitary”, could become again “in solidarity” 20 . But there must be a global political will in this sense, and the trap of economism must not close definitively on  States.

Notes

  1. Among the most recent in France (non-comprehensive list) : P. Deumier and J.-M. Sorel (dir), Regards croisés sur la soft law en droit interne, européen et international, LGDJ, Paris, 2018, 492 p ; S. Cassella, V. Lasserre and B. Lecourt (dir), Le droit souple démasqué, Articulation des normes privées, publiques et internationales, Pedone, Paris, 2018, 194 p. We will borrow here developments from our previous works.
  2. J. Carbonnier, Flexible droit – Pour une sociologie du droit sans rigueur, Paris, LGDJ, 10th ed., 2001, p. 21.
  3. H. Kelsen, Théorie générale des normes, Paris, PUF, Re-edited 1996, p.1.
  4. J.-M. Sorel, “Quelle normativité pour le droit des relations monétaires et financières internationale ?,” RCADI, tome 404, Brill / Nijhoff, 2020, pp. 235-403.
  5. [TN: the terms “mondialisation” and “globalisation” are left as they appear in the French original, since the distinction made by the author could not be rendered using the English term “globalization”.]
  6. See e.g. : P.- E. Will and M. Delmas-Marty (dir.), La chine et la démocratie, Fayard 2007.
  7. See : P. Servan-Schreiber, H. Pascal and V. Rotaru, “Le droit à l’échelle pertinente”, Revue européenne du droit, Sept. 2020 : https://legrandcontinent.eu/fr/2020/09/14/le-droit-a-lechelle-pertinente/.
  8. F. Ost and M. van de Kerchove, De la pyramide au réseau ? Pour une théorie dialectique du droit, Publications des facultés universitaires Saint-Louis, Bruxelles, 2002.
  9. N. Luhmann, “L’unité du système juridique”, Archives de philosophie du droit, vol. 31, 1986, pp.163-188. On the development of this dynamic in the banking sector, see Hélène Kouyaté’s very comprehensive and relevant analysis : L’encadrement juridique international du secteur bancaire, entre recherche du réalisme et confrontation à la réalité, PhD Dissertation at Paris 1, 2010, 473 p.
  10. P. Deumier : “La réception du droit souple par l’ordre juridique”, in : Le droit souple, Association Capitant, Paris, Dalloz, Paris, 2009, p. 139.
  11. Barrès, quoted by Claude Champaud : “Des droits nés avec nous. Discours sur la méthode réaliste et structuraliste de la connaissance du droit”, in Mélanges en l’Honneur de Gérard Farjat, Philosophie du droit et droit économique, Editions Frison-Roche, Paris, 1999, pp. 69-109, p. 74.
  12. See in this respect the distinction made by Mireille Delmas Marty between “soft, smooth and blurred (mou, doux et flou)”, “Gouverner la mondialisation par le droit”, Revue européenne du droit, n°1, Sept. 2020, p. 7.
  13. “L’un et le multiple dans la dialectique Marché – Nation”, in : Stern. B. (dir) : Marché et Nation, Regards croisés, Montchrestien, Paris, 1995, pp. 81-188.
  14. Although based on concordant studies, some of which are already old. See in particular: A.A. Fatouros, “On the Hegemonic Role of International Functional Organizations”, GYBIL, 1980, pp. 9-36; A.-C. Martineau, Le débat sur la fragmentation du droit international. Une analyse critique, Bruxelles, Bruylant, 2016, XIX-584 p., esp. pp. 337-387; Nico Krisch, “International Law in Times of Hegemony: Unequal Power and the Shaping of the International Legal Order”, (2005) 16 E.J.I.L., p.369.
  15. See T. Bonneau, “La gouvernance technicienne des marchés financiers”, in Le droit souple démasqué, Articulation des normes privées, publiques et internationales, op. cit., pp. 125-133, esp. pp.130-133, as well as our : “Sur quelques aspects juridiques de la conditionnalité au F.M.I et leurs conséquences”, E.J.I.L. 1996/1, pp. 42 – 66.
  16. H. Kouyaté, op. cit., p. 380.
  17. M. Delmas-Marty, « Gouverner la mondialisation par le droit », Revue européenne du droit, op. cit., p. 7 : “Admittedly, it would be possible to govern globalization through law in a simple way. It would be enough to set up a hegemonic system, by extending the law of the most powerful country to the rest of the planet (…) But until now no empire has functioned on a planetary scale.”
  18. Ibid, p. 7.
  19. Ibid, p. 6.
  20. Ibid, p. 11.
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