An Increased Presence of Non-state Actors - Research Paper Example

?There has been an increased presence of non actors in the field of international dispute resolution. Discuss the significance of this move towards greater transparency and participation of NGO's for example at WTO and ICSID Introduction In recent years, numerous international conflicts have been observed in different parts of the world. These conflicts have caused significant losses in life, property, and issues in terms of peace, safety, security, as well as governance. Traditionally, these disputes are often handled by state actors who have the legal tools and guidelines to resolve these issues. In recent years however, non-state actors, including NGOs, individual personalities, and even private corporations have also become more involved in the management of these international disputes. This is a significant development especially as greater transparency and participation of the NGOs at the WTO and the ICSID can be ensured. This paper shall discuss significance of such move in eventually securing transparency and improved participation of non-state actors in the actions and decisions of the WTO and the ICSID. Initially, this paper shall discuss incidents wherein non-state actors have taken a greater role in the field of international dispute resolution. The relevance of their role in terms of transparency as well as improved participation shall also be presented. A focus on the role of non-state actors in relation to international financial institutions shall also be discussed in this paper in order to better understand the impact of non-state actors on the international community. Body The elements involved in maintaining and building states calls for the assistance and participation of all state and in this case, non-state actors. Capable states are those which have strong and responsible as well as vital forces to ensure peace, prosperity as well as public goods for the people (Ulimwengu, 2007). The state has long been considered the primary focus of these processes, and the non-state actors have a crucial role to play in supporting these national and government processes (Mabogunje, 2000). It is therefore important to determine who these actors are. It is also important to identify the aspects of governance where they can assist and to understand better how they work, their style of interventions, and the barriers interfering with their actions (Catbagan, 2011). In Africa, the role of the non-state actors have been especially significant in terms of ensuring the security and public safety of non-state territories, and those territories where issues of insecurity have impacted on state capacity in terms of security management (Ulimwengu, 2007). Issues and challenges in governance and development have prompted the need for assistance from non-state actors. This was the same in different parts of the world, including Asia, Africa, and even Europe. As transitions in African rule were observed, major shifts in political relations were also observed (Ulimwengu, 2007). The end of the Cold War was seen alongside efforts to democratize African countries and in the midst of these challenges, non-state actors emerged in the form of NGOs and other related organizations (Woodward, 2013). In Easter Europe, some of these groups had a crucial role in toppling the communist regimes. This was seen in Poland with the union-based Solidarnosc, including other movements in Romania, East Germany, and the Soviet Union (Heines, 2010). There is not much evidence to indicate whether these actors persisted in their role within the post-communist regimes; still, their roles have been acknowledged and their possibilities have also been considered for other areas. Non-state actors have become more accepted in the international community in the past few decades as politicians, sociologists, and mediators have sought their expertise especially where certain state actions have to be understood in terms of impact and sustainability (Ulimwengu, 2007). Non-state actors include NGOs and are generally understood within civil organizations; however, it is important to understand that there are crucial elements which differentiate some NSAs from the rest of civil society (Haque, 2011). Still, civil society, non-state actors and NGOs are often used interchangeably, with confusion setting in in relation to how issues like safety and security are being handled. Issues on policy have been noted where areas of insurgency have been observed. This includes the case of Burkina Faso and South Africa. Non-state actors, including a Burundi radio station helped to ensure civic responsibility by sustaining the norms of civility as well as neighborliness (Ulimwengu, 2007). Such actions have been considered effective in providing supplemental assistance to the state. After the collapse of the Soviet Union, the South Caucasus area was a very unstable region. Non-state actors, like NGOs helped bring about stability in the region (Simao, 2013). This was observed in the case of transnational energy corporations in Azerbaijan and Georgia. These energy companies represented major sources of income, helping secure their recognition from international players (Simao, 2013). These companies also helped ensure regional securing as they impacted on maintaining dynamics in security, impacting on international policies by external actors. These non-state actors, they helped neutralize political tension in the region by pushing national governments towards supporting their financial concerns via straight policies for foreign policy. These energy companies also managed to interfere in the domestic politics via investments in the region (Simao, 2013). The International Network for Economic, Social, & Cultural Rights (2007) discussed that in April 4, 2007, the Centro de Estudios Legales y Sociales (CELS), an NGO in Argentina filed an amicus curiae paper to the ICSID, which was hearing a water-related investment issue filed by a corporation against Argentina. The investment dispute is based on a dispute between the Argentina government and a group of transnational water companies based on France, the UK, and Spain. The amicus curiae pointed out violations of human rights law if the plans by the company were to continue. The ICSID tribunal later decided to include the amicus curiae brief even with objections from the consortium. The tribunal set a precedent with this decision as it allowed a non-state actor to speak for public interest, allowing for common society to enter its comments within formal international channels (International Network for Economic, Social & Cultural Rights, 2007). Moreover, NSAs have been providing assistance to the state through its salutary remedies while providing services (Ulimwengu, 2007). This was seen in South Africa, especially as long years of apartheid has made the non-White communities more likely to be self-reliant and be better placed towards managing their own policies and activities to manager their problems. In Malawi, with the poor state of governance, the link with the non-state actors has become useful in ensuring the provision of essential goods and services (Armstrong, et.al., 2010). Nigeria also indicates a contrast especially as with their reasonably abundant resources, the developments have not indicated support for the private or the non-state actors, especially where these developments are limited in size and are only observed in small regions. Instead, the bigger groups, mostly state are often prioritized (George, 2007). In relation to other sectors like agriculture where Africa has given up its control of the farmers’ cooperatives, two instances may indicate what can be gained when the NSAs are allowed room to work, ensuring services to the citizens in areas like research, development, finance, as well as marketing (Ulimwengu, 2007). In Benin, the decentralization of the government allowed for the emergence and dominance of the Federation des Unions des Producteurs du Benin, a farmers’ organization. This organization worked well with government agencies, securing research and services, also working well with farmers and protecting interests in marketing as well as pricing (Wennik, et.al., 2006). These are some instances which attest to the fact that both state and non-state actors can work with each other, ensuring significant gains for both sides. Even with the mistrust which is sometimes observed between the state and non-state actors, there is still room for them both to bring about improvements in the lives of the people, for as long as respect for each other can be ensured and common grounds can be found in their work (Ulimwengu, 2007). The non-state actors and other civil society groups are not there to supplant the government because the state roles relates to legislation and the maintenance of national security which cannot be covered by non-state actors. On the other hand, the government cannot also cover all sides of community governance (Pleines, 2010). Concerted action is needed. Non-state actors are also not adept in their newly acquired role in civic activities. Still, even state actions are also evolving in terms of their capabilities and capacities. In order to secure a significant impact by the non-state actors on governance for countries, it is important for these actors to utilize the basic elements of good governance, including accountability, respecting their policies and allowing for transparency of their finances (Armstrong, et.al. 2010). It would not be advisable for these groups to accuse the government of wrongdoing when they also cannot justify their own activities. In the last few years, the policy making processes have become more globalized. In the midst of such globalization, intergovernmental organizations (IGOs) have played a huge role. These IGOs have become one of the main organizations who have bridged state relations in order to resolve political issues (Hurd, 2011). Although these IGOs help in the regulation of various actors, changes in policy-making have also been observed. For the past few decades, NGOs have also become strong participants in the formal and informal IGO meetings (Tallberg, et.al., 2013). Even without any direct contact and interactions with non-state actors, trends toward IGO transparency have been observed. Such developments relate to increased non-state actor participation as well as greater transparency in IGO governance which shall be regarded as organizational opening (Weise, 2010). Such opening is very much welcomed within the context of expanding globalization trends. Questions on the need for open organizations have been raised. Raustiala (1997) discusses how states can actually benefit much from these non-state actors especially as they secure the crucial resources necessary in the policy-making stages of the IGOs and state actors. By opening their organizations, states are able to gather the political resources and eventually become stronger regulators of global relations. New norms in non-state actor participation support the fact that these actors are effective partners in the field, especially as they also help secure democratic processes. As discussed by Grigorescu (2007), states, including IGO administrators and NGOs help prompt IGOs to be more transparent in their activities. There is also a link between the democratic norms setup by IGOs and the possibility of IGOs applying greater transparency. Greater non-state participation relates to resource-based and norm-based rationales. Resource-based theories indicate how changes within the usual framework of governance imply participative and transparent styles in rule-making being the correct model for legal global processes. These resource based variables are founded on institutionalist elements in international relations. They indicate three styles which may cause greater non-state participation (Tallberg, et.al., 2010). With IGOs react to complicated policy areas and call for the establishment of different tools of governance, they also need to retrieve data. The more complicated the conditions are, the information retrieval becomes more complicated. Supporting non-state actors which may have already have the data or who can gather the data without much cost, may be the better option (Weise, 2013). Moreover, the equal distribution of data decreased imbalance of information between states, ensuring more effective decision-making processes. States also have an interest in wanting to ensure that the policies they enact within the IGOs would be implemented in the field. As IGOs and states may sometimes not have sufficient funds on how to ensure effective operations, they may then opt to step-up participation (Weise, 2013). Openings would therefore ensure that external actors who have better capabilities are included in the field. For instance, outsourcing activities such as humanitarian assistance to some NGOs can help reduce the strain on resources because the IGOs do not have to develop their operational expertise. States also help secure IGOs in order to link themselves to the international commitments agreed upon (Tallberg, 2002). For the areas with complicated problems, it would be difficult to evaluate if all individuals are managing their commitments. Under these conditions, the non-state actors which participate in evaluating state activities can be useful tools. Non-state actors may have the expertise to evaluate state activities and policies in relation to the local and global frameworks (Weise, 2013). The same resources are indicated in order to understand greater transparency. In terms of information balance, the smaller member countries are more concerned about decreasing information gaps. Based on the implementation elements, it is specifically the IGO leaders which have a vested interest in securing transparency and implementing activities in the field (Weise, 2013). Effective implementation elements ensure improvements in the IGOs image, and weak implementation outputs can be applied by the administration to ensure the availability of financial tools. Transparency in terms of success in the monitoring of state policies and plans improves the image of IGOs. Within the resource logic considerations, different conditioning variables can increase the possibility for organizational opening (Weise, 2013). Initially, the options supporting or not supporting the opening is based on the call for more experts who may be needed to manage the issue. Under these conditions, organizations would likely require technical expertise; they may also impose rules to manage the highly technical applications which may impact significantly on external expertise (Weise, 2013). A greater demand for expertise is also crucial in ensuring transparency. In order to ensure profit from such external expertise, it is important for the organization to reveal some of the data to those who are set to lend their expertise. IGOs having a significant amount of operational resources are likely to open their organization. Organizations with bigger operations on field call for more resources in order to monitor and implement their decisions (Tallberg, 2013). In effect, more participation for organizations if they seek more expertise and external resources in governance or in cases where their activities are based more on expert knowledge and resources over time. Moreover, transparency may call for IGOs having a greater demand in operational resources to relay the demand to their environment. In general therefore, for organizations having limited resources, the participation of non-state actors is needed in order to secure participation and transparency (Weise, 2013). For organizations having unbalanced memberships, more participation and transparency may also be required to a greater extent. The non-state actors which also manage complicated issues may call for more participation and transparency because these complicated tasks may also increase the need for expertise and monitoring, as well as increase in information asymmetries. (Weise, 2013) NGOs represent a large number of non-state actors which are advocating various causes. Some of these NGOs have political advocacies, and others have environmental, societal, and health advocacies. Some are also simply concerned with international finances (Haque, 2011). This would mean that the main aspect of their activity is based on monitoring the activities of the IMF and the World Bank. NGOs have mostly had an impact in securing and building the development objectives. In effect, the increased attention to social elements and the highlighting of poverty, the environment as well as local communities in terms of World Bank projects are outcomes relating to the retrieval of information, analysis, and prompting public discussions (Haque, 20111). In some parts, the success of the NGOs has been very encouraging. Without the assistance of the NGOs, it is difficult to consider the highly indebted countries and their request for debt forgiveness would have gone further than it has. The NGOs has also secures assistance to development states in managing trade problems within the WTO. It has also assisted in discarding the suggestion of developed states to secure the Multilateral Agreement on Investment (Haque, 2011). The role of NGOs have been crucial in ensuring that the IMF and the World Bank would provide more information and would be more willing to take part in discussions with the civil society. The presence of NGOs however has also caused issues. NGOs have increased in number in the years since they were first established. Some of these NGOs have indicated that the current financial processes cannot be salvaged (Sapra, 2009). A complete rebuilding is needed. What such rebuilding would need is however not entirely clear. The differences in opinion in terms of reform for the international financial processes is unavoidable, however there is an issue when non-state actors involved have a greater impact on the political processes due to their access to central authority (Sapra, 2009). In fact, US and Europe NGOs can be differentiated from each other based on financial, analytical capacity which is higher when compared to NGOs in developing areas. In relation to access and impact on policies of the state, the NGOs in developing countries are widely disadvantaged. The fact that Bretton Woods institutions seem to be more sensitive to criticism from their territories seems to make the issue more difficult (Haque, 2011). The efforts of the international finance institutions in spreading data and engaging the participation of society in developing states seems to be very much deficient. Their policies and information are sometimes not made accessible in local parlance and languages within these developing regions (Haque, 2011). One of the effects of this is that the activities of the NGOs in developed countries have expanded further. The effect of the society’s criticism on lawmakers seems to be stronger when compared to the executive branch of the country. In the US, with the separation of state functions, the NGO issues with the World Bank or IMF has caused pressure on the lawmakers to cease funding even where international commitments have already been established (Haque, 2011). Such situations have not been made better by the wrong data spread by the media on the exact financial implications of the financial support being sought, including the activities and policies of the international financial institutions and other UN agencies. Ever since the Asian financial crisis unfolded, the IMF has tried to develop improvements in reporting from its developing countries on various areas, based on the fact that it would serve as data which would help support markets (Sapra, 2009). The creditors would not be too keen about lending if they knew the actual financial condition of the borrowers. Moreover, banks would stay cautious if they were also adequately managed. In the same vein, the decisions of investors would also be founded on more secure data if the policies managing security markets met with international requirements (Making, et.al., 2011). However, there is also a moral angle observed in this situation. The quality of a state’s reporting including its compliance with international requisites is considered as an evaluation of its support of honesty and sound practice, including transparency. In effect, the establishment of international standards in relation to fiscal elements of the national entities is now related to significant efforts to support international financing plans and programs (Making, et.al., 2011). In fact, this is one of the aspects where major steps have been used to support the unstable financial conditions. The IMF has a huge role in securing standards in relation to codes in places which are not within its jurisdiction, in managing major macroeconomic information, and also in guaranteeing transparency in fiscal policies (Haque, 2011). In the end, the IMF has also secured codes in relation to practices in relation to fiscal transparency. Standards have also been set with the end goal of managing statistical data. As far as the major industrialized countries are concerned, the focus of the IMF on its main activities, it not sufficient (Haque, 2011). The IMF has discussed before that practices of countries in non-essential areas had much bearing on the Fund surveillance as well as Fund-supported activities. The IMF must therefore evaluate these areas before it can support the efficient processes in financial systems. The non-essential issues relate to accounting, corporate governance, as well as the management of insurance and securities. As a result, the IMF surveillance is being expanded in terms of coverage to include aspects where little expertise has been observed (Haque, 2011). The elements and codes within the non-core areas are supported by the private sector, with a measure of supervisory authority also attributed to them. This has caused some problems with the IMF. For instance, it is still called for to assess the extent of coverage for the non-priority issues and determine actions to implement based on specific standards and regulations (Haque, 1999). The IMF is not certain about the impact of standards on surveillance; moreover, it is also important to define the function of various institutions in assessing and understanding regulations and standards. The role and impact of the bodies setting standards in terms of the application of the Bretton Woods applications has a different application from the NGOs. The link here is not adversarial, but is collaborative based on the understanding that these actors have a directive and advocacy which is not based on their relationship with the international finance institutions (Kapur and Webb, 2000). This is also a link which cannot easily be understood and conceptualized. As it stands, it has been challenging for the IMF and the World Bank to work with each other, especially as observed during the East Asian crisis. Working with other agencies can prove to be more of a challenge. Alongside the issue of overlapping concerns and policies, the agencies will find it difficult to secure a balance between their work with each other and still maintaining their independence in their decisions and assessments (Kapur and Webb, 2000). Much concern on the collaboration with agencies would likely turn into the exertion of pressure and ganging up on developing countries. Non-state actors also come in the form of private credit-rating groups whose impact became more significant with the increase of private capital and increased international financial issues. The need for risk assessment on the states’ power to fulfill their foreign responsibilities (sovereign credit ratings) increased as more states having divergent default risks started to secure loans from international bond markets (Haque, 2011). Recently, some of the private firms working in high-risk countries have also tried to gain entry into foreign bond institutions and foreign investment companies have also expressed interest in the local currency bond institutions. However, an increased interest has also emerged in terms of the general country risk involved. Private sector credit-rating agencies like the Moody’s Investors Service and Standard and Poor’s have carried out these evaluations for many years (Haque, 2011). There are direct and indirect implications of these assessments on sovereign risk for developing countries. Evidence exists on ratings declining with the increase in sovereign debts. Evidence has also been noted on the major impact of these assessments in terms of what can be observed in terms of GDP growth, inflation, fiscal and balance of payments, deficits, and other elements. These are standards which can be used in the assessment of country performance (Cornford, 2000). This also indicates that the ratings by agencies include valuable data which can be used as basis for macroeconomic status. In general, such macroeconomic data helps the market determine rating assessments. Market assessments for sovereign risks sometimes seem to come before the risk assessment of these agencies. There are crucial implications in terms of credit ratings agencies during times of financial difficulties and crises. These ratings also impact on the burden of borrowing, and this is seen with the designation of the risk weights on bank assets in terms of the assessment of capital adequacy requisites, as indicated by the Basle Committee for Banking Supervision (BCBS) (Cornford, 2000). At first, their guidelines in terms of adequate capital covered international banks in 12 countries, however, following the international financial crises, the Committee’s policy has been expanded and has since been considered an international standard measure. The main issues in terms of credit agencies relate mostly to the accuracy and the reliability of their risk assessments, whether such ratings increase the possibility of contagion, and the impact such risks may have on the costs of borrowing for developing nations. On one hand, the ratings agencies do not always have common grounds in assessing risks. Cornford (2000) indicates how convergence in ratings for Moody and Standard and Poor’s got worse when the ratings were decreased. This meant that there was a more common consensus on borrowers with higher ratings as opposed to those with lower ratings. There are also considerations on agency assessments sometimes following major incidents, including financial crises, not so much preceding them. Negative ratings also seem to have a more significant impact as compared to positive ratings (Cornford, 2000). This referred to the sudden decline in bond prices upon the receipt of bad news. This was opposed to adjustments in better outlooks taking more time. With all these elements taken together, it may seem apparent that risk assessments are more likely to increase issues in credit markets and may likely lead to a financial crisis. As such, there is sometimes an understandable caution on developing as well as developed countries in considering credit ratings from these non-state actors and use them as basis in securing basic capital requisites for banks (Haque, 2011). Conclusion Based on the discussion above, non-state actors now play an extensive role in resolving disputes, not just within the realm of peace and order but also within the realm of politics as well as international and local financial markets. These non-state actors have been credited for securing transparency and participation, serving as impartial bodies in relation to the credit ratings, international security disputes, GDP assessments, as well as ensuring the assessment of issues which private citizens and governments are going through. Non-state actors have become an influential force in relation to management, decision-making as well as the activities of financial institutions like the IMF and the World Bank. This has crucial implications in terms of the mandates for the financial institutions and governance, as well as the concerns of the developing countries. NGOs have helped expand the development goals to cover the social and environmental effect of financial institutions and their activities, making these actors more sensitive to the public’s clamor. Ensuring standards for accounting, audit, insurance and financial security is part of the makeup of financial markets seeking to function efficiently while also upping their general transparency and reliability. References Armstrong, D., Bello, V., Gilson, J., & Spini, D. (Eds.), 2010, Civil Society and International Governance: The Role of Non-State Actors in the EU, Africa, Asia and Middle East. Taylor & Francis. Catbagan, A, 2008, Rights of Action for Private Non-State Actors in the WTO Disputes Settlement System. Denv. J. Int'l L. & Pol'y, 37, 279. 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