In the latest episode in Pakistan’s unfolding political drama, Prime Minister Yousaf Raza Gilani appeared before the Supreme Court on Thursday over the failure to prosecute corruption charges against his political patron, President Asif Ali Zardari, who came to power after the assassination of his wife, Benazir Bhutto.

This is no simple one-plot play about a contest over political corruption between the Supreme Court and the civilian government of Pakistan. A joust between a high court and a civilian government is hardly surprising in any democracy, especially one like that of Pakistan, where both courts and civilian governments have been only precariously entrenched since the republic’s foundation after partition in 1947. The latest tensions are also fuelled by a parallel showdown between Mr Zardari’s administration and the military.

With a Senate election due on 2 March, where the ruling Pakistan People’s Party is expected to secure a comfortable majority because of its strength in the provinces, one question is whether the Court will accelerate its proceedings against Gilani and force an early general election (not due in the normal course of events for another year).

The Supreme Court today is different from the courts that validated previous military takeovers. Its Chief Justice was dismissed twice in 2007 by then President and military chief General Pervez Musharraf. He was restored to his position, in the face of a populist movement led by the country’s lawyers, civil society and broad coalitions of opposition political parties. The movement cost President Musharraf his grip on power, and paved the way for the general elections in early 2008 that brought the current government to power. But this same administration also refused to restore the Chief Justice and nearly 60 other superior court judges who had been unconstitutionally dismissed by the Musharraf regime — until it eventually relented in the face of the ‘Long March’ in March 2009, in which millions demonstrated their support for an independent judiciary. The bad feeling on all sides is palpable. Pakistan continues to be a country at war with itself.

The pressure to spill political blood is intense, but hard-headed calculation all round might yet keep malevolent inclinations in check. As Cheema says, what is significant about the memo incident is less that the Supreme Court has decided to side with the military and more that the military appears to have aligned itself with the courts. There is no easy way back to legitimacy for a military dictatorship, whatever the failings of the alternative.

As Pakistan lurches toward general elections, whenever they are held, the government is under pressure from all political quarters, including the courts. But the Supreme Court will not do itself or the nation any service if it is seen to play a direct role in the ouster of President Zardari and his government. Rather it will win credit if it ensures fair elections and adherence to constitutional norms and processes by all, including the military.

1. Pakistan’s clash of institutional authority
2. India’s approach to Pakistan: Whose side are we on?
3. Pakistan: US losing hearts and minds in the battle against terrorism

Pakistan experienced dramatic political crises in 2011, including the covert raid carried out by the US on 2 May, which killed Osama bin Laden, and the killing of two civilians by CIA contractor Raymond Davis.

It was in these circumstances that an American businessman of Pakistani origin, Mansoor Ijaz, wrote a ‘memorandum’ to the US military commander urging an intervention on behalf of Pakistan’s elected government, which seemed on the verge of being toppled by the country’s historically powerful military establishment. Mr Ijaz, for reasons that are not yet clear, later alleged that this memorandum was written on behalf of Pakistan’s ambassador to the US, Hassain Haqqani, a close aide of President Asif Ali Zardari.

The scandal threatens to sink the fragile government, with the courts — as well as the military — now bearing down on Pakistan’s embattled politicians. The Supreme Court has created a high-powered judicial commission to investigate the origins and veracity of the memo. But the government seems set to fight what it sees as the military establishment, the court and the opposition’s common designs to oust an elected president. There is some basis for such paranoia. Every elected leader in Pakistan’s history has been proclaimed a threat to national security at some stage by the military establishment in an effort to justify greater say in the country’s affairs. Pakistan has undergone three major coups, and the military has ruled the country for nearly half of its post-colonial existence. Even during this latest period of elected rule the military has remained powerful, as the government ceded to it ultimate responsibility for territorial defence, national security and foreign policy.

What is different in this round of tussles between the military and the elected leadership is the role of the superior judiciary. The current Supreme Court is a different constitutional creature from the courts that validated or acquiesced in previous military takeovers. Its Chief Justice was dismissed twice in 2007 by then President and military chief General Pervez Musharraf. On both occasions he was restored to his position, due to a populist movement led by the country’s lawyers, civil society and broad coalitions of opposition political parties. The movement cost President Musharraf his grip on power and paved the way for general elections in early 2008, which brought to power the incumbent government. But this same administration also refused to restore the Chief Justice and nearly 60 other superior court judges who had been unconstitutionally dismissed by the Musharraf regime. The government eventually relented in the face of a ‘Long March’, in which millions demonstrated their support for an independent judiciary in March 2009.

The stance taken by the government’s advocates, who claim the Supreme Court has sided with the military and the opposition, arguably has some justification. But this is also the first instance in the country’s history when serving army and intelligence chiefs, having been made respondents to petitions before the court, have voluntarily submitted responses to the court’s notices. The court has held national security matters to be justiciable before the superior courts, crossing the final frontier of executive prerogative and entering territory forbidden to courts in democratic and authoritarian states alike. This precedent is likely to be as wearisome for the military in the future as it is now for the government.

Current events aside, conflict between the courts and the government has been brewing since the restoration of an independent judiciary in Pakistan. The Supreme Court has taken up several high-profile corruption cases and unveiled irregularities in transactions and appointments. These cases highlight corruption and mismanagement at the highest levels of government. One case in particular has brought the Supreme Court and the presidency into direct conflict and is currently receiving considerable attention, threatening to bring down the Zardari government. The Supreme Court has directed the government to contact prosecution authorities in Switzerland in order to re-initiate corruption and money-laundering cases against President Zardari. The government managed to stall this process for over three years. But it now appears the Supreme Court’s patience has run out and enforcement proceedings are likely to lead to contempt charges and an attritional battle with the government.

What is significant about the memo incident is less that the Supreme Court has decided to side with the military but more that the country’s military establishment appears to have aligned itself with the courts. As Pakistan lurches toward general elections scheduled for early 2013 — and with Zardari facing calls to hold these elections earlier — the current government is coming under increasing pressure from all political quarters, including the courts. But the Supreme Court will do itself and the nation considerable disservice if it is seen to play a direct role in the ouster of President Zardari and his government. It will win itself tremendous credit if it ensures fair elections and adherence to constitutional norms and processes by all, including the military. If it does that, 2012 might become a year of hope — despite the political, economic and foreign policy crises on Pakistan’s horizon.

Moeen Cheema is a Teaching Fellow at the ANU College of Law. 

1. Pakistan: The final frontier
2. India’s approach to Pakistan: Whose side are we on?
3. The fallout in Pakistan from the killing of Osama Bin Laden

Few crime victim surveys have been conducted with Chinese populations, but a recently released study, Business and the Risk of Crime in China, analyses the results of the first large scale victimisation survey of 5,117 businesses in Hong Kong, Shanghai, Shenzhen and Xi’an.

This snapshot shows that the level of crime reported by Chinese businesses was lower than other emerging economies such as Brazil, Russia, Nigeria and India, and considerably lower than Western and Eastern Europe. However, incidents of bribery and extortion were more frequent in China than in Western Europe and Australia, but less frequent than in Eastern Europe. Respondents from China were much more likely to report to police than elsewhere, although the levels of reporting of fraud were comparable.

China’s transition from a command to a market economy has been supported by authoritarian policing that has helped contain most crimes against business except fraud. An annual loss to crime of US$20.4 million, most of which was due to fraud by either employees (US$7.5 million) or outsiders (US$7.6 million) was estimated for the sample as a whole. About US$6.4 billion was estimated to have been lost to crime across all the four cities. Larger businesses were most at risk especially to higher risks of victimisation for non-conventional crime. Smaller businesses had a higher prevalence of fraud by outsiders.

Over one-quarter (26.2 per cent) of businesses reported at least one incident of crime over the past year, but higher risks of non-conventional crimes (that is, fraud, bribery, and intellectual property [IP] offences) than common crime (that is, robbery assault, and theft) were found. Across the four cities, the rate of non-conventional crime (22.6 per cent) was 3.4 times that of common crime (6.7 per cent) and businesses in Shenzhen were at higher risk of non-conventional crime (27.9 per cent) than those in Xi’an (25.3 per cent) and Hong Kong and Shanghai (19.5 per cent). Just over 6 per cent of respondents mentioned incidents of bribery, but there were fewer in Hong Kong than the other cities. IP theft was reported by about 6 per cent but was more of a problem in Shenzhen (9.1 per cent) and Xi’an (7.6 per cent) than in Shanghai (6.5 per cent) and Hong Kong (2.7 per cent).

Crime in China has risen sharply over the last 40 years and is associated with a state of anomie or ‘loss of social norms’ that the sociologist Durkheim theorised was the result of rapid and significant societal change. Economic crime, especially fraud also rose at a much faster rate than common or street crime, supporting the hypothesis that a growth in property crime is also associated with modernisation. In times of rapid change, a lag between socio-economic transformation and institutional adaptations to these transformations (‘institutional anomie’) can occur as the crime wave that engulfed the former USSR demonstrated. This institutional lag can be reduced when the economic and social transition is planned and managed by a strong authoritarian state like China. Although China may have been more capable of controlling institutional anomie, its failure to establish independent oversight and checks and balances has facilitated corruption. Corruption was more frequently reported on the mainland than in Hong Kong, and especially in Xi’an where state-owned businesses and traditional Communist Party control remain strong.

Although public police have been able to contain common or street crime they have not yet transformed into policing agencies with a capacity to focus on crime against business, which is both highly attractive to a new type of criminal and harmful to society. Identifying the ‘new enemies of the state’ has become harder than in the past when the simple categories – class enemies, ‘rightists’, feudal remnants and the like could be readily distinguished and demonised. Economic criminals, it seems, are hard to distinguish from valued entrepreneurs, business leaders and officials who gamble with venture capitalists and fall for fanciful and fraudulent innovators.

In addition to the impact of modernisation and urbanisation, the growth in economic activities and consumerism also increases the opportunity for property crime. The opening up of the Chinese economy has produced both an increase in consumer goods (more opportunities for common crime) and an increase in business and commercial activities (more opportunities for non-conventional crime). Related to increased opportunity is the absence of competent guardianship and target attractiveness – the key drivers of risk of victimisation for business. Chinese businesses thus suffer similar risks as found elsewhere and could benefit from many of the measures recommended by situational crime prevention approaches. The demise of campaign-style policing and the shift to a prevention focus rather than reliance on crude deterrence and brutalising punishments should also help release police resources for greater specialisation in complex crime such as fraud and corruption.

Roderic Broadhurst is a professor in, and Deputy Director of, the Australian Research Council Centre for Excellence in Policing and Security, in the Department of Regulation, Justice and Diplomacy, College of Asia and the Pacific at the ANU. He is co-author (with John Bacon-Shone, Brigitte Bouhours, Thierry Bouhours, assisted by Lee Kingwa) of Business and the Risk of Crime in China, ANU E Press, Canberra, 2011.

1. The highly sensitive art of doing business in China
2. Opportunistic crimes or racist attacks?
3. The Asian noodle bowl: is it serious for business?

At both the APEC and ASEAN summits, attempts were made to deal with the building impasse over the South China Sea issue.

Tensions over the region have grown steadily since 2009, after China, Vietnam and Malaysia submitted their respective claims under the UN Convention on the Law of the Sea (UNCLOS). China’s naval exercises in the region and apparent willingness to showcase its military capabilities in favour of its claims have also exacerbated these tensions.

Currently, states in Southeast Asia are utilising four different strategies to try to solve the issue.

First, states are pushing for bilateral solutions in incremental stages. Beijing has repeatedly stated a preference for this method, but regional states widely regard it as an attempt to freeze resource development, while doing little to actually resolve the various claims. On the other hand, Vietnam and China recently used bilateral diplomacy to reduce tensions.

Second, attempts are being made to resolve the issue at the multilateral level, hopefully utilising ASEAN; many see this as ASEAN’s greatest test. So far it is difficult to achieve much, as only four of ASEAN’s 10 member states are involved in the South China Sea issue, and China has been able to detach the other six members at various times from positions taken by Vietnam, Malaysia, Brunei and the Philippines.

Third, fostering closer ties to the US also remains an option, as Washington is still the predominant power in the region. The Philippines and Vietnam in particular have sought strategic reassurance through new or renewed security agreements with the US; and Washington — concerned that China covets such a strategic sea line of communication — has responded warmly. Hillary Clinton’s recent visit to Manila, for example, saw a US reaffirmation of the US-Philippines Mutual Defense Treaty, while the US and Vietnam are planning greater military cooperation and exercises.

And fourth, Southeast Asian nations are involving non-regional states in the issue. Vietnam’s agreement with India on drilling in contested waters falls into this strategy, and follows a general campaign by Hanoi to engage external states and oil firms — such as Chevron, Exxon Mobil, BP and Zarubezhneft — as a form of pressure on Beijing.

But these strategies are not making the slightest difference, and serve only to exacerbate tensions. Rather, a fifth way, long-discarded by regional analysts, is more appropriate: the introduction of a legal framework for the South China Sea issue.

It seems clear that the dispute cannot be solved by diplomatic or political means. While discussions around the Sea tend to look at continental shelves, innocent passage, exclusive economic zones, global commons and the strategic considerations of US–China rivalry, at heart the issue is one of sovereignty. As such, it holds a particular place in the public perceptions of the six claimant states’ populations. It would be impossible for any diplomat to give concessions on these issues of sovereignty without risking material harm to their government. This is particularly true of China, where there are strong public perceptions over the issue.

Choosing one of the three legal mechanisms on offer — the UNCLOS tribunals, the International Tribunal for the Law of the Sea, or the International Court of Justice — would neatly bypass this challenge, putting responsibility for any decision with a third party. The lengthy period taken in international cases of this type may also be beneficial to regional states: ASEAN and its members could take the time to put resources into education and public awareness on maritime law, investing in legal conferences, seminars and workshops for journalists, politicians and diplomats. This could at least persuade the populations of the legal process’ fairness.

The current push for a code of conduct would do little to solve the problem in the long term — it would only staunch the bleeding. It is imperative that states in the region push for a legal solution. While it is true that Beijing continues to resist such an option, it is not the only one, and might soften its stance if ASEAN’s position on this was clear and consistent. While China feels strongly about the issue, it also cares about how it is viewed globally and regionally.

It would be useful for the region’s states to attempt their own various claims using these legal mechanisms as a first step. States should remember why international law was developed in the first place. In the absence of law, the application of power — soft and hard — has been the primary tool of states pursuing their interests. As China’s power grows, regional states should be seeking to demonstrate to Beijing the benefits, for all parties, of a rules-based system. Like Southeast Asia’s multilateral order, respect for international law provides safeguards for weaker states against stronger ones, but it also allows China to demonstrate its capacity to be a responsible power.

Regional states should realise that by pursuing the legal route they elevate law above self-interest and principle above power. This is an act that ultimately serves everyone’s interests.

John Hemmings is an SPF Fellow at Pacific Forum, CSIS, Honolulu.

1. Can Indonesia mediate the South China Sea dispute?
2. South China Sea dispute: Why China takes a pragmatic stance
3. Is the South China Sea a new ‘Dangerous Ground’ for US-China rivalry?

In authoritarian regimes like China, courts and their judges decide legal cases behind closed doors.

How they do so is rarely examined — but is critically important in comparative judicial studies. China’s unique Adjudication Committees are the highest decision-making body in any court, and operate at each level of the Chinese court system, wielding enormous influence.

By analysing the minutes of the Adjudication Committee from a basic-level court, several patterns can be found regarding their operational and decision-making processes. First, almost all of the criminal cases (96.8 per cent) were reviewed by the court’s Committee, as a result of jurisdictional rules. Second, and more importantly, the Committee modified almost 41 per cent of the adjudicating judges’ suggested opinions in criminal cases — a much higher proportion than in civil cases. Third, the Committee tended to increase the penalty given to defendants, especially when the penalty was a fine.

Overall, the data suggests that among the criminal cases reviewed by the Committee, legally speaking, very few were difficult or significant, but a relatively high percentage of the adjudicating judges’ opinions were modified. In contrast, many of the civil cases reviewed were legally complex, but the Committee was less willing to intervene.

The data also suggests that decision making within the Committee is dictated by the administrative ranking system inside the court, meaning the court president’s authority is enormous. In fact, among the criminal cases in which the adjudicating judges’ suggested opinions were changed, 91 per cent were changed largely according to the president’s suggestions, and 7 per cent according to the director of the criminal division. Only 1.3 per cent of changes were based on other members’ suggestions.

Furthermore, the data and analysis suggest that instead of achieving its declared goals, the Committee has largely degenerated into a device to shelter individual judges and Committee members from responsibility. In particular, judges adjudicating civil cases will submit difficult examples to the Committee, thus divesting themselves of responsibility. In criminal cases, adjudicating judges do not have much choice as to whether or not to submit for review — but being reviewed by the Committee is not inconsistent with their interests, as once a case is reviewed, the risk of being caught for corruption or for deciding cases incorrectly almost disappears.

Committee members are equally safe. Since neither a vote nor a signature is required to enforce their decisions, members can easily inject their legal and extra-legal views without taking personal responsibility for any subsequent outcome. This is also true for the president, who decides on the majority of reviewed cases, but who does so in the Committee’s name. And for particularly significant cases that may have social consequences (for which the president may thus be held responsible) he can simply suggest the Committee seek instruction from upper-level courts, or communicates with the local government in advance about his ruling. Consequently, the Adjudication Committee creates a black hole of responsibility in China’s legal system.

The Committee ultimately plays a limited role in promoting legal consistency and resisting external influences. Given these findings, researchers must turn their attention to rethinking the appropriate role of the Adjudication Committee in Chinese courts specifically, and the relationship between judges and the regime in authoritarian states generally.

Dr Xin Frank He is Associate Professor at the Centre for Chinese and Comparative Law, City University of Hong Kong.

1. Judicial independence in authoritarian regimes: The China experience
2. Chinese law after sixty years
3. The folly of legalism for Fiji’s people

A new sense of optimism seems to be emerging in Myanmar (Burma). The nominally civilian government, formed as a result of last year’s election, has unveiled a series of reforms and offered an olive branch to opposition leader Aung San Suu Kyi.

When the former prime minister turned president, Thein Sein, gave his inaugural speech in March, he addressed serious issues such as national reconciliation, good governance and economic reforms — hinting at a divergence from the practices of his State Peace and Development Council (SPDC) predecessor. Thein Sein’s words have also been matched by concrete actions in the last few months, signalling the possibility for real change. A high-profile meeting between Thein Sein and Aung San Suu Kyi in August was seen as an icebreaker to overcome the animosity between the two camps. And the state-run newspaper, The New Light of Myanmar, has abandoned its long-held practice of daily Stalinist attacks against foreign press and internal dissent.

This suggests that the government is willing to drop its hardline rhetoric and repeal some of its repressive SPDC-era practices. More recently, the government lifted its censorship of foreign news websites, including some of the harshest exiled critics of the government. The relaxation of internet control coincided with the new ambassador-level US special envoy Derek Mitchell’s first visit to Myanmar. A Human Rights Commission was also established around this same time in early September, albeit one primarily staffed by former diplomats and civil servants. Finally, Thein Sein has openly called for Burmese exiles to return and help build the country.

These recent events suggest a serious overture for the new government to improve its international standing and appease the general population — especially in the current climate of economic uncertainty. The dramatic appreciation of the Myanmar kyat has been particularly damaging for the agricultural sector and for many of the country’s already abysmal manufacturing and export businesses.

Part of the frustrations in Myanmar is linked to the continued encroachment on the country’s resources by a visibly growing China — the recent suspension  of the Myitsone Dam project demonstrates this. There appears to be discussion within some government circles aimed at countering an increasingly assertive China by seeking alternative actors to help with the development and re-structuring of its dire economy. If Myanmar becomes ASEAN chair in 2014, its leverage in its dealings with China might increase and give the country an alternative platform to engage the US and the European Union.

But major obstacles still remain that could threaten to derail current reforms. For one, Naypyidaw does not have absolute control of its territory, with several armed ethnic groups openly challenging the state’s authority. Though Thein Sein has called for peace talks with armed ethnic groups, fighting has intensified against the Kachin Independence Army in Northern Myanmar. Without directly taking account of these ethnic groups, any attempts at reconciliation risk collapse. The Upper House has approved a proposal to establish a peace commission to help resolve the ongoing ethnic conflicts. But as a sign of good faith, the government should halt its military offensives and further commit to the peace talks that the president appealed for.

The newly created Human Rights Commission recently wrote an open letter to the president urging Thein Sein to release ‘prisoners of conscience’, a remarkable departure from past practice where the SPDC repeatedly denied the existence of political prisoners. In May, the president granted an amnesty to more than 14,000 prisoners, though few of the early releases were political offenders. A second round of amnesty announced a day after the open letter included some high profile political prisoners, though many remain behind bars. If the government makes a firmer commitment to release the country’s remaining political prisoners, this would potentially generate further goodwill from the opposition and the international community. A more comprehensive political amnesty would be a major breakthrough, and if this is the case, the US-led sanctions should be re-evaluated and gradually relaxed; ideally, by repealing some of the more stringent clauses. A more engaged US, with a fresh attitude toward sanctions, should also allow a greater mandate for international institutions such as the IMF, the World Bank and UN agencies to expand their role in helping the new government overcome many of its developmental obstacles.

Myanmar is at a critical, yet optimum juncture that could potentially lead to a more positive stage in a new chapter of the country’s history. Aung San Suu Kyi is said to have responded favourably to her recent meeting with Thein Sein, and believes changes are taking place in Myanmar. As the two sides are enjoying a new honeymoon period, all concerned stakeholders must capitalise on this momentum of change by finding a common agenda that will allow Myanmar to move toward real national reconciliation.

The stakes remain high for both sides of the political divide. In the event that military hardliners see little progress in improving Myanmar’s international standing, or, worse, if the economy deteriorates and leads to mass social unrest, they could very well muscle back into control of the nation’s agenda before the process of reform truly takes off.

Roger Lee Huang is a PhD student in the Department of Asian and International Studies at the City University of Hong Kong.

1. Why democracy will foster ethnic reconciliation in Myanmar
2. Détente and the Myanmar spring?
3. Myanmar’s new ‘civilian’ government

On 7 September 2011 in Dacca, the prime ministers of India and Bangladesh signed a landmark protocol to their 1974 Land Boundary Agreement, providing for final settlement of their long-pending boundary issues.

Given that instances of territorial dispute settlement in this sovereignty-conscious region have been few and far between, this exercise in statesmanship is both commendable and long overdue. A review of the principles and processes underlying the compromises reveals useful insights into territorial dispute settlement at New Delhi’s end.

The India-Bangladesh boundary is no ordinary one. Hastily constructed in the dying days of British colonialism, it was the longest international boundary created during the age of decolonisation. The border was intended to separate a contiguous majority area of Muslims from that of non-Muslims — but for only about a quarter of its length does it separate a Muslim-majority in Bangladesh from a Hindu-majority in India. As many as 162 tiny enclaves (111 Indian and 52 Bangladeshi) dot a section of the frontier: in the extreme an Indian enclave sits within a Bangladeshi enclave, itself situated within a larger Indian enclave, all surrounded by Bangladeshi territory!

Shifting rivers, mapping errors and ‘adversely possessed lands’ — that is, lands unwittingly encroached upon and (illegally) occupied by both countries — added to the maze of identity, loyalty and insecurity along the Bengal borderland. Sixteen Indian and three Bangladeshi border guards were killed in 2001 following a show of force in a disputed area along the border. Demarcating a boundary has unsurprisingly been a protracted affair.

According to the recent agreement, the Indian enclaves in Bangladesh and the Bangladeshi enclaves in India are to be swapped, enabling unbroken territorial continuity — with minor exceptions — for both states. New Delhi’s claim to compensation for the additional acreage ceded to Bangladesh is waived. The bewildered 51,000 residents in these enclaves will presumably be offered the choice of either relocating or, more likely, having their citizenship switched — although this is not accounted for in the Protocol. The ‘adversely possessed lands’ are to be mutually vacated, something that will be done in conjunction with the swapping of enclaves. Finally, the remaining disputed points are to be marked and delimited, enabling India thereafter to share its first fully demarcated land boundary with a neighbour.  

The Protocol lays down weighty precedents for New Delhi’s territorial dispute settlement practices. Especially notable is admitting an uncompensated swap of territory — during the course of exchanging the enclaves — in effect ceding land to which it holds undisputed title. Minor exchange of disputed territory by New Delhi is not groundbreaking. In 1951, India and Pakistan agreed to exchange two disputed territories on the India-East Pakistan (now Bangladesh) border. And in 1959 the two countries prepared modalities for future exchange of territories pending boundary demarcation. Letting-out undisputed territory on a ‘perpetual lease’ is not groundbreaking either. In 1974, New Delhi leased a narrow strip of territory (Tin Bigha corridor) to the then newly-inaugurated independent government of Bangladesh. The Indian Supreme Court interpreted the lease as a form of ‘undisturbed possession’ for Dacca’s use which did not divest India of its sovereign rights.

But uncompensated cession of undisputed territory along its land border is altogether unprecedented. It also sets a useful precedent for that significant patch of disputed territory that will necessarily have to be ceded to China in the context of a Sino-Indian boundary arrangement in the foreseeable future. With New Delhi already having ceded a small, uninhabited island to Sri Lanka along their maritime boundary line in the mid-1970s, and with the Indian judiciary vesting treaty-making authority wholly to the executive, the swap of enclaves on the India-Bangladesh border should pass constitutional muster.

Two fundamental principles and processes that underlie New Delhi’s calculus of territorial dispute settlement are particularly noteworthy. First, an imperative of good neighborliness has been a fundamental pre-requisite for settlement — New Delhi was willing to meet the Bangladeshi Prime Minister mid-way, even beyond, but only after the latter had met India’s security concerns and walked the extra mile to extend the hand of friendship. Significant credit for the settlement belongs at the Bangladeshi end.

Second, and more important, is a practice of Indian boundary diplomacy which has seen New Delhi admit to the exigencies of ‘zamini haqeeqat’ (ground realities) in disputed border areas — formally seeking to resolve territorial disputes according to the status quo, with least disturbance to local inhabitants. ‘Ground realities’ is formally acknowledged in the India-Bangladesh Joint Statement. Paired with the acceptance of a political parameters-based approach to dispute resolution, it has also unlocked potential for resolving the long-dormant Sino-Indian boundary dispute.

India and Bangladesh should use the goodwill generated through the settlement to resolve their long-pending maritime border dispute. That dispute consists of: (a) demarcation of the coastal boundary line around a tiny island at the point where a common boundary river meets the estuary on the Bay of Bengal, and (b) overlapping EEZ boundary and resource development claims emerging from the concave geography of the Bengal coastline. 

For the former, international arbitration on the tried-and-tested lines of the 1968 settlement between India and Pakistan that divided a semi-submerged tract at the mouth of the Arabian Sea may provide a model for determining the coastal boundary. For the latter, New Delhi should desist from unilateral surveying of the overlapping maritime zones pending judgment of their respective claims at the Permanent Court of Arbitration (PCA) at The Hague. Better still, submitting to settlement principles in the analogous Myanmar-Bangladesh maritime baseline claims case, currently under fast-track International Tribunal for the Law of the Sea (ITLOS) proceedings would be an act of graciousness on New Delhi’s part. Best of all would be joint survey and development of the overlapping India-Bangladesh maritime zone without prejudice to the ITLOS or PCA verdicts. In doing so, New Delhi would also set a portentous precedent for claimants in the South China Sea.

Sourabh Gupta is a Senior Research Associate at Samuels International Associates Inc in Washington DC and a contributor to the East Asia Forum.

1. India losing ground to China on trade with Bangladesh
2. Renewed tension on the India-China border: Who’s to blame?
3. China-India ties: Wen Jiabao in India – making nice slowly

The Supreme Court of India seems to have created a crisis after imposing a large-scale ban on iron ore mining in the Bellary district of Karnataka.

Although the Supreme Court has subsequently allowed the public sector entity National Mineral Development Corporation to continue operations, its imposition of a ban on iron ore mining in Bellary remains an extreme step. The decision was meant to demonstrate the Court’s anger and disappointment at the gross violation of rules and environmental laws by miners in the Bellary region, show the Court’s resolve to bring these rapacious and illegal operators to book, and push the government into taking corrective steps.

The economic losses resulting from the continuation of the ban on private sector units could be enormous and aggravate the slowdown that has already gripped the Indian economy. Nearly 21 million tons of steel-making capacity located in Karnataka is dependent on local iron ore supplies. Of the total production in Karnataka, which provides 24 per cent of the country’s iron ore output, 75 per cent comes from the Bellary-Hospet region. Shutting down the Bellary mines will force a closure of the steel plants located in Karnataka, as they can neither use the low-grade ore from Goa, nor bring in the required quantities from Jharkhand or Chhattisgarh as the transports costs are too high.

The closure of Karnataka’s steel plants will result in huge commercial losses to these companies, but the far bigger impact will be on the loss of production and employment in downstream industries such as automobiles, consumer durables, machine tools and engineering products. The direct employment loss alone could cost around 80,000 jobs, with hundreds of thousands of other jobs being jeopardised in downstream industries.

The government stands to lose Rs 100 billion (US$2.17 billion) in revenues and commercial banks could suffer an asset deterioration of up to Rs 500 billion (US$10.85 billion). Even after excluding other relatively minor losses to railways, state governments and utilities, the negative economic impact of a continued ban on mining in Bellary may be too large for the economy to absorb at this stage given that investors’ sentiment is already frail and global conditions are uncertain. The ban, if continued, will bring the Indian economy to the edge of an avoidable precipice.

In imposing the ban, the Supreme Court is presumably acting on the basis of its past experience. The Court saved Delhi from choking to death from noxious transport exhaust fumes by insisting on a cut-off date for the introduction of compressed natural gas in public transport vehicles. This created a mini-crisis with Delhi’s transport system grinding to a halt for a few weeks. The necessary executive action then followed.

The Court realises that India follows a practice of ‘management by crisis’. Far from acting in anticipation of emerging situations, action is postponed until time has virtually run out. This creates avoidable pressures and incurs unnecessary costs.

But given the predominant culture of management by crisis, the Court, acting on practical logic, has again decided to create a crisis — one which is far larger in its coverage and impact than stopping the Delhi public transport system in its tracks. Executive action will hopefully follow.

Can India really afford such repeated crises? And are they really a necessary condition for generating the required policy response and action?

The impending crisis will extend to all mining, including iron ore, coal, bauxite, copper and other minerals. This would result in India foregoing the use of its very large reserves of these natural resources that are essential for industrialisation and growth. Such an outcome would be disastrous. India would have to import massive volumes of these minerals, putting unsustainable pressure on its balance of payments, rendering its industries uncompetitive and generating a massive loss of employment.

The Court would do well to put together a group of relevant experts and industry personnel to find a way out of this impending disaster. There are two practical steps that could be taken. First, immediately establish three technically-competent and independent regulators, one each for iron ore, coal and other minerals. These regulators, by drawing up the necessary regulations and enforcing them strictly, will de-politicise the sector and minimise violations of environmental laws and the rights of indigenous peoples.

Second, the government has to ensure that its policy framework attracts large, organised, technologically well-equipped and socially- and environmentally-conscious mining companies which are more susceptible to public pressure and less prone to corrupt and illegal business operating practices. Such companies could effectively develop those mineral reserves which lie either under forest cover or lands populated by indigenous peoples without causing environmental or social damage.

There are some elements in the draft mining law, as it exists today, which could have the unintended effect of driving out large and organised miners from the sector and encouraging those who are rapacious and have zero concern for indigenous peoples rights or the environment. As it stands, the law will only result in India being unable to take advantage of its own natural resources. This will effectively deny India its natural advantage simply because of an inability to jettison the culture of management by crisis.

Rajiv Kumar is Secretary-General of the Federation of Indian Chambers of Commerce and Industry.

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Accompanying China’s miraculous economic growth over the past decades have been its equally impressive urban regeneration and expansion.

This is characterised by the ever-modernising city landscape and a record-breaking rise in urbanisation rates from less than 20 per cent to over 40 per cent within 22 years. But the other side of the story is not as bright and encouraging: in urban China, take Shanghai as an example, over one million households lost their homes due to urban redevelopment between 1995 and 2008. In the rural area, approximately 100 million mu of cultivated land was taken by the state for urban construction from 1986 to 2006, roughly equal to one-fourth of the total area making up the UK. About 120 million Chinese peasants, nearly twice the whole of the UK’s population, have been displaced to date. The resultant pressing problems and unnerving prospects have already become internationally known.

This has inflamed the indignation of many whose primary concern lies in the protection of human rights and private property in China. Others worry that the fast shrinkage of cultivated land in China will undermine the food security for one-fifth of the world’s population, which is now raised by just 7 per cent of the total arable land on the planet. A third anxiety is rooted in the question of whether the increasing mass protests against compulsory land takings have opened Pandora’s Box for the legitimacy and stability of the current regime.

Whatever grave practical consequences large-scale land expropriation has had in China, it should be noted that it takes place under an increasingly sophisticated legal system, regulating the power of eminent domain — that is, the compulsory, compensated, expropriation of private property by the state — to prevent encroachment of private properties, loss of valuable arable land and the disturbance of social stability. But in light of the reality, these legal efforts turn out to be largely in vain.

A straightforward and popular explanation to this legal failure is that China’s eminent domain law is still undeveloped compared with those in Western developed countries. For instance, the ‘public interest’ prerequisite is vaguely defined, the due process of acquisition has not been erected and compensation standards remain unfairly low. But this still struggles to explain why Chinese eminent domain law fails to trammel the abusive use of the power. A comparison with or a transplant of foreign law inevitably falls short of offering an answer to this. The underlying logic of the legal failure can only be exposed if we place the law in its socio-political context.

First of all, haunted by its historical legacy which blindly prioritises collective interests over individual rights, the once revolutionary party-state nowadays still regards land acquisition primarily as a political campaign to drive the mass in order to achieve its policies. The legalisation of eminent domain power is yet to make a substantial mark on the mentality of the leadership.

Secondly, the conflict between different policy goals further dampens the effort in bringing the power under control. Despite the growing emphasis on cultivated land preservation and respect to human rights, the all-power imperative of industrialisation, urbanisation and ultimately modernisation seems to defy any counter-balancing measures.

Lastly, as a result of fiscal and administrative decentralisation in the 1980s, the regime is constantly vexed with fragmented authority between the central and local states. Especially since the 1994 tax-sharing reform, the central government has taken a larger share of the budgetary revenue, leaving the local states in a financial deficit and creating a strong incentive for them to seek extra-budgetary revenue to invest for economic growth, provide public goods and maintain social stability. Moreover, as most of the decision-making power concerning eminent domain has been handed downward to the local players, it is becoming more difficult for the central party-state to hold the huge bureaucracy accountable to prevent localism and corruption, which in effect undergird much of the abusive acquisition.

To sum up, through the prism of the evolving and struggling eminent domain law, the progress, challenges and setbacks along China’s way of subjecting the party-state to the rule of law will be revealed and analysed. It is apparent that without an abandonment of its revolutionary mentality, a streamlining of its competing policies and an overhaul of its accountability mechanism, a robust and effective legal system will remain an air castle in the People’s Republic.

Chun Peng is studying a Doctor of Philosophy in Law at Oxford University and is a delegate at ANU Asia Pacific Week 2011.

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After the Asian Financial Crisis in 1997, most Asian states moved towards a regulatory model that gave judges a greater role in resolving contentious social issues such as land disputes.

This policy of judicialisation, submitting new social and economic problems to regulation by courts, faced considerable hurdles in transforming socialist Asia, particularly in China and Vietnam. Political intervention is the standard explanation for poorly performing courts in this region. But I will argue that politics is relatively unimportant in the numerous land cases in which state interests are not an issue. In resolving land claims, courts encounter more deeply rooted problems than a lack of judicial independence and may not be the most appropriate means of regulating this type of dispute.

Attempts by party leaders to legislate uniform land laws have not succeeded in displacing pre-existing community based self-regulatory systems. Decades of socialist land policies constrained self-regulation and private land markets without eliminating them. Following market liberalisations in the late 1970s, community based self-regulatory systems recovered their popularity and in some urban centres even began to rival state-backed procedures. In juggling competing land claims, courts today face a dilemma: do they uphold state laws that disregard local regulatory traditions and risk losing social relevance, or do they apply community notions of situational justice which undermine land rights codified in legislation? This is a significant problem because grievances about access to urban land pose a serious challenge to government legitimacy and social stability in China and Vietnam.

For decades self-regulatory communities in urban centres have constructed housing and land markets based on small contingent commonalities between community members, without a reference to abstract land rights. Consequently, just access to land is not primarily understood by referencing predetermined legal rules and rights, but rather by engaging sentiments of sympathy and solidarity with family and community.

Courts dealt with community disputes by flexibly applying the law. Socialist legal thinking discouraged judges from bringing legal discourse into conversation with the community norms and epistemological assumptions which informed self-regulating land markets. This promoted a bifurcated dispute-resolution system in which judges strictly enforced socialist legality to protect party and state interests while they applied the law only flexibly to other cases in order to accommodate the norms and epistemological assumptions animating the self-regulatory systems. Depending on the nature of the dispute and the status of the parties, judges would use both legal formalism and community based regulatory traditions.

Recent legislation extending greater recognition to private property rights has not reconciled these two systems, because the law continues to disregard self-regulatory approaches to land. To make the matter worse, judicialisation and the associated push for greater rule formalism insists that judges should become more detached from self-regulatory communities. As this policy gains momentum, pressure is mounting for judges to further insulate themselves from the community and uniformly apply standardised and exclusive property rights. At the same time, judges are expected to remain engaged with socialist legality and blur property rights to protect party and state interests.

Most judges seem to genuinely want their judgments to reflect self-regulatory approaches to land. Some even regard statutory property rights as an alien concept incommensurable with community beliefs. To engage with the community and put an end to disputes, they felt the need to reconcile property rights with community claims to property. Strictly enforcing exclusive property rights leads to winner-takes-all outcomes that fail to settle the underlying dispute because the losing parties frequently petition government and party authorities. Judges need discretionary flexibility to bridge the epistemic divide between state and community understandings about just access to land. Judges are concerned that rule formalism may have the unintended consequence of reducing their capacity to find lasting solutions to land disputes.

Another problem with judicialising land disputes is that conciliation and mediation are better at reconciling law with community justice than strict legal reasoning is. The purpose of law in judicial rulings is to create legal fictions that provide solutions to otherwise socially intractable problems. Despite decades of legal reforms, surveys routinely show that many citizens in China and Vietnam distrust legal solutions to land disputes.

Looking ahead, the centralising forces of rule formalism are unlikely to annihilate community property norms and practices. Despite the central state’s strong opposition, self-regulatory traditions have proved remarkably resilient and adaptable. In fact research suggests that no matter what the government does many urban residents are likely to continue using community based regulatory systems. But if the state recognises self-regulatory land systems, it will leave in place the power and epistemic relationships that undermine attempts at creating unified national land tenure regimes.

In searching for a regulatory response to land disputes the state will eventually need to find some accommodation between state and non-state systems. In the short term the dialogues that might encourage the state to learn from self-regulatory communities are most likely to occur in quasi-judicial citizen compliant tribunals that are given discretionary power to experimentally apply the law. These bodies have close links to government policy makers and can draw on their national expertise to craft a universal set of land law principles. To remain relevant courts need flexibility in applying the law: a requirement that calls into question rule formalism and the judicialisation of land disputes.

John Gillespie is Professor of Law and Director of the Asia Pacific Business Regulation Group, Department of Business Law and Taxation, Monash University.

This article was previously published in a past edition of the East Asia Forum Quarterly, Regulatory Reawakening.

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