The single market, international trade, international disputes and the rule of law

Former Guyana Finance
Minister Carl Greenidge.
Former Guyana Finance Minister Carl Greenidge.

By Carl Greenidge

Guyana’s complaint before the ICJ against the Venezuelan Government is based on a number of factors among the most important of which is Venezuela’s breach of one fundamental legal principle, a state cannot sign a treaty, benefit from the implementation of its provisions for over 63 years then, when convenient, simply unilaterally declare the treaty null and void. The sanctity of treaties is enshrined in Article 26 of the 1969 Vienna Convention on the Law of Treaties (VCLT). Thus, either both parties have to agree on invalidity or, a Court or other Tribunal, would have to do so. Since Guyana will not agree to invalidate the Paris Arbitration Award, Venezuela would need to seek from a competent international tribunal or authority a declaration to that effect. It has refused.

A second concern about Venezuela’s position turns on a matter not yet before an international Court.  It is Venezuela’s proclamation of Decrees (Leonie Decree of 10th Jan 1968; 1781 of May 27th 2015; 1859 of 2015; 4415 of Jan 2021, inter alia), in its local legislation that purports to confer maritime rights, to which it would not be entitled under international law. A cardinal principle of international law is that [ex post facto] domestic legislation cannot override obligations entered into under the international treaties a country signs. Article 27 of the VCT states that no municipal rule may be relied on as a justification for violating international law.

This article seeks to draw attention to the issues being raised by Guyana in the international fora and the implications for that case of principles Guyanese seem to be pursuing elsewhere in the region. The rights and wrongs of the specific issues matter but the main point being drawn to readers’ attention is the question of inconsistency in our treatment of laws, local and international, and its implications for our search for support among the international community.

The Government of Guyana’s (GOG’s) success in the international arena, and underlying the support it has received in its efforts to resist Venezuela at the international level is based, in no small measure, on the reputation which Guyana gained for being an adherent to, and supporter of, the rule of law, in the international sphere. Many observers would attribute most of GOG’s successes in the international arena to the effectiveness of Guyana’s Foreign Service, to the quality of its diplomats and the formidable reputations that these two have built since independence. It is no small feat for a small state like Guyana to have been elected both as a non-permanent member of the UN Security Council and as President of the General Assembly, in both instances setting precedents for the English-speaking Caribbean; likewise a seat on the International Court of Justice, when the Attorney General at the time, Dr Mohamed Shahabuddeen, unseated the powerful incumbent judge from Brazil.

But that is only a part of the story. The other part is consistency in public policy. Guyana has routinely supported other states in the face of bullying and wrongs by the larger members of the UN in particular and big international institutions. It is prudent to embrace the rule of law even when interests including those of close bilateral partners are at stake. Guyana has tried to be balanced in its international relations under the banner it embraces as non-alignment. Furthermore, in so far as funds permit the GOG usually participates in fora whether or not it has a direct interest in the items on the agenda. It seeks to lend support to its allies and more importantly, to just causes. For these reasons, Guyana has been able to mobilize support for its causes and to secure support from the Caribbean region as well as the Third World and the wider international community when the need arises.

There is danger in sullying that record.

On Wednesday a friend shared with me a blog reporting that the Inter-American Commission on Human Rights (IACHR) is due to shortly hold a virtual hearing on the ‘Situation of Human Rights of Haitian People in Human Mobility in the Region’. The hearing is to be a forum for testimonies on the alleged escalation in ‘the cycle of migration-related abuses and torture faced by Haitian Migrants in their journeys across the Americas’. Those reports which refer to well-documented abuses stemming from racism in North and Central America are also expected to highlight the growing incidence of similar abuses in the Caribbean whose member states, signatories to the Revised Treaty of Chaguaramas, are obliged to permit Haitians hassle-free travel and an automatic six-month stay upon entry. It is reported that one agency will be contending that Guyana has arbitrarily stripped Haitians of this right. It is reported that there are numerous incidents of serious abuse which, “unfold in the context of a rising tide of racist and xenophobic rhetoric in Guyana and other CARICOM states that stigmatize [sic] Haitian migrants as undesirable…”. Readers who do not recall the events can refer to the newspaper reports carried in Stabroek News (SN) of Dec 19th 2020 with comments from Guyana’s Attorney General and the Chief Justice. Material can also be found in the Caribbean National Weekly such as of June 25, 2021.

Apart from the embarrassment of being cited before the Commission for alleged Human Rights breaches, of all things, against Caribbean citizens, the story has other implications for Guyana. As observed by Guyana’s Chief Justice last year, a  major challenge here has been the inconsistent explanations being offered by authorities. Haitians have been arrested, fined and deported on grounds that they are victims of people trafficking. But the perpetrators escape  the attention of the law! The Attorney General (AG) and legal system prefer to penalise the victims. In any case, most Haitians, as the figures show and the authorities admit, use Guyana as a point of transit to French Guiana, Brazil and as far afield as Chile. Consequently, there are far more Venezuelans, Cubans and Brazilians in Guyana than there ever are Haitians. The Venezuelans and Brazilians are visible on the streets of Georgetown and most are trafficked or employed without ever acquiring work permits. Yet unlike the Haitians they do not attract anything like a proportional attention of the Police. It is this inconsistency, if not absurdity, rather than stupid or biased observations, which is giving rise to questions about Guyana’s policies.

It has fed the effort to have the GOG arraigned before the regional body on Human Rights, the IACHR and can have adverse implications for Guyana’s international standing.

As it happens, at the same time an ill-tempered debate has erupted in the region about whether or not Guyana’s recent legislation on Local Content in the Oil and Petroleum sector (Local Content Act 2021 – No. 18 of 2021. Gazetted on 31 December, 2021) is consistent with the country’s obligations under the regional treaty underpinning Caribbean integration and most importantly, the Single Market. The President of the Guyana Chamber of Commerce and Industry (GCCI), Mr Timothy Tucker, launched an attack on the  Caribbean Private Sector Organisation (CPSO) leadership  because they dared to question whether the legislation is consistent with Guyana’s obligations under the CARICOM Single Market and Economy (CSME). Not surprisingly this exchange has been joined by many in the Guyana private sector, a segment long wedded to monopoly. Among them is the relatively successful young and highly regarded Guyanese attorney-at-law, Mr Sanjeev Datadin, who also joined in support of Mr Tucker. He first claimed definitively that the legislation does not infringe the Treaty of Chaguaramas because it does not prevent Caribbean citizens from entering the oil and gas sector in Guyana (Datadin, ‘Local Content law does not violate CARICOM single market rules- Attorney Datadin’ Demerara Waves 13th Jan 2022), it merely ‘concretizes the production sharing agreement’. That observation reads suspiciously like a debating trick and does not constitute an appropriate refutation of the matter at hand. Mr Datadin has  accused those who disagreed with Mr Tucker of, “clouding the obligations under the CARICOM Revised Treaty of Chaguaramas with investment obligations”. (SN March 17, ibid p. 22).

Non-discrimination has been a key principle underlying the negotiations on liberalisation of the international trading system since the end of WWII and the start of the Uruguay Round in 1982 in particular. It is captured in two rules known as Most Favoured Nation treatment (MFN)  and the National Treatment obligation. In simple terms, the MFN obligation, the subject of the first GATT Article, prohibits a country from discriminating between other countries; the national treatment obligation prohibits a country from discriminating against other countries. Where special privileges are granted those privileges have to be extended to all other trading partners. Ironically given the present context, the main exception to this rule is a Common Market – such as the CARICOM Single Market and Economy!  There is absolutely no reference to petroleum, which incidentally has no significance in economics beyond being a commodity. Neither is there an exception based on a particular definition of local content or free movement. The consistency simply turns on whether ‘Chaguaramas’ permits Caribbean nationals/firms to be treated differently from Guyanese. Art. 7, Art. 31 (2a & 2b) & Art. 37 of Chaguaramas in particular, do not permit it, except in clearly defined terms.  Guyana is not in a position to ignore the rule on grounds that it has either now thought up a justification or has just begun the production of petroleum. Neither can alleged discrimination by T&T in the past, constitute such justification. What is more, today unlike 2015, T&T can claim that there is more than one regional petroleum producer, Guyana is not unique in that regard, and the region’s capacity to supply market for petroleum services, technical skills and abilities is clearly wider than Guyana.

When the relative size of the petroleum and gas sectors are taken into account it is not obvious that there is no space for suppliers actors other than Guyanese. The same problem apparently does not apply to services such as insurance. Resolution of the problem may be found in the end in the fashioning of targets in a manner more consistent with our obligations rather than in quantitative floors/targets.

That a debate of such import could so quickly reflect heightened ill-will, shows how easily public debate in Guyana, whether in politics or business, can quickly  degenerate into personal attacks and abuse. Whilst the Guyana Government has not been party to these contentious exchanges, one of its prominent and new MPs has been and recently. President Ali has offered a comment to the effect that no Head of State has complained of the alleged breach. A Government does not have the privilege of merely fighting for sectoral or personal monopolies; it has a wider mandate. Yielding to the private sector’s (and Guyana’s in particular) everlasting search for monopoly has serious adverse implications for the long-term competitiveness of the oil and petroleum sectors. There is the additional question of international, including safety, standards in a state where the NGO and the very private sector are so vocal in airing concerns for the consequences of a major oil spill.

In the face of criticisms, both Messrs. Tucker and Datadin have gone on to suggest that, if Guyana’s obligations have been infringed, Guyana should seek to ‘opt out’, secure exemption from those obligations or ultimately withdraw from the Treaty (OilNow March 16. Suffice it for me to point out the reality in the realms of the Dismal Science and International Trade, namely that after the USA and Canada, the Caribbean is our most important export market and (just a little thought should make it evident that) being closed out of the latter market will adversely affect the long-term prospects of Guyana’s key industries and frustrate any effort to diversify out of petroleum products. Does this also point to a reigniting of the debate on the shifting of the location of the CARICOM Secretariat, which is provided for in Art 23 of the Revised Treaty, if Guyana is to cast off its moorings from the Community?

My point, for the purposes of this piece, is that this attitude and this approach have implications for our national interest, our international standing and are likely to impact on support by the international community for Guyana’s case against Venezuela.

As regards unhappiness with an existing agreement such as Chaguaramas (by the Private Sector) or the 1899 Paris Award (by Venezuela), international law does not permit a state to sign a treaty, enjoy specific benefits as a signatory, adhere to the provisions then suddenly refuse to adhere to those provisions for whatever reason is deems currently convenient. Opt-outs may be sought and secured during negotiations not 50 or 5 years after Treaties have been signed and invariably require the consent of the other parties (see Art 237,e.g., of the Revised Treaty. There is an agreed process by which a disagreement or claim of invalidity can be resolved. That is why we have the Courts and a CCJ, in particular. A less time-consuming and less costly mechanism than approaching the CCJ itself for a formal opinion would be for the Heads to trigger either the Good Offices Dispute Settlement Mechanism, to establish a Working Group of Heads of Government to consider the matter or to request  an Advisory Opinion from the CCJ. Any of these could spare us the  poisonous debate to which we have been subjected.

Unhappiness on the part of the Venezuela Government with its share of the maritime space off of its coast cannot be resolved by resorting to domestic law. The numerous Presidential Decrees of Venezuela, which seek to annex the maritime space of Guyana and those of nine other Caribbean states is a brazen display of extra-territorial legislation.  As stated earlier, somewhat differently, “it is a basic principle of international law that a State party to an international treaty must ensure that its own domestic law and practice are consistent with what is required by the treaty”. The tail must not wag the dog!

Conclusion

The international community has made some effort to accommodate small states and recognisably disadvantaged economies when it comes to rules governing international trade agreements. The international community has, however, not agreed exemptions from the rules for petroleum (new or longstanding) producers. Whether Guyana is dealing with the CARICOM single market and economy, international trade disputes or the World Court, it is in our interest for Guyanese and their Government to recognise consistency and to consistently embrace the rule of law in confronting the challenges these fora pose.