Global compliance with 'International Law'

Roy Snell

Global law is some way off - for all the volountary treaties and directives the lack of a globally respected method of enforcement means there's a way to go

The concept of International law is interesting, particularly with respect to the ever-increasing global economy.  However, to get international agreement on what the international laws should be seems impossible.  Even if we were to agree on what the international laws ought to be, international enforcement and compliance is inconceivable.  Or is it?  I would argue that “International Law” and enforcement already exist.  Although “International Law” is in its infancy, those who recognize it will have a significant advantage in the global economy.   Conversely, companies and countries that ignore “International Law” may pay dearly.

The recent 2007 Institute of Internal Auditors (IIA) international meeting in Amsterdam stimulated my ongoing interest in and theories about, global compliance, the global economy and international law.  I discussed the Society of Corporate Compliance and Ethics and its compliance certification program with people from over 30 countries (corporatecompliance.org.)  As I did, a fascinating picture of the global economy began to evolve.  There is an evolution taking place in the world that is as remarkable as it is subtle. 

The IIA is promulgating financial reporting standards which are helping the international business community comply with “international business expectations.”  Simultaneously, a worldwide set of rules, laws, and expectations are also evolving.  This is true even though there is no formal international law or international law enforcement.  The world is slowly developing a set of laws that every country could or should, follow.  

Some countries are being excluded from the global economy because they do act in ways the global economy cannot accept.  Piracy, bribery, food safety, privacy and contract compliance issues have caused the international community to shy away from doing business with some countries.  International companies are less willing to invest in countries that do not follow “International Law.”  International companies select partners they feel will treat them fairly and honor their agreements.

Many think that the evolution of international law is impossible.  “Who will enforce International Law?”  “Why will anyone comply with International Law?”  “Who will establish international laws?” The real question is:  Can “International Law” evolve without formal enforcement?  Frankly, I think it is not only inevitable, it is already here. 

There have always been expectations that the products one country buys from another country meet quality expectations.  There has always been an expectation that countries will produce safe products.   There are no formal international laws about safety (particularly in food products) but it is critical that the informal laws (or expectations) be understood and followed. The definition of compliance is meeting the expectations of others.  You don’t need a formal written law or formal law enforcement to suffer the consequences of non compliance with the expectations of others.  For “International Law” to exist, you simply need expectations and the economic consequences of non compliance (enforcement).  Enforcement will come in the form of decisions made by buyers, sellers, and investors.  Countries will suffer economically if they don’t comply with the minimum expectations of companies (and people) in other countries. 

Many countries have already changed dramatically because they want to be successful economically.  They are voluntarily following “International Law” because they do not want to be excluded.  Compliance with “International Law” is occurring in areas such as piracy, bribery, food safety, privacy, and contractual agreement compliance. 

They are complying with “regulations and laws” that are not written or formally enforced.  It is fascinating. Why would a country cut off their ability to sell their products and services to other countries or scare away investors?  The reason that they are taking bribes, not honoring contracts, or committing piracy, is to make more money.  If a business is excluded from the global economy, it will suffer financially.  As more countries see that complying with “International Law” is financially lucrative, they will change.  They have changed.

Money, power, and influence are reduced in countries that do not comply.  Compliance with “International Law” is important even though one could argue it does not exist and is not enforceable.   As with many things, some will see it sooner than others.  Countries and companies that acknowledge “international Law” and implement compliance programs will be more successful.  With a common set of rules, expectations, consequences and compliance programs, the global economy will function more effectively.  We will all benefit from progress in the evolution of “International Law” and compliance with those laws.