Can
privatisation of basic services, trade liberalisation and withdrawal
of state be reconciled with state obligation towards protection of
socio-economic rights and social justice? How are socio-economic
rights implicated by the prevalent economic model of market
integration and promotion of international trade and investment? Two
recently published papers reflect on this intractable question.
Yoav
Dotan's, Informal Privatization and Distributive Justice in
Israeli Administrative Law, 36 Hamline Law Review 27 (2013) looks
at the normative models used by the Israeli Supreme Court in
addressing the distributional impact of privatisation of services in
that country.
According
to Dotan, recent privatisation of public utilities in Israel has been
paralleled by increased recognition of socio-economic rights as part
of he enumerated civil political rights in the Basic Laws. Yet the
development of an activist doctrine of fundamental rights in the
socio-economic field has failed to serve as a constraint against the
distributive consequences of privatization.
Dotan
explains:
“This
is because the idea of fundamental socio-legal rights does not
require full distributive equality with regard to relevant social
goods (such as healthcare, housing, or education). It only provides
for some minimal (constitutional) level of service that the state
must supply to every member of society. The problem is, of course,
that when one deals with the distributive outcomes of privatization,
the doctrine does not constrain the process but rather approves its
very essence and outcomes. This is because the starting point of
privatization is complete equality in the provision of the service,
and its end result is the creation of a free market that serves most
people, with some minimal assurance of (an inferior) public level of
services to the poor. Thus, the socio-legal rights doctrine is
conducive to the outcomes of privatization because it only takes care
of the minimal (welfare) level, while completely neglecting the
overall impact of the process... When the Court encountered arguments
against the distributive impact of privatization, it was always
willing to accept the infringement of socio-economic equality if the
government ensured some “basic,” “minimal” level of public
service.”
Sharmila
Murthy looks at the relation between privatisation and socio-econimic
rights in the context of right to water and sanitation in her paper,
The Human Right Water and Sanitation: History, Meaning and the
Controversy Over Privatisation, 31 Berkeley Journal of
International Law 89 (2013).
She
avers that framing of water and sanitation as a human right is a
response to global regulatory emphasis on efficiency and
sustainability and has been a rallying call for anti-privatization
movements. However, according to Murthy, “from the standpoint of
international law, the human right to water and sanitation is not
incompatible with private sector participation or with market-based
approaches.“
Yet,
she acknowledges that real tensions do exist between privatisation
and the right to water.
“The
challenges of operating an urban water and wastewater system
complicate private sector involvement in the delivery of services.
The large amount of infrastructure required means that network
provision of water is a natural monopoly that is expensive to
maintain and upgrade. Moreover, in recent years, there has been a
stronger emphasis on full cost-recovery and “ring-fencing”
services, which reduces the ability to cross-subsidize across
different municipal sectors. While the human right to water and
sanitation does not require that services be free, they do need to be
affordable and no one should be denied services for inability to pay.
This is a difficult goal to reach and requires that states critically
assess their tariff structures.”
Most
importantly, she argues on the basis of case studies from around the
world that:
“The
involvement of the private sector in the delivery of water and
wastewater services will not necessarily lead to efficiency. Case
studies from around the world highlight that without proper
oversight, a private operator's drive to improve efficiency
indicators by reducing costs can have significant impacts on water
quality and consistent service delivery. Moreover, there are
significant transaction costs associated with outsourcing to the
private sector that need to be accounted for when considering
proposed efficiency gains. Regulation and monitoring both play a key
role in mitigating the tensions between market-based approaches and
rights. Yet such oversight also requires strong institutional
capacity, without which states are more likely to enter into private
arrangements on unequal footing, resulting in terms that are not in
the best interests of the public. Another challenge of engaging in
private sector water contracts is that the international forums
available for addressing such disputes are not transparent and may
not provide a vehicle for addressing the concerns of individuals and
communities who may seek to raise human rights concerns.”
It
must be noted in this context that the U.N. Committee on Economic and
Social Rights had asserted, in its General Comment No. 3 [GeneralComment No. 3: The Nature of States Parties' Obligations (Art. 2,Para. 1, of the Covenant),14 December 1990, E/1991/23 ]:
“...the
undertaking “to take steps ... by all appropriate means including
particularly the adoption of legislative measures” neither requires
nor precludes any particular form of government or economic system
being used as the vehicle for the steps in question, provided only
that it is democratic and that all human rights are thereby
respected. Thus, in terms of political and economic systems the
Covenant is neutral and its principles cannot accurately be described
as being predicated exclusively upon the need for, or the
desirability of a socialist or a capitalist system, or a mixed,
centrally planned, or laissez-faire economy, or upon any other
particular approach. In this regard, the Committee reaffirms that the
rights recognized in the Covenant are susceptible of realization
within the context of a wide variety of economic and political
systems, provided only that the interdependence and indivisibility of
the two sets of human rights, as affirmed inter alia in the preamble
to the Covenant, is recognized and reflected in the system in
question.”
Therefore,
it would indeed be very difficult to claim that privatisation and
economic liberalisation are inherently incompatible with the state
obligation to protect socio-economic rights. The impact of
privatisation policies at a programmatic level and their conformity
to rights obligation is another matter though.
This
however takes us to Kerry Ritich's warning that social rights are
product of a time and place specific consensus. It
was underpinned at a theoretic and a political level by the
widespread acceptance of Keynesian economic arguments and models and
by the consensus borne out of 1930s that entitlements to economic
security and inclusion were of interest not just to those who
directly benefited from them, but were instead a broad social and
political concern. Therefore, it is probable that as political
conditions and dominant economic norms have changed, historically
contingent meaning of social rights may also undergo transformation
in consonance with neo-liberal economic models.
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