"The Rule of Law." A phrase for the times (some would say trendy).A phrase
tossed casually about in development circles, rolling off the tongues of
advisers and experts.
"The Rule of Law," like "Sustainable Growth"
"Transitional Economies" and "Privatization," is a word-picture, representing a
thousand other words, books, studies, papers and conferences. A phrase full of
meaning, yet not easily defined.
This is the first in a series of columns
dealing with legal developments in Cambodia, and Cambodian legal personages.
This column, however, is intended to be much more than merely an
informational piece describing changes to Cambodia's investment system. The
centerpiece of this column will be the establishment of the Rule of Law in
This column will approach the Rule of Law from the point of
view of a business law practitioner. It will discuss new legislation and
regulations affecting the establishment and operation of a business in Cambodia,
with a pragmatic eye on the establishment and promotion of the Rule of Law in
The Rule of Law is by no means a new issue in Cambodia, and this
writer is certainly not the first person to highlight its importance. Many
experts and officials, including the First and Second Prime Ministers, have
emphasized the establishment of the rule of law as one of the most important
issues facing modern day Cambodia.
The Rule of Law &
The Rule of Law is the single most important issue daily
confronting investors. It is the essential factor for the consistent attraction
of long term investment in any developing country. The Rule of Law is so
necessary to investment because it removes much of the political and legal risk
from the investment equation. It creates a more level playing field for business
Even if the substantive provisions of the law treat certain
investors more favorably than others, in a system under the Rule of Law, each
investor may rely on a predictable and transparent legal framework to make a
Defining the Rule of Law.
purposes of this column, it is important to clarify what the Rule of Law means,
and more importantly, what it doesn't mean.
- Not Human Rights.
The Rule of Law and Human Rights are
not synonymous. A country can obey the Rule of Law without respecting human
rights. Governments which ignore human rights may still implement a system where
the Rule of Law, albeit unjust and abusive law, reins supreme.
the creation of a legal system based on the Rule of Law does not necessarily
mean the creation of a substantively just and equitable legal system.
- Not Democracy
True democracy cannot exist without the
Rule of Law, but the Rule of Law can exist without democracy. Both totalitarian
regimes and democracies may adhere to the Rule of Law. The difference is that in
a democracy, the people, directly or indirectly, have the power to affect and
alter the scope and substance of the Rule of Law. In a totalitarian regime, only
the dictator has this right.
The Market Economy
functioning and efficient market economy cannot exist without the Rule of Law.
However, the existence of the Rule of Law does not, by itself, create a market
economy. Good examples of this are the centrally planned economies of the former
communist block, where regulatory systems were well developed.
The three faces of the Rule of Law
The three functional parts
of the Rule of Law are procedure, substance and institutions.
important of the three is procedure. Procedure lays the groundwork for the fair,
transparent and consistent application of the substantive law. It supplies the
predictability so sought after by investors.
A close second are
government institutions that effectively implement the procedural rules and the
substantive laws. Weak procedures or institutions will make creation of the Rule
of Law an impossibility.
Least important are the substantive norms
governing society, which vary widely even among countries under the Rule of Law.
Substantive laws are more important to the Rule of Law than the content of those
Attributes of the Rule of Law
Laws establishing the Rule of Law
will have the following:
- Transparency. Detailed information on the substantive law, procedural rules,
and institutional structures is freely and easily available to all those
affected by them. The rationale behind decisions related to the law is made
known to those affected by such decisions.
- Consistency. The law is applied consistently to all. Favoritism is not a
part of the Rule of Law.
- Accountability. Those responsible for applying the procedures are
accountable for deviations from those procedures.
- Comprehensive. The Rule of Law cannot exist without the creation of a
comprehensive system of laws.
- Implementation. Laws that are not implemented serve no purpose and cannot
create the Rule of Law.
- Enforcement. The law is enforceable and enforced against violators.
- The Human Factor
The Rule of Law cannot exist without concerned individuals dedicated to its
cause. The Rule of Law is but an abstract, intellectual notion. It is given
vitality only through the actions of legislators, judges, administrators,
bureaucrats, magistrates, and other legal professionals. In light of the
enormous importance of the human factor in creating the Rule of Law, this column
will regularly profile Cambodia's legal professionals.
- David Doran is
the resident Director in the Phnom Penh office of Dirksen Flipse Doran & Le
(DFDL). He has been working in and out of Cambodia-and writing on Cambodian
legal issues-since 1992.