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The Rule of Law

The Rule of Law

"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

Cambodia.

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

Cambodia

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 &

Investment.

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

competition.

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

business decision.

Defining the Rule of Law.

For the

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.

Similarly,

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

A fully

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.

The most

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

laws.

Attributes of the Rule of Law

Laws establishing the Rule of Law

will have the following:

  1. 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.

  2. Consistency. The law is applied consistently to all. Favoritism is not a

    part of the Rule of Law.

  3. Accountability. Those responsible for applying the procedures are

    accountable for deviations from those procedures.

  4. Comprehensive. The Rule of Law cannot exist without the creation of a

    comprehensive system of laws.

  5. Implementation. Laws that are not implemented serve no purpose and cannot

    create the Rule of Law.

  6. Enforcement. The law is enforceable and enforced against violators.
  7. 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.

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