Issues & Overview Getting Serious About The Rule Of Law - A Predicate For Global Economic Development

In early November, the American Bar Association convened an extraordinary gathering of more than 400 in Washington, DC. Other corporate leaders and I joined global leaders such as Secretary of State Condoleezza Rice, three U.S. Supreme Court Justices, dozens of justice ministers and judges from countries in every region of the world, and Senators Hillary Clinton and Lindsey Graham to discuss the critical need for promoting the rule of law globally. As was recognized at the gathering, the rule of law is critical in the battles against terrorism, corruption, poverty, and health pandemics.

The symposium also focused on the potential role that the business community can play in making the rule of law a reality by committing more resources to it - especially in developing markets. Panelists - including the general counsels of General Motors and ABB and the former general counsels of Microsoft and Pepsi - specifically addressed the role of the private sector in these efforts.

Advancing the rule of law - that is, a system of transparent, predictable, understandable, and fair rules and institutions that facilitates efficient and just societies - is an important goal, in and of itself. But the stakes for global businesses are especially enormous.

For investment to be encouraged, and economies to develop, nations need to have laws which regulate society, laws that encompass the rights and protection of persons and property that are predictably and consistently promulgated, and laws that are enforceable through trustworthy, competent dispute resolution processes.

We all know the corrosive effects where rule of law is weak. When corruption infects governmental decision-making, or political cronyism predetermines the adjudication of specific disputes, business' ability to protect investments and to compete is imperiled. To the extent the absence of respected legal systems contributes to governmental instability, civil unrest, or even terrorism, companies are loathe to locate operations in such countries - not only to protect their assets, but more fundamentally to protect their employees. Business seeks to operate in countries with peaceful and stable environments. The rule of law is the primary feature of such nations.

Certainly, it is in the interests of shareholders and employees for companies to join the rule of law movement because the rule of law protects investment, encourages economic development, and levels the competitive playing field.

Many companies see the difficulty of developing governmental systems and combating corruption and terrorism as well beyond their individual means, capabilities, and business purpose. However, a single company's efforts can carry great weight. And, working collectively in any given country, the business community can have a great, positive influence on governmental policy and priority. Finally, the targeted efforts of international business groups can provide important and needed resources to a variety of organized legal initiatives and non-governmental organizations dedicated to the spread of the rule of law for the benefit of us all.

This recent gathering was just the beginning of a much larger effort that the ABA is encouraging, one in which organizations like the ABA's Central European and Eurasian Law Initiative, which I chair, will work to create far more synergy between all those interested in stronger global rule of law. We aim to create a movement that ties together organizations, regions, and interests to meet this enormously important goal. We invite you to learn more about this effort and view web casts of symposium speeches and panels by visiting

*Mr. Ide is a past president of the American Bar Association and former General Counsel of Monsanto Company.

Published January 1, 2006.