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July 20, 2015 — Maui, Hawaii
CEO, LexisNexis Legal & Professional
Thank you, General Wasden. It's truly a great honor to be with this distinguished group at the CWAG annual meeting.
Today, I'd like to talk about rule of law and the idea that key actors, including business, can make transformational economic and social change by advancing the rule of law.
This morning, I'll start with a definition of the rule of law. We'll take a look at how it's measured. I'll share some data around why it's so important. And then talk about what we can do together to advance the rule of law.
Let’s get started with a definition.
The United Nations defines it in this way, “The rule of law is a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards.”
There are many ideas included in this definition. There are also many other definitions of the rule of law from the American Bar Association, the World Justice Project, and a number of academics have offered their perspectives.
When you boil them all down, the components are largely similar. These may seem very basic for this audience, but when measuring something so complex, it's often helpful to break it into simple components.
First, all are equal under the law. All people, businesses and governments are accountable, and the law applies to everyone in the same way, no matter who you are. There's transparency of law. Laws must be clear, precise, affordable and accessible while protecting fundamental human rights. There must be an independent judiciary, ensuring equality and fairness. And lastly, there must be timely access to legal remedy, or access to resolution in a court of law.
The stronger each of these components are, the greater the rule of law.
I also think it's important to take a step back and look at this from another angle. There's a tendency to think of the rule of law as a theoretical or academic concept. But if you're one of the estimated four billion people that live outside the umbrella protection of the rule of law, it's not an abstract concept. Instead, the rule of law and the struggle for human rights becomes a matter of basic, daily survival.
To quote from the article, “And Justice for All” by Gary Haugen and Victor Boutros, “Most poor people do not live under the shelter of the law, instead they inhabit a world in which perpetrators of abuse and violence are unrestrained by the fear of punishment.”
This sentiment was beautifully expressed by the Honorable Ms. Mary Robinson, Former President of Ireland and United Nations Commissioner on Human Rights, when we presented her an award for her lifelong work in the rule of law.
She said, “The rule of law is at the heart, it's not a cold issue. It's an issue of security of the person, of the community, security against violence, and security to carry out the various ways in which people want to live together.”
Her words, in my mind, reflect where the theoretical meets real life.
The rule of law provides the foundation for how we live, the freedoms we have, and the degree of security that we enjoy.
So, let’s take a closer look at how the rule of law is measured and why it’s so important.
The most widely respected and comprehensive body of work on this topic is the World Justice Project Rule of Law Index.
The Index documents the degree to which countries adhere to the rule of law. It measures the rule of law using 44 indicators across eight categories including areas such as Absence of Corruption, Fundamental Rights, Civil Justice and Criminal Justice. More than 100,000 citizens and experts have been interviewed to determine country scores and rankings.
So far, 102 countries have been indexed. Each country is given a score between zero and 100, with 100 representing the highest score. This year, Denmark is the highest ranking country on the Index, with a score of 87. Venezuela is the lowest ranking country, with a score of 32.
From this data, we created a rule of law heat map for the world.
This map shows where rule of law is strongest (in bright red) across most advanced, industrialized nations, and where it's weakest (in yellow) in areas of South America, Africa, the Middle East, Russia, and Asia. Countries that are in-between (in orange). And countries not yet scored by the World Justice Project (in gray).
Rule of law tends to be associated with stronger economies. So, what is the relationship between the rule of law and economic development?
On this chart, we've plotted major countries in the world. Each one of these dots represents a country from the World Justice Project Rule of Law Index. Along the horizontal axis, we plotted countries based on their Rule of Law Index scores from zero to 99 points (out of 100). Along the vertical axis, we plotted countries based on their GDP per capita.
You can see a reasonably tight correlation. High rule of law is correlated with high GDP per capita. Low rule of law is correlated with low GDP per capita.
It means that there’s a reasonably strong relationship between GDP per capita and the rule of law.
Based on the statistical correlation, for every one point (out of 100) increase in the Rule of Law Index score, we can expect roughly a $1,000 increase in GDP per capita.
At the bottom of the curve, there are countries like Afghanistan, Cambodia, Zimbabwe and Pakistan. These are developing and poor nations, often facing civil conflict, unrest and instability. There are serious challenges with corruption, disease, terrorism and human-rights abuses.
In the upper section of the curve, where GDP per capita and rule of law are stronger, we see EU member states like Spain, France, UK, Germany and Sweden. You can also see Asia Pacific nations here like Japan, Singapore and Australia.
And here you can see the US and China. While China's growth rate has outperformed the US in the last decade, the US has a substantially stronger rule of law foundation that has sustained the country's success over a long-term horizon and that is reflected in a GDP per capita that is seven times greater than that of China.
One of the big, popular questions of the day for economists and business leaders is whether and how sustainable is China's growth trajectory? And will it be sustained over time such that China can take a meaningful step up in GDP per capita? I would submit that this question in no small part hinges on how China addresses rule of law over the coming decades.
Many academics agree. Niall Ferguson of Harvard has written, “China has achieved astonishing growth without good legal institutions and without much improvement in them…many scholars argue that if China does not now transition to the rule of law, there will be a low institutional ceiling limiting its future growth.”
Rule of law is not only correlated with economic prosperity and GDP per capita but also correlated with important social indicators.
For instance, there are lower child mortality rates in countries with higher rule of law scores. Homicide rates are lower in countries where rule of law is stronger. Levels of corruption drop in countries where rule of law is more developed. There's higher life expectancy in countries with higher rule of law.
Let's turn our attention to the US in particular. The US is not at the top of the rankings. If we dive a little deeper into World Justice Project scores there are findings some may find surprising.
The US is actually significantly behind many major industrialized nations in the rule of law.
In the most recent report, the US ranks number 18 among countries surveyed. And you can see there's a reasonable gap between the US and the rest of the pack at the top of the list. According to the World Justice Project survey, some of the US gaps include that civil legal assistance is often more expensive or less available than in the countries ranking higher. The survey found that due process of law is not as effective. The judicial system lags behind in providing equal treatment to minorities and disadvantaged groups. And lastly, according to the survey, the correctional system in the US is not as effective as others in reducing criminal behavior.
A range of academic work has also pointed to deficiencies and gaps in US rule of law, including work done by Francis Fukuyama of Stanford, Niall Ferguson of Harvard and Frank Upham of NYU Law School. In addition, a similar picture emerges from other data sets that rank the US versus other countries in areas related to rule of law, including the World Economic Forum's annual Global Competitiveness Index, Heritage Foundation's Freedom Index and the World Bank's indicators on World Governance.
All of this data together bears out what we may know instinctively. Without equality and accountability under the law, clear and transparent laws protecting human rights, an independent judiciary and access to timely legal remedy, economies have a hard time developing and the citizens of those nations suffer disproportionately.
So, why is the rule of law vitally important to business?
It's because it provides a legal foundation for conducting business in a reliable and predictable manner that any CEO looks for. It promotes economic investment by increasing the protection of property rights and security of contracts. It allows for the timely and predictable resolution of disputes, lowers levels of corruption and bribery, fosters the development of strong institutions central to good governance, and ensures the legal identity of individuals and organizations, providing the security for people to have jobs.
Let me give you one example from LexisNexis of how the rule of law is so vital for attracting investment in a country.
LexisNexis is a $2.3 billion company with 10,000 employees across the globe – that includes 2,000 lawyers. And we serve customers in 175 countries.
As part of our strategic planning process, we make decisions about where we allocate our investment based on the relative attractiveness of countries around the world for our business.
Strength of rule of law is a key factor that we look at in assessing overall business climate. This translates into decisions to invest more resources in a country like, say, India (ranked 58 on the Rule of Law Index) or Brazil (ranked 45), than we do in a country like Russia (ranked 74).
This is a LexisNexis example that demonstrates how we allocate investment based in part on rule of law but just about any global business would likely look at this in a similar fashion.
So given the importance of rule of law to society and business, what actions can we take to advance the rule of law? Governments, business and private citizens all have a role to play. Let me spend a few minutes on what actions business can take because business can be a powerful actor in this arena.
This morning, I'm pleased to introduce Business for the Rule of Law (B4ROL), an effort being led by the United Nations Global Compact. For those of you not familiar with the UN Global Compact, it's the world's largest corporate sustainability initiative.
This picture comes from a 2013 event we held in New York City, where we kicked-off the effort by presenting the Global Rule of Law Business Principles to UN Secretary-General, Ban Ki-moon.
During the event, the Secretary-General announced that we would join forces to develop a truly global approach for how the business community can advance the rule of law.
In order to shape and define the B4ROL Framework, the UN Global Compact convened leaders across the globe. In fact, Executive Director of CWAG, Karen White, attended a summit in Washington, DC that we hosted this past March.
The final B4ROL Framework was launched last month by the UN. It's a distillation of feedback from the many voices heard around the world and a guide for businesses to support and advance the rule of law.
The B4ROL Framework lays out five key ways that business can support the rule of law:
The important thing about the Framework is that it raises awareness about rule of law at the CEO and General Counsel level. It provides guidelines for how businesses can conduct themselves. It also provides a forum for businesses to demonstrate their commitment to advancing the rule of law and to share experiences.
I'd like to share a few examples from both business and government actors working on this important topic.
This first example demonstrates the power of using core business capabilities to solve serious challenges with birth registration in Uganda. While most of us probably take birth registration for granted, without it, people can't access basic services like healthcare and education, fundamental rights aren't protected, and it's not possible to be legally employed.
In this example, Uganda Telcom Limited partnered with UNICEF, and other government agencies, to develop an automated birth registration system that gathers information with mobile phones and web-based applications. This has resulted in births being documented in a timely and accurate manner.
Let me now share a few examples that LexisNexis has been involved in. Our company is built on the foundation of advancing the rule of law. Publishing laws and enabling access to justice is at our core. This is what we do as a commercial business each day.
Ultimately, we're working to bring the four billion people living outside the umbrella protection of the rule of law down to zero through our day-to-day business operations, products and services, and actions as a corporate citizen. We do this in partnership with customers in law firms, courts and governments.
For example, just last month we announced the launch of the EyeWitness to Atrocities App jointly with the International Bar Association. This is the first-ever mobile app for Android devices that will enable users to anonymously capture verifiable photo and video evidence of human rights abuses for use in court.
Together with the IBA, we believe that this technology tool will be transformational in the legal documentation of human rights atrocities and in the ability to prosecute crimes. There were more than 1,000 downloads of the app within the first week of release.
In another example, we've focused on improving human trafficking laws in the US. Together with the American Bar Association, Uniform Law Commission, Attorneys General, and law enforcement, we've worked to advocate for stronger human trafficking laws, tougher penalties for wrong-doers, and additional protections for trafficking victims.
According to Polaris Project, an NGO that fights human trafficking and ranks the effectiveness of US laws, together, we've made significant progress as you can see reflected in these pie charts. Now, 41 out of 50 state laws on human trafficking are ranked as "excellent." This is up from 11 states in 2011.
This next example highlights the work of one of our employees, Gaythri Raman. She's pictured here along with Aung San Suu Kyi, the Nobel laureate and humanitarian leader in Myanmar.
I'd like to show you a brief video on this topic. Gaythri embodies what's possible in the business world when you pursue advancing the rule of law.
Your CWAG group is engaged in exceptional rule of law work as well. Many of you are aware of work that Attorney General Lawrence Wasden is leading through the CWAG Alliance Partnership to bring together international Attorneys General to strengthen the rule of law across borders.
The Alliance's work with Mexico has provided training to thousands of law enforcement professionals, and is paving the way for prosecuting crimes across borders.
General Wasden recently said, “I truly believe that the Partnership has made life more difficult for criminals who opt to commit crimes on one side of the border and flee to the other side in hopes of avoiding consequences for their actions.”
Right here in our host state of Hawaii, Attorney General Doug Chin continues to make rule of law, ensuring accountability and reducing corruption and bribery, a key focus in his work. General Chin is one of the newest AGs, appointed in March of this year.
Just two months ago, his Department won a ruling that prohibits political contributions from contractors doing business with the state.
Florida Attorney General Pam Bondi has made combating human trafficking a top priority. She has worked to update Florida's laws, provided prosecutors with tools to put perpetrators behind bars, and conducted education and training to identify victims.
In March, General Bondi and members of law enforcement arrested 15 offenders running a complex human trafficking ring in Florida.
These are only a few examples of work being done to advance the rule of law.
But they are indicative of good work that can be done by both corporations and government to advance the interests of business and society.
I started my presentation today by looking at this map. Now that we have covered the importance of the rule of law, let's reflect on the impact that advancing the rule of law can have on the world.
Within this room of influential leaders, we have critical actors on the rule of law stage. You influence how rule of law is conducted in your state and work with powerful, global businesses that have reach across the world.
If, together, we can work to advance the rule of law and achieve even a 10% improvement in the Index across the globe over the next decade, we could accomplish the following:
GPD per capita would go up by more than $5,000 per person.
Crime would go down by more than 25%.
Child mortality rates would decline from 24 to 17 per 1,000, potentially saving millions of children's lives each year.
And average life expectancy would increase by almost five years.
I think that this is a future worth our focus. Collectively we should do something about this. Working together, I'm confident we can move the needle.
I urge each of you to heighten awareness about the rule of law and continue to advance your own rule of law journey.
Attorneys General can continue to take up the case, such as the strong leadership examples we've already seen. You can also bring the B4ROL Framework back to businesses in your state and encourage them to adopt it.
For the business community, I encourage you to get behind the UN Global Compact and B4ROL efforts.
You can find a copy of the B4ROL Framework on lexisnexis.com or I'd be happy to send one to you. I look forward to continuing this important dialogue with you, both here and afterwards.
Lastly, I wish to thank you for your attention here this morning.
VP, Head of Global Communications
LexisNexis Legal & Professional
+1 212 448 2137