Thursday, July 14, 2016

Is Paying Tax Part of the Social License to Operate?

By Hugh Breakey and Charles Sampford.

Much of the debate about Base Erosion and Profit-Shifting (BEPS) and global tax minimisation focuses on the current legal requirements to pay tax and amendments to ensure liability and responsibility to pay tax. But this is not, first and foremost, a legal issue. Even if the legal/illegal, avoidance/evasion dichotomies were clear-cut, public outrage is applied to both. Indeed, clever planning may make the actions that some call tax avoidance, tax minimisation or tax planning seem worse for the obvious premeditation, while the complex legal arguments claiming that the assault on the public purse is legal may merely extend the outrage to lawyers rather than excuse the clients.

The failure to pay tax is first and foremost a moral complaint about the corporations and their attitudes to the communities in which they operate and which grant them a legal presence. One might, therefore, suppose a concern for fair tax obligations would be well-represented in the discussions and formulations of corporate social responsibility (CSR). CSR speaks directly of moral principles requiring businesses to do more than obey the strict letter of the law (and, indeed, ‘beyond the bottom line’).

Yet, if one turns to the major codes, charters, compacts and guidelines for best business practice and CSR, a striking fact presents itself. Most of these important documents say nothing – literally nothing – about tax avoidance, minimisation or planning. This is despite the fact that, as Christensen and Murphy (2004) observe: “Paying taxes is perhaps the most fundamental way in which private and corporate citizens engage with broader society.”

The codes of conduct for corporations that fail to mention fair tax obligations include pre-eminent and otherwise-demanding charters like the Caux Round Table Principles, the UN Global Compact (as well as its Principles for Responsible Investment), The Earth Charter, the Guiding Principles of the World Forum for Ethics in Business, the UN OHCHR’s Guiding Principles on Business and Human Rights, Amnesty International’s Human Rights Principles for Companies, and the Equator Principles.

To be sure, some of these codes have particular agendas (such as an environmental focus) that might serve to push fair tax obligations onto the back-burner. Even so, the fact remains that explicit fair tax obligations are so rare in the CSR space that the International Standards Organization’s (ISO, 2010) analyses of both sectoral and cross-sectoral initiatives fail to even list such obligations as a potential CSR element in their taxonomies.

If we want corporations to start living up to their tax obligations, then this widespread silence needs to change. Almost all the above-mentioned codes contain principles that are relevant to, or can be interpreted to apply to, tax obligations. For example, the Caux Roundtable Principles include the broader community in a business’s stakeholders, and stress that responsible businesses must live up to the spirit and intent behind the law. Equally, the International Bar Association showed how strong tax obligations follow from the OHCHR’s Guiding Principles, at least in the context of multinational’s tax obligations to developing countries.

However, potential interpretation and glancing treatment of such obligations in other codes (such as in the ISO’s Guidance on Social Responsibility and in the Triple Bottom Line Approach) – are not enough. In an area that involves a corporation directly shouldering significant costs impacting on its bottom line, society needs to lay down clear and unequivocal commitments. The tax-related responsibilities following from general principles needs to be explicitly highlighted to any corporations who aims to comply with them.

All of these codes provide aspirations to good corporate citizenship: but few make a point of saying that good corporate citizens pay their share of tax as part of their ‘corporate social responsibility’ or ‘social license to operate’.

We see the ‘social license to operate’ as just one of several expressions of the responsibilities of business ‘above the bottom line’. However, this concept enjoys currency in debates about CSR across sectors, ranging from extractive industries to banking to the professions. It also puts the CSR arguments more simply and strongly.

The ‘social license to operate’ acknowledges that a corporation can only exist within a community if it is legally recognised by that community or its sovereign representatives. Likewise it can only have property if that possession is recognised by the community (which also provides some protection for that property). Some forms of property, especially intellectual property, only exists within a territory because of the operation of that territory’s property laws.

The ‘social license to operate’ recognises that corporations enjoy a number of privileges – from limited liability to some very special privileges granted to particular industries or companies such as the exploitation of mineral resources and the lender of last resort to banks. The society also provides access to its consumers, which are the cashflow, or lifeblood, for the likes of Google, Apple and Starbucks. More generally, companies are entrusted with the bulk of the economy. Finally, all organisations involve a combination of power, people and resources to secure a range of ends. That power can be used to further those ends but it is always subject to capture and those powers being used (abused) against the community in which it operates.  The American founding fathers recognised the risks with governments. They were not aware of the risks of joint stock companies which were smaller and less numerous than those of our time (though their Glaswegian contemporary, Adam Smith, did recognise the risks and warned against them).

Communities do not provide all of the above benefits (let alone take the above risks) for the good of corporations. They do it for the benefit flowing from the latter’s incorporation. This is not to deny that corporations should seek profits. However, companies are expected to do so in ways that benefit the community rather than damage it. The social license to operate suggests that corporations need to justify themselves to the communities in which they operate on the basis of the benefits they deliver – and commit themselves to delivering them rather than paying lip service to the ideal.

The ‘social license to operate’ is analogous to the ‘social contract’ approach to government legitimacy (but far more practical to implement because limited liability joint stock companies are the product of legislation which was passed on the basis of claimed benefits to the community and duties established and varied by legislation.

Of the various duties corporations might be expected to take on, the payment of tax would surely be one of the most prominent.

Two good starting points that are specific to taxes are the principles offered by Tax Justice Network’s Code of Conduct (Murphy 2007) and the OECD’s Guidelines for Multinational Enterprises (OECD, 2011). Both codes set down the fundamental responsibility of living up to the spirit and intentions of tax codes. They also take care to explicitly prohibit some of the more egregious tax-minimisation strategies, such as those surrounding transfer pricing and beneficial ownership.

Corporations that abuse their social license to operate by minimising, avoiding or evading tax are putting at risk the license given to all and secure a competitive advantage over companies that are unable or unwilling to avoid tax in the same way as others. It is in the interests of the latter to work with taxation authorities and civil society organisations to work through fair tax principles and incorporate them in updated CSR principles.

John Christensen, and Richard Murphy. "The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the Bottom Line." Development 47, no. 3 (2004): 37-44.

This article was first published at: Australian Tax Policy. (11 July 2016). The work profited from the spirited discussions at the Regional Ethics Forum, the Red Chamber, Queensland Parliament House, 27 May 2016.

Monday, May 16, 2016

The Paris Regime’s Global Stocktake, and the COP/APA Climate Equity Review Process

The dust has long settled from December’s Paris climate summit, which hammered out the first truly global deal to reduce emissions. But the negotiations ended with widespread acknowledgement that the deal needs significant strengthening if its overall goal of keeping warming well below 2℃ is to be met.
The Paris Agreement therefore requires countries to ramp up their efforts significantly over the coming years and decades.
That job arguably begins today, with the opening of an 11-day meeting in Bonn, Germany, featuring the first session of the Ad Hoc Working Group on the Paris Agreement (APA).
The APA functions rather like a much more modest version of the Paris conference. Parties to the Paris Agreement send delegations, and small groups can be tasked with resolving specific issues before reporting back to the larger group for decision-making.
Among the most important items on the meeting’s agenda is the Global Stocktake to assess overall progress towards fulfilling the Paris Agreement’s goals. This stocktake will kickstart the process of five-yearly reviews to strengthen the Paris Agreement, the first of which will happen in 2023.

A new approach

The Paris Agreement sets down a new model for confronting global warming. Unlike the Kyoto Protocol, which imposed emissions targets on each country in a “top-down” way, the Paris process allowed countries to pledge their own climate targets.
This approach has been credited for the Paris negotiations' success, in contrast with previous talks which descended into recriminations over the burden that each country should bear.
But one obvious weakness of the new model is that the countries' voluntary commitments will not deliver anything like the necessary emissions reductions to prevent dangerous warming.
The five-yearly review mechanism thus aims to ensure that nations ramp up their commitments in coming years.

The question of fairness

As the Paris regime’s core review mechanism, the Global Stocktake will consider many aspects of the parties’ collective progress. While it will focus mainly on practical and scientific issues, the Paris Agreement also requires it to assess the collective progress “in the light of equity”.
In international climate negotiations, “equity” refers to an array of moral principles developed by the parties since 1992. These principles flesh out ethical priorities, such as ensuring the sustainable development of poorer countries.
They also inform burden-sharing decisions – for example, requiring countries that are more able to fight climate change, or that bear greater historical responsibility for it, to shoulder more of the burden.
As such, those five short words – “in the light of equity” – are arguably the first ever attempt to formalise the idea of countries doing their fair share when considering their contribution to the global fight against climate change.

What will the meeting achieve?

It is too early to know exactly how the APA will implement its mandate. However, in order to cover equity appropriately, the stocktake will need to include an official consideration of how well each country’s climate efforts accord with the Paris goals and principles. This means considering two key questions:
  • Is each country doing what it promised?
  • Is it promising enough?
This is not what normally happens when parties discuss ethics and fairness. Because the climate negotiations have had no principled system of moral evaluation and deliberation, countries can make implausible and inconsistent ethical claims as they defend climate targets that were actually chosen on the basis of national self-interest.
In the ideal case, the stocktake will encourage countries' delegates to talk in a reasonable and structured way about the ethical principles that inform their national climate targets. It will hopefully prompt them to be clearer about what principles they think are important, and how those principles justify their contribution.
As well as encouraging laggards to lift their game, the stocktake could clarify the application of specific equity principles. This could lead to improved overall ambition, more fairness in burden-sharing, and a greater shared belief in the regime’s legitimacy. Indeed, the process leading up to the stocktake can itself realise important procedural values, such as inclusiveness, reciprocity and deliberation.
In time, the process may prove to be an essential part of a functioning Paris regime.

What could possibly go wrong?

Opening up an official space for moral appraisals offers perils as well as promises. We must bear in mind that the Kyoto model failed precisely because it proved impossible to get consensus on questions of burden-sharing. An equity-based review might just reignite these past disagreements.
Indeed, any appeal to ethics carries some risks. Sometimes it’s better to speak of collective risk reduction rather than taking an adversarial position of preaching, lecturing or blaming others.
Despite these dangers, the Paris model desperately needs a principled mechanism for reviewing national climate targets so as to scale up the overall level of ambition to what’s needed globally.
The task is not impossible. The drafting of the Universal Declaration of Human Rights shows that, with clear structures and strong leadership, constructive international moral deliberation is possible.
Crucially, the stocktake will not need to take a single authoritative position on what equity requires. It can still drive improved ambition even if it allows coutries substantial flexibility in how they understand and apply equity principles.
While 2023 may seem a long way off, if the APA wants to ensure a constructive process, it will need to start laying the groundwork soon. It can start engaging states on equity issues in small meetings at the upcoming annual climate summits, starting with this year’s talks in Marrakech, or more formally at the Facilitative Dialogue scheduled for 2018.
After all, any assessment of this type does its best work long before it happens. In signalling that an ethical reckoning is on the horizon, it can encourage countries to start seriously considering whether their current commitments are fair, and what they could do better.
[This blogpost was initially published in The Conversation. It is based on a workshop presentation: Hugh Breakey. “Five Short Words and a Moral Reckoning: The Paris Regime’s COP/APA Equity Review Process,” presented at: ‘From Commitment to Implementation: Carbon Integrity post Paris?’ New Delhi, India, 14 March 2016. Scholars or practitioners who would like a copy of this conference paper, which provides more detail on the above themes, are welcome to email me at:]

Thursday, December 10, 2015

It’s about the money stupid! Ethics101 at COP21

Hugh hanging out at COP21 with the great climate ethicist
Donald Brown (Widener Uni, Pennsylvania)
It is perhaps unsurprising news that most developed countries employ scant moral reasoning when devising their NDCs. (NDCs are the nationally determined contributions each country puts forward to respond to the threat of climate change.) Instead, evidence suggests that countries calculate what level of effort fits with their own economic self-interest. Sometimes they  temper this calculation with a reputational concern for remaining in-step with the NDCs of similarly-positioned countries.

But it is surprising news that in many countries, not only the media but also major non-government organizations (NGOs) seem incapable of systematically challenging their countries’ NDC on moral grounds. States are thus able to avoid responding to common-sense moral questions like ‘What if everyone followed the same policy we are employing?’ and ‘How would we feel about this policy if another state was imposing such risks upon us?’

Mitigation-centred thinking

One result of this dearth of basic ethical interrogation is that the moral dialogue in developed countries tends to focus on national mitigation efforts. Attention hones in on the percentage of economy-wide carbon reduction the country promises to achieve. (Alternatively, the country may report the actual tonnage of carbon they aim to remove from their overall emissions. This is usually a more informative metric.) The protocols of the global climate regime mirror this focus on mitigation.

But as soon as we consider the situation from a developing country perspective, it is easy to see that such efforts – important as they are – constitute only one part of the developed countries’ moral responsibilities. Another numerical figure is at least as important: the brute sum of cash that developed countries are willing to hand over each year in order to fund developing countries. Such funds can help developing countries to: (a) pursue their own low-carbon economic pathways, (b) put in place adaption measures to deal with the challenges raised by inevitable future warming, and (c) respond to climate-related humanitarian disasters, such as island states facing rising sea-levels.

These three issues make up the thorny question of finance at the heart of the Paris talks – the core question that will probably only be resolved in the final drawn-out-but-nevertheless-frantic moments of negotiation over the next few days. The question comes down to this: How much will developed countries assist developing countries in the form of mitigation efforts, adaptation, technology transfers and loss and damage?

Reasonable finance

It would be easy to write these claims off as opportunistic demands for massive transfers of cash from the global north to the global south. To be sure, it would be naïve to suppose some avaricious governments are not seized by the prospect of gleefully carving out their piece of (say) a $100-billion-per-annum pie.

Yet the grim moral reality for developed countries – and one that their citizenry must begin seriously appreciating – is that any fair moral outcome must include enormous financial assistance for developing countries. (To be clear, we are not speaking here of emissions-trading, where rich states pay for poor states to mitigate so that the rich states can continue emitting. The mitigation, adaptation and loss-and-damage finance questions remain quite independent of developed countries’ own mitigation responsibilities.) 

Of course, there is room for argument about what a fair division of burdens in confronting climate change challenges would look like. Some might prioritize historical responsibilities for previous emissions – perhaps going back to the dawn of the industrial revolution, or perhaps just from the time that the problem became widely recognized around 1990. Others would prefer to look forward, and to work from a principle where those possessing the greatest capacity to act shoulder the greatest burdens (as progressive tax systems work in most advanced economies). After all, it seems unconscionable to demand that the poorest of the poor should make sacrifices from their already meager economic prospects to deal with a problem to which they have not contributed.

The original text of the Framework Convention reflects both these concerns for historical responsibility and capacity.

Hugh at COP21 alongside lots of important and clever people.
Certainly, there can and should be robust debate about the status, nature and interpretation of these and other relevant moral principles. None of the above remarks should be seen as definitive. However, the reality remains that on almost any recognizable moral principles, developed countries should be doing vastly more than they are – not only in terms of their own emissions but also in assisting developing countries in their adaptation and mitigation efforts. The recent Civil Society Review of country’s NDCs graphically shows this. It allows readers to select from an array (an ‘equity band’) of moral principles, and to give those principles different interpretations and prioritizations. And it shows that even the edge of the equity band that is most favourable to developed countries imposes far greater financial burdens than any of them have yet acknowledged. (My country, Australia, scores woefully on even the most generous parameters available. See also the Climate Action Tracker’s report on Australia.)

Reasonable transparency and differentiation

All of this might give the impression that the developing countries are entirely on the side of the angels. But the moral arguments cut both ways. The G77+China group continues to insist that the dividing line between developed and developing countries was set by the Annexes of the 1992 Convention. But moral principles of responsibility and capacity must attend to the realities at any point in time – such as the realities of China’s enormous economic growth and ensuing carbon emissions over recent decades.  

So too, if developed countries are morally required to part with vast sums of money, then developing countries need to acknowledge that such funds come attached with powerful duties of accountability and transparency. As obligations for finance grow in significance for the Paris Agreement, so must responsibilities for governance.

Neither of these sets of duties – for developing and developed countries alike – will be easy for duty-bearers to stomach. But in the face of a challenge as great as climate change, the need for a moral perspective has never been greater.

Monday, August 3, 2015

The Goodes and Bads of Booing

Week in, week out, opposition fans have greeted Adam Goodes—superstar Sydney Swans footballer and strong advocate for Australia’s indigenous peoples—with a chorus of booing. Debate rages even within the AFL Commission around whether the booing is legitimate, or is done for racist reasons.

In the furor surrounding this controversy, social commentators and online pundits tend to argue past one another, brusquely dismissing the other side’s claims. However—as often in ethical issues—this story has two sides, each with something legitimate to say.

But—as often in ethical issues—this doesn’t mean a clear moral answer doesn’t emerge as to what to do now.

Legitimate booing
It’s often pointed out that some of the reasons fans give for booing Goodes seem weak. After all, if you consistently booed every opposition player who had ever played for a free kick, or who threw his weight around physically, your voice would be hoarse by quarter-time.

But these objections miss the point that, ordinarily, fans don’t need good reasons to boo opposition players. For example, playing at the Gabba in his landmark 400th game, Kangaroo Brent Harvey was jeered by the Brisbane crowd late in the game. Why? Probably simply in response to the raucous Kangaroos’ fans, who were cheering every time their milestone man touched the ball. Cheering, booing, chanting, clapping and trading jibes all happen spontaneously in the vocal, competitive, and often exciting environment that makes up a trip to the footy.

As well, some of the booing has an obvious enough origin: Goodes’ celebratory ‘war-dance’ during the AFL’s indigenous round, directed towards the opposition side’s supporters. It’s rare for AFL players to directly engage with opposition fans in any way, as it never fails to fire them up. (Players can also be sanctioned for deliberately offending opposition supporters.) An act like Goodes’ was bound to spark a raucous response. Some of the crowd might even have felt that responding with silence would be patronizing.

(Note that if Goodes had performed the dance at the game’s beginning, directing it towards the opposition team—like the New Zealand All Black’s haka – this justification would not apply. Just following this thought for a moment… Imagine if the AFL picked this up for the 2015 finals, and after the national anthem, perhaps any time both teams fielded Aboriginal players (which is usual), those players would then perform the dance in challenge to the opposition team. I predict the crowd’s cheering would drown out any forlorn boo-ers!)

In sum, defenders of the booing are correct that some of the booing stems from quite ordinary sources, innocent of any racial overtones.

Illegitimate booing
Yet the booing has continued well beyond its usual life-span—becoming more relentless as the months passed by. It became a ‘thing’: a widespread social phenomenon distracting from the game, rather than being a part of it.

As the action shifts from a sporadic occurrence to an ongoing phenomenon, the moral issues change. Individual booing now becomes part of a larger collective activity, with different consequences—such as potentially hounding a great player from the game.

So too, the passage of time allows the views of those affected to be known. Goodes himself has felt the need to take time out of the game (hopefully temporarily). Indigenous players, Goodes’ team-mates, and now the entire playing community through a recent team-captains’ statement have called for an end to the practice.

The specter of racism drives this widespread concern.

Undeniably, Australia has racists. Undeniably too, some of these racists like to go to football and racially vilify non-white players. This is why in 1993 Nicky Winmar had to famously take a stand against racist abuse, and why the AFL possesses, and routinely acts upon, its racial vilification policy. Some of these racists are bound to seize this opportunity, and use the cover of ordinary crowd booing to deliberately vilify Goodes.

In fact, we have good reason to believe some of the booing is unconsciously racist as well. It is a well-known psychological fact that (as Immanuel Kant once observed) we tend to present our actions – to ourselves as much as to others – in the best possible light. We find excuses and rationalizations for our uglier moments, trying to preserve our sense of personal moral decency. Since this holds true of all people, it remains true for football fans. We might not know which fans do this, but the uncomfortable truth remains that some are surely glossing over their unconscious racist sentiments with contrived excuses.

Since the ordinary reasons for booing tend to fade once the game finishes and the weeks pass, it seems plausible to conclude that these racial elements, conscious or unconscious, are substantial enough to fan the flames and drive the now widespread phenomenon.

Where does this leave us?
As a result, we have solid reason to believe a decent proportion of the booing is racist in nature. A significant portion of the crowd are racially vilifying Adam Goodes, and this vilification is (understandably) impacting upon him.

These facts change the action’s moral status.

Imagine you are a fan, and your reasons for previous booing have nothing to do with racism (you are an ‘equal opportunity’ knocker). The facts being what they are, you cannot now boo without facilitating racists vilifying Goodes. Perhaps worse, you yourself cannot be distinguished from such racists. An external observer—other people in the crowd, families, children, indigenous footballers, Goodes himself—know that there are racists vilifying him, and they cannot know that you aren’t one of them.

This, I think we can all agree, constitutes a decisive reason to stop the booing.

Ultimately, opposition supporters had reason to boo Goodes at various moments in the past, and they have every reason to be affronted by knee-jerk accusations of racism for their doing so. But the situation has now progressed to the point where there is compelling reason to stop.

(A first version of this blogpost was originally published by The Ethics Centre.)

Thursday, July 2, 2015

Understanding the Separation of Powers

Many ordinary folks, and sometimes even lawyers and political theorists, find the idea of the separation of powers confusing. People tend to be unsure what it actually entails – and those that know what it means can wonder why on earth we would want it.

This blogpost aims to offer a plain language explanation of the separation of powers and its attractions.
Anyone who tells you this book has any simple
doctrines in it has not read it!
(Readers interested in learning more will find more detailed exploration of these themes in: Breakey, H. (2014). Dividing to conquer: Employing the separation of powers to structure institutional inter-relations. Research in Ethical Issues in Organizations, 12, 29-58. Special offer!! During July 2015, courtesy of this article being a winner in Emerald’s ‘Outstanding Author Contribution in the 2015 Emerald Literati Network Awards for Excellence’, the article’s full-text can be downloaded free.)

The too-simple notion of the separation of powers

Many readers would be familiar with a simplistic notion of the separation of powers, sometimes called a ‘tripartite’ separation because it divides the institution of government into three distinct institutions based on their separate functions. On this footing, the separation of powers equates to a constitutional principle saying that: (a) different institutions peopled by different personnel, (b) should perform the separate tasks of government, and that there are, (c) three such tasks: rule making, rule judging, and rule enforcing (in technical terms: legislating, judging and executing).

Some writers trace this tripartite principle to Montesquieu’s (1748/1989) The Spirit of the Laws, and Montesquieu was certainly one of the first political theorists to consider the reasons why dividing a system of government along these lines might carry surprising benefits. But in Montesquieu’s work the principle turned out to be anything but simple. In fact, I doubt anyone attributing such a notion to Montesquieu has never even opened his insightful but complex work, riddled as it is with historical curiosities and delighting in happenstance political arrangements that produce unexpectedly good results. Whatever one might say about Montesquieu’s thought, it is anything but simple. (My copy of The Spirit of the Laws runs to a lazy 722 pages!)

On this tripartite principle, a good political system aims to have a legislature (e.g., parliament) to create laws, an executive to police those laws, and a judiciary to judge them. The system will also make sure that each institution keeps to its own devices – the executive and the judiciary aren’t allowed to dabble in law-making, and the parliament leaves the business of judging laws to the judiciary, and so on.

The problems with the simplistic tripartite notion

This notion of the separation of powers suffers from several problems. Perhaps the most obvious worry is that tripartite system, as described above, has never actually existed. All effective political systems actually possess myriad inter-connections between their institutions, allowing each institution to ‘interfere’ in certain ways with the other bodies’ workings.

Consider the notion of ‘checks and balances’. Checks and balances involve one institution being able, under certain conditions, to block or resist another institution’s activities. Such checks effectively scramble the very divisions created by (and apparently recommended by) the tripartite separation of powers. To allow the executive to veto legislation, or to allow the judiciary to strike down legislation through judicial review, amount to letting non-legislative powers interfere with the legislature’s business of creating new law.

Another problem bedeviling the tripartite notion is that it is hard to see why we would want it. Sometimes enthusiasts for the separation of powers speak as if the idea is to have three opposing institutions running the country in order to keep them busy jostling for power among themselves. But why (you might ask) is that meant to be a good idea? The thinking is that the internal jockeying for power will keep the institutions distracted from doing what people with political power normally do – namely, to enrich themselves by oppressing everyone else. They’re too busy dealing with the in-fighting to achieve the type of full-throttle exploitation and extortion that despots usually manage to achieve.

That’s the theory, anyway. And maybe there is something to it. But, if so, we’re going to take a lot of convincing. Creating internal divisions in an institution, after all, is not normally a good policy for ensuring that institution runs well. Usually the reverse is true.

How then should we understand the separation of powers?

A better way of thinking of the separation of powers is to see it as a grab-bag of clever strategies for structuring political institutions so as to stymie their capacity to behave badly. If we go back to the major political theorists developing the separation of powers – figures such as Montesquieu, Locke, Madison, Kant and Machiavelli – we do not find a clean tripartite division. We find a series of insights about how attending to the inter-relations between institutions can help ensure those institutions perform their intended roles.

Sometimes these strategies include creating sharp divisions between organizations, so as to make sure that specific tasks are performed by those best-suited to perform them, or to avoid an obvious conflict of interest.

More often, though, creating sharp divisions is not good policy. Instead, dividing the institutions is only half the story – the first half of the story. The real purpose of separating institutions is to create new inter-connections between them, or to share a larger task across them, in order to secure a better outcome.

In a nutshell, we separate only to re-connect.

One example: politically motivated arrests

Perhaps the single most powerful way a government can injure a citizen is by arbitrary arrest and prosecution, and perhaps its single most dangerous occurrence happens when such arrests are politically motivated, such as the arrest of opposition figures and dissidents.

Consider how the separation of powers quells such dangers. An individual judge cannot physically arrest a citizen and gather evidence against her—nor can the judge create a law targeting that citizen. For that the judge needs the police (a part of the executive). Equally though, the police can arrest the citizen, but cannot judge and punish her. For that they need the judge.

This means that the state can only deliberately target particular persons when the bodies conspire in their persecution, for then the police can make a fabricated arrest, sure in the knowledge that the judge will sentence their victim. So too, if the reigning faction in the legislature wants to imprison members of the opposition, then they must conspire with both the executive and the judiciary to do so.

Having separate institutions performing these roles does not prevent conspiracies from happening. Of course, members of the legislature can collude with members of the executive and the judiciary. But the real trick of the separation of powers is that it requires such a conspiracy to occur. Such nefarious schemes are much easier to manage when one small clique, in a single institution, controls all these levers of power. Conspiracies, on the other hand, are notoriously fraught enterprises when they begin to span over many different people at different institutions.

In such ways as these, the separation of powers doesn’t seek to make political repression and the abuse of power impossible. It just makes it much harder, and much riskier, than it would otherwise be. (This is why the first thing that despots like Hitler do when they come to power is to sweep aside such separations, and gather all the levers of power under their own direct control.)

Why does it work?

But why – you might ask – is it helpful to have multiple institutions with different roles in various processes? If it is sensible to distrust one institution acting alone, why shouldn’t we harbor the same distrust (twice the distrust!) for two institutions, each potentially abusing their power as they vote and veto?

Theorists like Montesquieu, Locke and Madison actually provide an array of sophisticated answers to such questions. I’ve summarized some of these into a little set of theorems:

In what we might call the ‘one good apple’ theorem, if we spread the performance of a given activity across multiple actors, then if just one actor in the chain acts in good faith (or if her self-interest tends to align with the public interest), then she can thwart all manner of evil enterprises.

On another approach, ‘the non-aligned interests’ theorem points out that even if various people want to abuse their power by enriching themselves and persecuting their enemies, if they are not part of the same group in the same institution, they probably will not share the same ideas on who should get rich and who should get persecuted. Because there is a separation between the groups, each has self-interested reason not to be complicit in the others’ schemes. Why should they help someone else get power and wealth? On this footing, the separation of powers takes advantage of the natural resistance of selfish people to do anything outside their narrow self-interest.

Next, the ‘aligned legitimate interests’ theorem points out that even completely self-interested agents will always have at least some interest in doing the jobs they are supposed to do. By effectively performing her role, an agent increases the legitimacy of her institution, and cements her own authority within it. Also, as a member herself of the general citizenry, the institutional agent benefits from the existence of social peace and liberty created by a functioning political regime. As such, if all the self-interested, biased ways of performing her role are vetoed by checking powers (in line with the non-aligned interests theorem above), then the agent is left only with her remaining non-partisan interest, which is to enhance her status and the status of her institution by actually performing her role well.

All proceeding according to plan, the separation of powers might therefore pull off a quite remarkable feat: through its strategic separations and re-connections, it might entice a myriad of mostly self-interested actors to act in the public interest.


Summing up, the separation of powers (as we find it in Montesquieu, Locke, Madison etc) gathers together a host of insights for structuring institutions so as to make those institutions more likely to be productive and honest. It is based on a realistic assessment of human nature, accepting that bad people will sometimes get into power, and that power will sometimes tempt good people to do bad things.

Separating supreme political power across institutions does not stop bad people getting into power. But, in drawing on an array of insights about human nature, the separation of powers makes it harder for bad people to do bad things. It is for this reason that so many early Enlightenment political theorists seized upon the separation of powers as a weapon against despotic and absolutist governments. Faced with supreme monarchies, the Enlightenment philosophers realized the wisdom of dividing and conquering. They aimed to separate the powers, but only in order to reconnect them in subtle and ingenious ways – ways that tended to make corruption, despotism and the abuse of power harder and riskier.

(In this blogpost I have expressed all these insights in a very summary fashion, and of course more argument and defence would be required to show how they can combine in fruitful ways, and the conditions under which they will tend to work. Again, for those interested in knowing more, the issues raised here are dealt with in detail in Hugh Breakey (2014). Dividing to conquer: Employing the separation of powers to structure institutional inter-relations. Research in Ethical Issues in Organizations, 12, 29-58). (During July 2015, the Article may be downloaded for free.))

Saturday, May 23, 2015

Is Australia as bad as IS? Skewed criticism may leave you wondering

Perpetrator of crimes against humanity, ethnic cleansing and cultural genocide. Documented serial violator of international law and the most fundamental human rights. Complicit in territorial aggression.

All these accusations, and countless more like them, have recently been made by mainstream commentators, respected academics and official international figures.

Of whom do they speak? Australia, of course.

But does such insistent, brutal critique create a misleading picture of actual moral performance?

Relentless, powerful criticism

Many readers will be familiar with these accusations. Australia’s treatment of asylum seekers attracts well-publicised accusations of crimes against humanity and prompts serial reports of its serious breaches of human rights. Australia has recently been accused of racist and discriminatory acts of cultural genocideethnic cleansing and “acts of war” for proposals to remove basic services to its remote indigenous communities. Australia’s (lack of) action on climate change allegedly amounts to crimes against humanity and its involvement in Middle East conflicts is tantamount to the crime of aggression.

Image result for australian flag pics

A country to be proud of? 
Meanwhile, major human rights reports highlight a “grim outlook” for Australia.

It is little wonder that respected international figures should thus mention Australia in the same breath as brutal regimes like Islamic State (IS), Syria and North Korea.

Actual moral performance

With all this in mind, you might be surprised where Australia sits in global human rights rankings. Australia consistently places in the very top echelon of such rankings, as seen herehere and here. Equally, it is a strong performer on governance valuesdemocracy indexes and combined measures of happiness.

Why do such comparative measures matter? After all, what possible solace can it be to someone suffering from violations of their rights to recognize that other places are even worse?

Yet comparative measures are important. They can remind us that key parts of our system are working, and therefore that reforms must not throw the baby out with the bathwater. They can underscore that other alternative forms of government may risk a step backwards more than a move forward.

More generally, when we see how much every state struggles with protecting rights, we begin to conceive what a powerful moral challenge we have set for ourselves. In 1748 Montesquieu could observe that, despite ordinary people’s love of liberty, and hatred of violence, most peoples in the world lived subject to despotism. His words still ring true today. Constructing political systems, run by fallible, diverse human beings, that reliably protect rights is notoriously hard to do.

It is true that none of this will (or should) impress any single person or group actually getting their rights violated. Calling attention to specific rights-violations and demanding targeted reforms remains as important a task in a country like Australia as in Syria.

But as well as focusing on discrete issues that are going wrong, sometimes we all need to make over-arching judgments about whether the state warrants our support and allegiance. When faced with things that are going badly wrong, we need to know whether we need reform or revolution. If our problems are systemic, then we probably need the latter. And when faced with opportunities (such as sending Australian troops as peacekeepers to Timor-Leste, or securing a seat for Australia on the Security Council) we need to be able to judge the likelihood that our state actors will behave well, or whether they will abuse their power. Both these sorts of issues require over-arching appraisals of how the general system is working.

(Of course, we should equally pay attention to comparative measures when they give us less happy news. Comparative measures can alert us to ways that other countries have made improvements or resisted changes that have led to their better performance (e.g., in their treatment of refugees and indigenous peoples).

What explains this gap between the critiques and Australia’s actual rankings?

As I have already stressed, one can be comparatively a top performer and still be plagued with serious problems, including serious rights violations.

But instead of using language appropriate to talking about serious problems, commentators routinely invoke notions of horrifying criminality. Through talk of genocide and atrocity, commentators often fail to distinguish between, on the one hand, savage slaughter and full-throttle repression and, on the other, rash, botched, insensitive, unilateral, penny-pinching, ham-fisted or politicised responses to genuinely tough ethical questions.

I must stress that to say that X is not Y, where Y is horrifyingly bad, is not to say that X is good, acceptable, or even legal. Nor is it to say that we do not need to urgently change our involvement in X. X may be bad and we may need to do everything we can to prevent it. But the distinction between the wrongs of X and horrors of Y may still be important. For too often acts of horrifying evil do happen in our world, and our responses to such evils cannot be the same as the way we respond to more everyday failings. We need to preserve a language that expresses the urgency and consensus appropriate in the face of acts of genocidal evil and intolerant slaughter.

But the problem of hyperbolic assertions in discrete cases is only half the issue. Even when the problems are described in appropriately measured tones, the debate can still be skewed towards criticism. Political discourse, media and activism all tend to focus on crisis, sensation and scandal.

Even academia is not immune. Social “critique” rightly bears a special place in academic life, but can direct attention towards what is going wrong, rather than what is going right.

Some of these practices – for example, politicians’ confected outrage – are lamentable. Other practices, such as academics and independent bodies speaking truth to power, are vital. Nevertheless, these many different phenomena combine to paint a misleadingly depressing picture of the country’s moral landscape.

Aren’t there benefits to this negative focus?

Even if the picture is skewed towards critique, real benefits arise. A negative slant can head off the natural tendency towards romanticizing one’s own community. Such a tendency can tempt us towards ugly nationalism or delusions about inherent cultural superiority.

Having high local expectations can also help secure important reforms and prevent complacency. For example, by congratulating ourselves on our high global rankings, Australians might spurn the call for new human rights legislation — even though this might be a powerful method for responding to the serious problems we do face.

But at what cost?

Hyperbole can undercut support for important causes when objective, balanced argument would work better.

Rather than changing their behaviour, people might switch off from critique. They might see the United Nations and human rights itself as nothing but unrelenting sources of shame and rebuke.

So, too, other countries can easily brush aside Australia’s entreaties to respect rights and international law. Who are we to preach to others — like Russia or Indonesia — if our own brand is irreparably tainted (as Iran recently queried)?

But perhaps the most serious ramifications of this cultural phenomenon lie in the potentially corrosive effect on ordinary people’s moral character.

Like every society, Australia needs to encourage reasonable allegiance and commitment to its social and political processes. We are all shocked when young people choose to betray Australia’s values by joining a genocidal regime like IS. Yet our own “public relations” efforts showcase our flaws, not our successes.

If people give up on the society around them, then they can tend to excuse their own moral failings and self-righteously disconnect from political life. Why play fair if the system is corrupt?

Finally, while it can feel good to scold wrongdoers, encouragement often works better for achieving results (and if we really care about human rights, isn't that what really matters?). As Thomas Merton once said: “In the long run, no one can show another the error that is within him, unless the other is convinced that his critic first sees and loves the good that is within him.” If Merton is right – and nothing I have ever seen in my many years of debating morality with others suggests he is wrong – then moral outrage and a relentless focus on what is going wrong are utterly unhelpful ways of convincing people to do better. A much better policy involves stressing how much people are doing right, and how noble and tolerant many of their values and actions are, and then moving to consider whether the current problem-areas can be improved to the same standard.

Indeed, convictions about the high standards of one’s institution or community can themselves motivate a ruthless and energetic stance toward ridding that institution of wrongful behaviours or elements. Australia’s Army Chief, Lieutenant General David Morrison, now-famous speech on sexism in the Australian Army provides a striking illustration. 

Summing up

In the current environment, Australians would struggle to feel any kind of “cultural ownership” of human rights. This is a real shame. From the most inauspicious beginnings, Australians have built their country into an extraordinary, albeit uneven, human rights success story.

They should be inspired to go on living up to their status as one of the leading protector of human rights worldwide.

(A shorted version of this article was previously published at The Conversation.)