THE GLOBALISATION OF US CORPORATE LAW AND POLICIES
THE GLOBALISATION OF US CORPORATE
LAW AND POLICIES
This article raises an alarm about the expanding hegemony of big business promoted by the US and transnational corporations. The global reach of American jurisdiction is being used to exact heavy financial and legal penalties on foreign nations and companies and promote US interests in the name of economic globalisation, as part of the agenda for fighting corruption and terrorism. The article highlights the threats to national sovereignty, cultural diversity and economic autonomy posed by the ruling US centric financial system.
For most societies around the world, both civil and commercial laws are based on the sovereignty of the nation and their legitimacy proceeds more or less directly from the people’s will. The laws are enforced via formal institutions, jurisdictions and legal systems as well as informal institutions such as churches, local communities, religious bodies and in many cases by the extended family. Laws have their roots deep in society and are enforced more by the community than by any formal institution, even the police or judiciary. Laws differ across national boundaries and borders preserve the diversity of human societies. As Montaigne stated four centuries ago, “a good border is the key to good neighbours” and separation leads to peace and not conflict. The British with their legal system of unwritten principles and tradition-based laws were uncomfortable with the hierarchical, formal and universalist legal system imposed by the European Union. Nations based on democratically validated legal systems are the product of the era of independent states that followed decolonisation.
Some legal systems are shaped by religious faith. For example, in countries ruled by Shariah law, the national will is a factor of minor importance in the face of the principles of the Holy Quran. Across empires, there were differences in laws based on the traditions and practices of local communities. For instance, in ancient and medieval India, Christian, Jewish and Muslim communities were allowed to follow their own legal systems with the only constraint being that they did not disturb public order or provoke the majority Hindu population. Evidence of this coordinated diversity is still visible in Goa. Similar principles ruled Ethiopia as well. The current Ethiopian constitution recognises the diversity of ethno-linguistic groups united in the country and grants them some legal autonomy. The United States of America (US) has a federal organisation and Washington cannot interfere in a local investigation by a state’s police.
In the wake of globalisation, an increasing number of companies, from small and medium enterprises to giant groups, have research centres, factories, commercial sales forces, as well as financial partners, shareholders and political commitments spread around the world. While some are active in a few countries, others are truly global, operating in dozens of different states with a wide range of activities from hiring and contracting to selling and managing in each of them. Many prefer to keep the legal system they are accustomed to, mainly the US system as they try to maximise profits and minimise costs—the capital game. For many the costs of navigating different legal frameworks, fiscal systems and jurisdictional practices are high and in some cases even unbearable. For instance, the common grounds for investigations by the US justice system against European carmakers are about adherence to strict norms of pollutant emissions, intended to protect the US car market from cheap and effective diesel powered engines from Europe and Asia. The cost of choosing to cheat and not comply by carmakers has been very high. When European and Asian carmakers come under fire, it is good news for American automobile manufacturers that have been losing market share with their old fashioned, gas-guzzling engines powered by regular petrol.