An Interview with Professor John A. Burgess

 

Interviewer: Han Sung Lim

John A. Burgess is Professor of Practice and Executive Director of the LLM Program at the Fletcher School of Law and Diplomacy at Tufts.

 

Q. Can you provide a short background of yourself?

My background is a little bit different than most professors in that it wasn’t academic. I’m a professor of practice. I worked in a global law firm environment for decades doing work mostly on the private side, involving mergers, acquisitions, and investment. I had a chance to watch the evolution of the global economy, the rise in the EU, China, other Asian economies, as well as the continued role of the US, and how the global economy became interrelated. But when I came here, I got interested in international maritime law because part of the process of globalization is enabled by the oceans. World commerce is largely done on the sea. If the container hadn’t been invented, there could be no trade of the kind we see now with China. In turn, globalization puts a lot of pressures on the oceans. It creates a lot of environmental risks. It creates greater security competition and it is tied in with the impact of global warming / climate change / rising sea levels in the sea. So, it’s all interrelated.

Q. Did the rise in mergers and acquisitions, correlate with rise of trade on oceans as well?

Yes. It was all part of the same phenomenon. In the last forty years, the financial market has been more coupled worldwide, and at the same time commerce generally – I-phones and cars – has increased with mergers and acquisitions, the buying and selling of companies. One of the most dramatic things we see now is some check on all those trends, as certain governments react to globalization as they see part of it as a threat or something that is injurious to their citizens, whether that’s truthful or not. That’s obviously the development in the last few years.

Q. I’ve been to a panel discussion about the Yemen conflict, and it’s interesting to see that the Strait of Hormuz, is at the center of the Saudi Arabia, Irani, and Yemen conflict and also a reaction against globalization as well.

You see the see the straits used as a leverage in globalization. You know the Strait of Hormuz obviously controls critical commodities like petroleum and that creates different countries vying for control over just as, while it is not as controversial right now, the straits of Malacca are critically important to Asian economies. Vast volumes of trade goes through there, so that’s very true.

Q. And do you see a correlation between a certain ideology like liberalism, and a state’s openness with the sea?

Yes I do. That’s always been of interest, and I think it has had a long tradition. There are good and bad aspects of it, but historically, maritime nations like Great Britain, although watching out for itself, fostered an economy and political system favoring the entrepreneurship that comes with trade and mercantilism. It was very much part of the British ideology and most of the world that we live in today is a successor to those ideologies of free markets, the freedom to explore and exploit the freedom of exploration, not always to the benefit of those in a different part of the cycle. Part of the problem is, whether today, even in developed nations, there are constituencies who don’t see the benefits of them in the liberal world order.

Q. I think an example of a place that benefited from trade would be Boston itself, in the fishing industry.

That’s very true. When I was growing up, the territorial waters of the US only went out three miles. Other states could fish beyond those limits. There were increasing restrictions, but it was many years until there was a comprehensive restriction on foreign shipping, and nothing like the modern law of the sea that created the 200 mile Economic Zone. Local fishing communities were adversely affected. Particularly by Russian offshore fishing fleets which were very large and fished in waters that New England fishermen considered their own.They lacked the sophistication of gear, the size of ships, and scale of operations that would have let them compete effectively with the Russians, who were adversely affecting the fish population.

Q. And what’s interesting is that the fish population moves from place to place, and so my guess is that conflicts would be defined from time to time. Would that mean that international maritime law is very dynamic?

Yes, it is one of the big challenges in the law of the sea because historically under the true liberal order, everyone had the access to the ocean and everyone had access to your resources, when you were beyond the territorial sea, so a 299 miles EEZ was created,.. So, for example, the US, France, or Malaysia have adopted measures to conserve fish within their 200 mile zones. But fish don’t think about 200 mile zones. They swim and they move and they migrate. And one of the big challenges in a world where fishing fleets can go anywhere in mass numbers is to protect and conserve fish populations beyond 200 miles, and under international law the sea, no state has the right to regulate. And work is being done on that, but challenge to the fish population is a real issue. It’s part of the fun of international law of the sea right now, as the question is how do you protect fish beyond those 200 miles. A classic example is Tuna which roam the oceans. They don’t pay attention to boundaries and it affects their conservation.

Q. And it’s not only about fish, right? I learned that Dokdo, an island East of Korea, has bountiful reserves of underground mineral and methane resources.

Yeah. There’s competition for petroleum resources. I think one of things that will happen in your generation is increased competition for mineral resources underneath the ocean. Back when the law of the sea was created under one treaty, which now goes back to the 1980s and 1990s. People thought that ocean mining started right away. Who controls that, who benefits from it, how do you protect the oceanic environment from deep sea mining?. It’s going to be a big set of issues.

Q. It’s going to be hard to ascribe responsibility to one actor.

Yes, what’s interesting and what’s different about that compared to fish is that there is no current international regulation for fish conservation beyond 200 miles. Interestingly enough, under the law of the sea, there is for mining. It’s called ‘the Area’ and there is a body created by the UN that states and companies have to work through to mine. So there is someone involved. The problem is the US never adopted, ratified the treaty. So one of the largest economies doesn’t play by those rules.

Q. It is similar to how Bush didn’t ratify the Kyoto Protocol. Do you think there are business pressures preventing it from happening?

The business pressure heads in different directions. For instance, US companies with foreign subsidiaries work through those regulations that regulates the seabed. One thing I learned about my clients is that they didn’t like regulation that much. But what they fear most was uncertainty, because there was a risk that investments of hundreds and billions of dollars were lost. That’s what they were worried about. So actually, US mining companies will actually follow, through their non-US subsidiaries, the rules with deep sea mining, because otherwise what they would do would be open to challenge. It would look controversial. So they get certainty. Like I said, US companies would want high degree of freedom. I think they can live with international regimes if those regimes seem equitable (not singling the US out for unusually harsh treatment) and they are predictable. I could be wrong, but I hope that over time, political currents of nationalism change, and that international law becomes acceptable for the US, as a political body and also its economic components, including companies. We’ll see.

Q. And how would you divide these companies? There are a lot of stakeholders, from restaurants to shipping companies. 

In a globalized world it’s really complicated. Because even if states are nationalistic, how do you define an Exxon or a Unilever. Unilever is a Dutch English company that makes soap, dish products, and food. They do that all around the world. That’s complicated.  How do you bring people into an  an ecosystem that protects fish? And the biggest problem that the world is beginning to grapple with is that you have corporate entities that almost are more powerful than the traditional national sovereigns. When you look at a Google or an Apple. They don’t pay their fair share of taxes. They operate among different companies with a degree of impunity. If they were just small business people or human beings, they wouldn’t be able to do. That was the criticism of globalized capitalism that I grew up with.

Q. I’m looking into Apple currently, into their state and federal tax laws. As they are situated in California, they have to pay 28%. But their tax rates were 15%. They have an Irish subsidiary right? 

This is a common technique with technology companies use to put the intellectual property offshore and use that as a device through royalties between various national companies to minimize their tax exposure. That’s what I mean when I say they are more powerful than nation states. When the Irish government offers them a deal, how does the US government prevent the Irish from doing it? What new country will then come along to help Apple do it?  For states to realistically assess the taxes of those companies requires a degree of cooperation. That’s hard with tax policy that is tied to political development considerations.

Q. Touching on those legal issues, one thing I want to examine is the worker rights of sailors and captains on tankers moving for days on the seas. Have you looked into that?

As I said, there are many challenges to the law of the sea in the global system. It’s a little bit like fishing. Many of the world ships are not registered in the states that own them or operate them. They aren’t registered in Germany or US, even if they are carrying US cargoes. They are registered in flags of convenience like Liberia, Malta, and Cambodia. That creates the risk that there will be less regulation and protection. It’s a spectrum. For instance if you are crew or captain with Maersk, a Danish fishing company, though the traditional dangers of the sea exist, the conditions are good, pay is high. Benefits are good. But on the other hand, let’s say if you’re on a Cambodia flag ship. Cambodia doesn’t abide by international labor standards. The most extreme are – and a member of the Cummings School wrote about this – most of the sailors on such fishing vessels are far off shore  and work for years without having a chance to be on land, and be paid appropriate wages. It’s really hard to protect them, because they are beyond 200 miles. The seas are open to all nations. The US or the EU or China. They have no right under law to go to that ship and say “you’re Cambodian ship which didn’t pay your workers for two years and we’re going to arrest you.” It doesn’t work. Just as much it’s hard to protect fish populations. It’s really hard to protect human beings beyond 200 miles. Thousands of people who are at risk..

Q. Is there the risk of them turning into pirates as well?

Well, not automatically . But it’s all part of the same problem. If you are a pirate, you traffick people, you smuggle people, you don’t pay your crew so well, etc.. These are all issues of lawlessness at sea, which are part of the challenge of the law of the sea. As I said in the beginning, oceans are really important for globalization but they also harbor some real issues in the protection of resources and protections of people.

Q. Oh! There was one thing I wanted to ask you in particular. I did model UN in high school and had the opportunity to study counter terrorism. I heard that there was an incident when centrifuges were smuggled into Iran, and one of the hardships we as a conference faced was how to apply different aspects of UNICLOS. So, my question is how do you characterize the intersection between national security and national sovereignty.

The biggest issue in recent years is, for example, commerce either from or to North Korea. And again, the vessels are flying a flag from Cambodia, Liberia, or North Korea. The ability to intervene is really hard, absent specific UN sanctions, which don’t apply very often. It’s hard to find grounds to board these vessels. For lack of a better word, loopholes remain to some degree. The US led something in an anti proliferation initiative that many states have agreed to participate in cooperatively to inspect vessels. But many states don’t participate and all you need is handful of non-compliant states to create real problems. Some smugglings of components for weapons of mass destruction has been interdicted for the last 20 years. But you don’t know what’s gotten through.

Q. It’s scary because I read an article that North Korea has ties to Syria, sending arms there.

One famous incident involved a vessel with North Korea and Yemen. It was in the Indian Ocean and eventually the Yemen government said “we legitimately bought these” items but it was very unclear of what was going on. Nevertheless, the vessel was also tied in with the instability in the middle east and there were parties which wanted to take advantage of it.

Q. Professor, I know you have to go soon, but as a practicing lawyer and best, according to some. What’s your method in trying to dig up a truth that’s been concealed.

It’s an interesting question and I think it’s a matter of looking at what has been said publically by governments and companies. For the smuggling of nuclear weapons, often you can find underlying documents – not always – and look for the inconsistencies between the documents and the statements. That will often be informative. Sometimes, it’s just looking at whether details align and don’t make sense. It’s a lot of homework. It’s looking at the details of a certain line of conduct, looking at their internal inconsistencies, looking how they are articulated by a government and companies, and talking with other people looking at the issue, because there are other smart people analyzing the issue. We talked about Apple, it’s not illegal conduct, but it’s conduct that most citizens aren’t aware of. Most people don’t understand how Apple can legitimately pay only a small fraction of taxes it is due. It’s that kind of homework. Looking at each corporate entity created, reviewing the annual report carefully, understanding what the underlying strategy of the company is, and talking with tax experts. Then you can gradually piece together what the company is doing, why they are doing it, even if publically they adopt a certain spin.

 

 

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