CHAPTER 1
The Relevance of International Law to the Processes of Economic and Social Development
WOLFGANG FRIEDMANN
Introductory Observations
A generation ago, an article on this theme could hardly have been written. Notwithstanding the establishment of the League of Nations and several notable efforts centered around the League concerning matters of human welfare, the concern of international law and organization with matters of economic and social development was, at best, sporadic.
The organized international pursuit of objectives of economic and social development is essentially a post World War II phenomenon, although objectives of both economic and social development were included in the Constitution of the International Labour Organisation which was established in 1919. The Preamble to the Constitution states, in part, as follows:
Whereas conditions of labour exist involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled; and an improvement of those conditions is urgently required: as, for example, by the regulation of the hours of work, the regulation of the labour supply, the prevention of unemployment, the provision of an adequate living wage, the protection of the worker against sickness, disease and injury arising out of his employment, the protection of children, young persons and women, provision for old age and injury, protection of the interests of workers when employed in countries other than their own, recognition of the principle of equal remuneration for work of equal value, recognition of the principle of freedom of association, the organisation of vocational and technical education and other measures;
Whereas also the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries;
The High Contracting Parties, moved by sentiments of justice and humanity as well as by the desire to secure the permanent peace of the world ... agree to the following Constitution of the International Labour Organisation.
The great enlargement of the fields of international economic and social welfare organization after World War II was mainly due to two factors. First, the horizontal widening of the areas of cooperation through the specialized agencies of the United Nations concerned with such matters as cultural relations and education (UNESCO), health (WHO), food and agriculture (FAO), air transport (ICAO), the international utilization of atomic energy (IAEA), currency stabilization and monetary supply (IMF), economic reconstruction and development (IBRD). Second, the postwar structure of international law has been deeply affected by the advent to statehood of a large number of countries which were not only hitherto politically unfree but were also economically underdeveloped.
The concept of economic and social development as a public international responsibility is far and away the most important new departure in contemporary international law and organization. It has added to the enlargement of international activities concerned with matters of human welfare, and to the vertical reach into the manifold processes of economic activity and organization. The prices of agricultural commodities, the methods and terms of the exploitation of mineral resources, the instrumentalities of international trade, and the structure and mechanisms of economic development within the underdeveloped nations have become integral parts of contemporary inter national law and organization. Hence, the Constitution of the International Bank for Reconstruction and Development, and — though less specifically related to the needs of less-developed countries — the Articles of Agreement of the International Monetary Fund, both in the Bretton Woods Agreement of 1944, must be regarded as the most significant documents developed within the purview of international law over economic and social matters since the original Constitution of the International Labour Organisation. But exclusive preoccupation with the objectives, the structure, and the techniques of the World Bank and other international financial agencies would be inadequate to describe the concern of contemporary international law with economic and social development. The concept of development assistance as a transnational concern has also given rise to a multitude of new organizations and techniques on the national and binational level. Development aid on a nation-to-nation level dates back to the Marshall Plan of 1947, from which has sprung a network of public national aid agencies in a growing number of countries and corresponding institutions in recipient countries. These agencies conclude, year by year, a multitude of binational agreements for grants, loans, commodity exchanges, and technical assistance, usually on a government-to-government or public agency-to-public agency level. No less significant for the structure of international law, and especially for international contractual relations, has been the transformation in the character and terms of concession and economic development agreements between the governments of underdeveloped countries on the one side and private foreign investors on the other side. As will be shown later, the growing importance of these bilateral relationships has brought a whole new sphere of "transnational" situations within the purview of modern international law, i.e., relationships formerly regarded as purely private have been transformed into matters of public concern. This new development has also been accompanied by, and in turn stimulated, new international concepts on the rights of a state over its natural resources and the mutual rights and obligations pertaining between private foreign investors and the host governments in underdeveloped countries.
These new concerns and objectives have given rise to an interrelated network of institutions, treaties, and international transactions. Included are: international conventions (such as the convention sponsored by the World Bank for the settlement of investment disputes between states and the nationals of other states); many United Nations declaratory resolutions (such as the Resolution on the Permanent Control over Natural Resources); bilateral treaties (such as the Friendship, Commerce, and Navigation treaties concluded between the United States and many other countries); and a multitude of agreements between foreign investors and host states for the development of resources. Most recently, this new and complex type of relationship between developed and...
