The State of Law in the South Caucasus (Euro-Asian Studies)

The State of Law in the South Caucasus Edited by Christopher P.M. Waters

The State of Law in the South Caucasus

Euro-Asian Studies General Editor: Christoph Bluth, Visiting Professor, Centre for Euro-Asian Studies, University of Reading, and Professor in International Studies, University of Leeds. The transition of the countries in Euro-Asia is one of the most important developments affecting the international system since the end of the Cold War. The development of market economies after decades of central planning, the formation of new states and national identities, the creation of new, democratic institutions of state and the reintegration into the world economy pose enormous challenges. Whilst some countries have progressed relatively well and are in the process of joining the European Union, others have experienced several economic and social dislocations to the point of political disintegration and armed conflicts. The Centre for Euro-Asian Studies at the University of Reading is dedicated to the academic study of the political, economic, social and cultural aspects of this process. This series presents the most recent contributions from leading academics in the field. With an interdisciplinary focus, it seeks to provide a substantial, original and ongoing contribution to our understanding of the region which is of vital importance for academics and of high policy relevance for governments and businesses. Titles include: Yelena Kalyuzhnova and Wladimir Andeff (editors) PRIVATISATION AND STRUCTURAL CHANGE IN TRANSITION ECONOMIES Yelena Kalyuzhnova and Dov Lynch (editors) THE EURO-ASIAN WORLD A Period of Transition Yelena Kalyuzhnova, Amy Myers Jaffe, Dov Lynch and Robin C. Sickles (editors) ENERGY IN THE CASPIAN REGION Present and Future Yelena Kalyuzhnova and Michael Taylor (editors) TRANSITIONAL ECONOMIES Banking, Finance, Institutions Lúcio Vinhas de Souza and Bas van Aarle (editors) THE EUROAREA AND THE NEW EU MEMBER STATES Christopher P. M. Waters (editor) THE STATE OF LAW IN THE SOUTH CAUCASUS By the same author: COUNSEL IN THE CAUCASUS: Professionalization and Law in Georgia

Euro-Asian Studies Series Standing Order ISBN 0–333–80114–8 (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

The State of Law in the South Caucasus Edited by

Christopher P. M. Waters

Selection and editorial matter © Christopher P. M. Waters 2005 Individual chapters © Contributors 2005 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published in 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–1–4039–3656–1 hardback ISBN-10: 1–4039–3656–0 hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data The state of law in the South Caucasus / edited by Christopher P. M. Waters. p. cm.—(Euro-Asian studies) Includes bibliographical references and index. ISBN 1–4039–3656–0 (cloth) 1. Law – Georgia (Republic). 2. Law – Armenia. 3. Law – Azerbaijan. I. Waters, Christopher P. M. (Christopher Peter Michael), 1968– . II. Euro-Asian studies (Palgrave (Firm)) KLA475.5.S73 2005 349.4758—dc22 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 09 08 07 06 05 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne

2005046213

For Sofie and Isabella

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Contents Acknowledgements

ix

List of Contributors

x

Introduction Christopher P. M. Waters

Part I

xiii

Role of the State

1 Clash of Institutions: Clientelism and Corruption vs. Rule of Law Christoph H. Stefes

3

2 ‘Georgians Cannot Help Being Original’: the Evolution of Election Rules in the Republic of Georgia Erik S. Herron and Irakli G. Mirzashvili

20

3 Democratization and the Rule of Law in Azerbaijan: Europe’s Relevance Gulara Guliyeva

41

4

59

Rule of Law in the Secessionist States Christopher P. M. Waters

Part II

Lawyering

5 Lawyers in the Caucasus: Climbing out of the Communist Shadows Claude Zullo

81

6 Legal Education in Azerbaijan: Past, Present and Future Challenges Charles Robert Davidson and Nancy Sharp Nti Asare

96

Part III Regulation 7 The Legal Basis for Business in Georgia Marina Guledani

117

8 Regulation and Reform in Telecommunications Karen Andreasyan

130

vii

viii Contents

9 Linking Rule of Law and Environmental Policy Reform in Armenia and Georgia Allison Morrill Chatrchyan and Amanda E. Wooden

Part IV

144

Vulnerable Groups and the Law

10 Armenia’s Women in Transition Sara Anjargolian

181

11 Protecting Housing and Property Rights of the Displaced in Georgia Anneke Rachel Smit

196

Index

219

Acknowledgements I thank Yelena Kalyuzhnova, Director of the Centre for Euro-Asian Studies at the University of Reading, and Christoph Bluth, the general editor of EuroAsian Studies series, for their encouragement of this project. I also gratefully acknowledge the editorial assistance of Rhona Miller and Ani Rae. The cooperation and patience of Amanda Watkins, Katie Button and Jo North at Palgrave are much appreciated. Finally, I thank the University of Reading, the Centre for Russian and East European Studies at the University of Toronto, and the British Academy for institutional support (the latter funding my fieldwork in South Ossetia and Nagorno Karabakh).

ix

Contributors Karen Andreasyan is an Assistant Professor at the Law Department of Yerevan State University. He is also the Director of the Media Law Institute of Armenia and Coordinator of the Global Network of Freedom of Information Advocates. In 2003 he was Markle Senior Fellow in the Comparative Media Law and Policy programme at the Centre for Socio-Legal Studies at Oxford University. He has been a consultant to several governmental and nongovernmental organizations on media and rule of law matters. Sara Anjargolian holds a Juris Doctorate from the University of California at Berkeley School of Law (Boalt Hall) and a BA in Political Science and Public Policy from the University of California, Los Angeles. Following her legal studies she practised as a trial attorney for the Department of Justice in Washington, DC. She has been a Fullbright Fellow in Armenia and a member of the Law Faculty of the American University of Armenia. She currently serves as a policy adviser and deputy city attorney with the Los Angeles City Attorney’s office. Nancy Sharp Nti Asare received her Juris Doctorate from Willamette University in Salem, Oregon. She has also studied at the East China University of Politics and Law in Shanghai and received an LLM from the University of Stockholm. She is a member of the State Bar of New Mexico and the Tenth Circuit Court of Appeals in Denver, Colorado and has held professorships in several countries. Currently she is working on a Legal Education reform project funded by the US Department of State, the American Bar Association, and USAID in Baku. Allison Morrill Chatrchyan is a Post-doctoral Fellow at Bard College in the Center for Environmental Policy. Her research interests include environmental politics and policy, especially in post-communist countries, and the effect of democratization on environmental policy. Her doctoral research focused on democratic stagnation and protection of Lake Sevan and forestry resources in post-communist Armenia. She previously worked for the United Nations Environment Programme (UNEP) in Paris and for the Environmental Policy Center in Washington, DC. Charles Robert Davidson has a law degree from George Washington University and did his masters and doctoral work at the Fletcher School of Law and Diplomacy. Formerly an attorney in the Honors Program at the US Department of Justice, he has worked in the Middle East and the Caucasus on issues of law reform and legal education. He currently teaches International Law at Khazar University in Azerbaijan. x

List of Contributors xi

Marina Guledani is a graduate of the International Law and International Relations Faculty of Tbilisi State University and holds an LLM in business law from the University of Leiden. She specializes in the field of international commercial and energy law and is employed by PA Consulting Group as a legal adviser on energy regulatory and legal issues. She is also a Lecturer at Tbilisi State University where she teaches International Trade Law. Gulara Guliyeva joined the American Bar Association’s Central European and Eurasian Law Initiative as a staff attorney in 2002 and specializes in legal education reform. Since 2001 she has also been a visiting professor at Western University in Baku, teaching Public Law and European Law. She received her law degree from Baku State University in 1997 and a masters in International Law from Western University in 2001. Currently she is working on her doctoral thesis on ‘European Union treaty relations with third countries’ at the Institute of Philosophy and Law of Azerbaijan’s Academy of Sciences. Erik S. Herron is an Assistant Professor of political science at the University of Kansas. His research focuses on elections and political parties in East Central Europe and Eurasia. He has travelled extensively in the region and has observed elections in Russia, Ukraine and Georgia. He has published and has forthcoming work in various journals, including the American Journal of Political Science, Journal of Politics, World Politics, Legislative Studies Quarterly, Electoral Studies, Europe-Asia Studies, Democratization, Nationalities Papers, Journal of Central Asian Studies and Problems of Post-Communism. Irakli G. Mirzashvili received a degree in Political Science and International Studies from the University of Kansas in 2004. He is currently a law student at the University of Houston. Anneke Rachel Smit is a doctoral candidate at the University of Reading, where she also teaches in the Schools of Law and European Studies. She has previous degrees from Alberta and McGill Universities. She has worked on human rights issues with the Caucasus Institute of Peace, Democracy and Development in Tbilisi and with the OSCE in Kosovo. Currently on leave from the Canadian Department of Justice, Immigration Law Section, her thesis examines housing and property rights and displacement issues in post-conflict environments. She was a Visiting Fellow of the Oxford Refugee Studies Centre in 2003. Christoph H. Stefes is an Assistant Professor for Comparative European and Post-Soviet Studies at the University of Colorado at Denver. He received his doctorate in International Studies from the Graduate School of International Studies, University of Denver, in 2002. He is currently completing a book, comparing the Georgian and Armenian systems of corruption, which will be published in the Euro-Asian Studies series in 2005. He conducted extensive

xii List of Contributors

research in Georgia from 1998–9 as a Visiting Lecturer of the Civic Education Project and continued his research in Armenia in 2003. Christopher P. M. Waters studied at Toronto, Queen’s and McGill Universities and is a member of the Bar of Ontario, Canada. His doctorate, from the Institute of Comparative Law at McGill, examined lawyers and the rule of law in the South Caucasus. He is currently a Senior Lecturer in International Law and Deputy Director of the Centre for Euro-Asian Studies at the University of Reading. He has taught at universities in Georgia and Armenia and has monitored elections and worked on higher education reform projects in all three South Caucasian countries. Amanda E. Wooden holds a doctorate and masters degree from Claremont Graduate University and did her undergraduate studies at Syracuse University. She is currently an Assistant Professor in the Department of Political Science at Northeastern Illinois University in Chicago. She was a visiting lecturer at universities in Georgia and Kyrgyzstan for the Civic Education Project, and has conducted field research and monitored elections in several countries of Central Asia and the Caucasus. Her research on the region focuses on water and environmental policy. Claude Zullo is the Regional Deputy Country Director for the American Bar Association’s Central European and Eurasian Law Initiative (ABA/CEELI) Programs in the Caucasus. Before joining ABA/CEELI he was a Senior Program Officer for the National Democratic Institute, working on its Slovakia and Romania Programs from 1999 until 2001. He also worked from 1996 until 1998 on conflict prevention projects in Eastern Europe and the former Soviet Union. He holds a masters degree in International Affairs from Columbia University.

Introduction Christopher P. M. Waters

This book examines the state of law in the three South Caucasian countries, Armenia, Azerbaijan and Georgia. To what extent have these countries reformed their legal systems since independence? Has the impact of the reforms been meaningful in practice? In addition to providing a snapshot of law and legal institutions ‘on the books’ and ‘on the ground’ in the region, the book also asks where the three countries are headed. Are rule of lawbased states – or even rough versions of the perhaps never fully achievable ideal – realizable in the foreseeable future? The region’s legal weaknesses are evident in many respects: some poor quality legislation (in both drafting and substantive senses), corruption and a lack of independence in the judiciary, uneven implementation of laws and lack of adherence to law by those in power. Law’s weaknesses impact on a variety of public goods, including democracy, economic growth, sustainable development and human rights protection. Perhaps the most spectacular failing of law has been in ensuring democratic elections. For democracy to exist, at least on the basic level of fair and free elections, there must be laws which set out the ‘rules of the game’; the party receiving x number of votes should be guaranteed y amount of power. There must also be referees – independent courts or commissions – which are capable of issuing binding, enforceable judgements to ensure that the rules of the game are complied with. Of course, there can be tensions between the rule of law and democracy, in cases where the will of the majority is checked by judges seeking to protect a minority or even their own power.1 Nonetheless, short of accepting tyranny of the majority, or even uncertainty in what the majority wants, some form of the rule of law must apply. With respect to democracy, elections in the region have consistently fallen short of international standards. A string of important elections in 2003 confirmed that, despite continued prodding and assistance from the international community for more than a decade, fair elections were not taken seriously by those in power. Armenian presidential elections in February and March of 2003 saw numerous irregularities in vote counting and tabulation and the October 2003 presidential election in Azerbaijan was marked by electoral fraud and intimidation.2 In the latter case, the election represented a dynastic succession from father to son. Less than one month after the elections in Azerbaijan, Georgian parliamentary elections were also characterized by irregularities.3 These irregularities triggered massive street protests and, following a storming of the Parliament, the forced resignation of President xiii

xiv The State of Law in the South Caucasus

Shevardnadze. Although the ‘Rose Revolution’ was popular and the country’s new leaders have reformist credentials, it is worth remembering that the methods used in the transition of power were extra-constitutional and sparked real fears of instability.4 Furthermore, the new Georgian leadership has shown a worrying authoritarian streak in pushing through constitutional amendments with little public discussion5 and not always matching its rhetoric on human rights with action.6 Although law remains weak – even in Georgia following its ‘revolution’ – there are grounds for optimism. The first is a pro-European orientation evident in all three countries. European Union (EU) membership is an ultimate goal and attempts at harmonizing laws have already begun. Indeed the first steps in this regard followed independence with ‘model law shopping’ from Western European options, in order to carry out civil and criminal code reforms. More recently, accession to the Council of Europe, by Georgia in 1999 and Armenia and Azerbaijan in 2001, has brought the three countries into the European human rights regime. Extensive legislative reforms have been undertaken to comply with accession requirements. As is so often the case, however, a failure to implement the new legislation remains a holdup. There is some hope that with cases from the South Caucasus starting to go to the European Court of Human Rights, the decisions of which are binding on states, rights will be taken more seriously. The first case from Georgia to the Strasbourg court, involving the illegal detention of the former mayor of Batumi, was decided in April 20047 and represents the beginning of a great number of cases where the protection of the court is sought. The experience of Central and East European countries suggests that the ‘dialogue’ between domestic courts and the European Court of Human Rights can result in real changes.8 In the reform of legal institutions there has also been progress.9 For example, Georgia’s 1997 Law on the Judiciary, together with examinations for judges, has resulted in improvements in Georgian courts. Georgian judges are more competent and arguably less corrupt than before the reforms. It is also noteworthy that the architect of these reforms while Justice Minister under Shevardnadze is now the Georgian President. And, after several years of confusion in all three South Caucasus countries, more or less coherent legislation exists across the region to govern attorneys. Finally, it is worth noting here that legal personnel from the region have professionalized a great deal in recent years and this is evident in improved advocacy, legislative drafting and law teaching. Other grounds for cautious optimism are canvassed in subsequent chapters, though, not surprisingly, different sectors, different jurisdictions and different contributors suggest varying degrees of optimism. The diversity of the chapters in this book is apparent from a brief glance at the table of contents. Aside from the fact that the chapters address law in different jurisdictions, the book examines four broad themes. The first part

Introduction xv

covers the role of the state in legal reform by looking at corruption, elections, the relationship with the EU and the rule of law within two of the secessionist parts of the region. In many ways, the challenge for rule of law reformers, is not to limit state power but to rebuild the state as a guarantor of stability and rights. The second part of the book covers the delivery of legal services, with analyses of legal professions and legal education. Without properly trained and regulated lawyers, poor laws will be drafted and poor counsel given to clients; the rule of law cannot be implemented without professionalization in this sphere. The third part considers the regulatory framework which has been established in three sectors: telecommunications, the environment and business. In each of these areas, regulation is uneven and irregular, though improving overall as the quality of legislation gets better and, at least in some cases, enforcement improves. The fourth part then considers the position of vulnerable groups in relation to the rule of law, specifically, women and the internally displaced. The lack of the rule of law – and the failure to implement international obligations – has a greater impact on these groups than on other segments of society. If the chapters in this book are diverse in terms of topics, they are also heterogeneous in terms of methodologies. While all of the chapters are informed by the authors’ extensive experience in the region, some authors tend towards a doctrinal approach, focusing on the ‘laws on books’, while others focus more on institutions. Still others take into account informal law and legal culture.10 This diversity in approach is not surprising since the contributors are drawn from the different disciplines of law (and from different legal traditions within law) and political science. This latter point suggests varying approaches to the relationship between law and power as well as the question of what the rule of law actually is. The archetypal lawyers’ and political scientists’ versions of the rule of law are clear enough. For lawyers, the rule of law can be expressed as a shopping list of legal standards – no retroactive lawmaking, laws must be clear and general and so forth.11 The lawyer describes the ideal and its obligations but does not focus on how that ideal is reached – why people actually obey laws or set up the rule of law in the first place. For many political scientists on the other hand, the focus is on power. Maravall and Przeworski for instance, writing in the rational choice tradition, see the rule of law as being nothing more than a state of balance between competing forces: ‘The conflict between rule of majority and rule of law is just a conflict between actors who use votes and laws as their instruments. Whether legislatures or courts prevail in particular situations is a matter of politics.’12 Between these poles there is of course a myriad of interpretations and definitions, none of which finds universal currency in either – let alone both – disciplines. One author aptly suggests that the rule of law ‘belongs to the category of open-ended concepts which are subject to permanent debate’.13 Nonetheless,

xvi The State of Law in the South Caucasus

a common benchmark of what the rule of law looks like must be set out here in order to measure the reforms’ successes or failures. Thomas Carothers’ definition – borrowing from formal, substantive and functional theories but ultimately pragmatic in nature – will be used: The rule of law can be defined as a system in which the laws are public knowledge, are clear in meaning, and apply equally to everyone. They enshrine and uphold the political and civil liberties that have gained status as universal human rights over the last half-century. In particular, anyone accused of a crime has the right to a fair, prompt hearing and is presumed innocent until proved guilty. The central institutions of the legal system, including courts, prosecutors and police, are reasonably fair, competent and efficient. Judges are impartial and independent, not subject to political influence or manipulation. Perhaps most important, the government is embedded in a comprehensive legal framework, its officials accept that the law will be applied to their own conduct, and their government seeks to be law-abiding.14 Carothers’ definition suggests three types of changes needed to bring about the rule of law. The first involves rewriting or modernizing the laws themselves. This is the easiest to understand and implement and, in the early 1990s, was the preferred strategy of reform. An enduring image here is of the law ‘missionary’ getting off the airplane in a post-communist capital, with Western model laws in hand. While modernizing laws is a necessary part of reform it is clearly not sufficient. The second type of reform goes deeper by focusing on institutions. Activities here include retraining judges, prosecutors, lawyers and police, restructuring the judiciary and improving the infrastructure of courts. For Carothers, type three reforms ‘aim at the deeper goal of increasing government compliance with the law’.15 This requires an independent judiciary but also political and civil society checks on leaders. The following chapters consider the applicability of this version of the rule of law, and the steps to achieving it, in a variety of contexts. This book is the first work in English exploring law across a number of themes and boundaries in the South Caucasus. It is hoped that it will provide an opportunity for comparative reflection and indeed a number of the chapters explicitly compare aspects of the rule of law in more than one of the South Caucasian countries. Perhaps not surprisingly given postindependence tensions, many people in the region itself are keen to stress the differences between the three countries. There are, however, at least three reasons for treating them together. First, the countries have had similar and, at times, shared histories. Linked by common foreign occupiers (Persian, Ottoman, Russian and Soviet) and ethnic settlement patterns that straddle state borders, there are no neat divisions between the three countries’

Introduction xvii

histories. Second, the three countries share common challenges with respect to constructing rule of law-based states, such as combating corruption. European and international agencies and donors recognize this as well and the South Caucasus is often treated as a definable region for rule of law and democratization projects as well as closer partnership with the EU.16 There has been some recognition in the region itself that common policies and even a common legal system would be helpful for development.17 Third, they also share a continued reliance on non-state law rooted in culture, centred on, among other things, reputation and tight social networks. This unofficial law is a central feature in all three states. These commonalities provide fruitful ground for further comparative exploration.

Notes 1. J. M. Maravall and A. Przeworski, Democracy and the Rule of Law (Cambridge: Cambridge University Press, 2003). 2. See the final OSCE report of 23 April 2003 on the Armenian presidential elections, available at http://www.osce.org/documents/odihr/2003/04/1203_en.pdf and the 12 November 2003 report on the Azerbaijani presidential election, available at http://www.osce.org/documents/odihr/2003/11/1151_en.pdf. 3. See the OSCE’s 3 November 2003 preliminary report, available at http://www.osce.org/documents/odihr/2003/11/1031_en.pdf. 4. Indeed for some days during the street action, it was not clear who was in control of the country. See N. Walsh and N. Antelava, ‘Protestors threaten to oust Georgia’s President: Shevardnadze on the brink of losing power as democracy demonstrators batter their way into parliament’, The Observer (23 November 2003), p. 23. 5. M. Vignansky, ‘Georgia: Constitutional Changes Cause Uproar’, IWPR’s Caucasus Reporting Service (12 February 2004). Available at http://www.iwpr.net. 6. J. C. Peuch, ‘Georgia: Critics Say Police Violence, Media Intimidation on the Rise’, EurasiaNet (20 February 2004). Available at http://www.eurasianet.org/ departments/rights/eav022004.shtml. 7. Assanidze v. Georgia, decision of the European Court of Human Rights (Application No. 70513/01), 8 April 2004. 8. On how the jurisprudence of states in Central and East European has changed since accession to the ECHR, see the country studies in R. Blackburn and J. Polakiewicz, Fundamental Rights in Europe: the European Convention on Human Rights and its Member States, 1950–2000 (Oxford: Oxford University Press, 2001). 9. See C. P. M. Waters, Counsel in the Caucasus: Law and Professionalization in Georgia (Leiden: Martinus Nijhoff, 2004). 10. For a further look at the issue of informal law in the wider post-communist region, see D. Galligan and M. Kurkchiyan, Law and Informal Practices: Post-Communist Experience (Oxford: Oxford University Press, 2003). 11. For a by now classic definition see L. Fuller, The Morality of Law (New Haven: Yale University Press, 1969). 12. Maravall and Przeworski, supra note 1 at p. 15.

xviii The State of Law in the South Caucasus 13. R. Grote, ‘The Rule of Law, Rechtsstaat and Etat de Droit’, in C. Starck, ed., Constitutionalism, Universalism and Democracy: a Comparative Analysis (Baden-Baden: Nomos Verlagsgesellschaft, 1999), p. 271. 14. T. Carothers, ‘The Rule of Law Revival’, Foreign Affairs, 77 (2) (1998), pp. 95–6. 15. Ibid. at p. 100. 16. This was recently stressed by the European Parliament’s ‘Gahrton report’, which recommended closer EU links with the South Caucasus. See ‘Report with a proposal for a European Parliament recommendation to the Council on EU policy towards the South Caucasus’, 2003/2225(INI). Available at http://www. europarl.eu.int. 17. In an interview with journalists on the eve of a visit to Armenia, Saakashvili offered his vision of economic integration between Georgia and Armenia: ‘It is the [elimination] of all customs obstacles, setting common tariffs, cutting them down and full cancellation in certain cases … It is [ridiculous] that people have to wait 40–60 minutes at the border to cross from Armenia to Georgia. It is unacceptable, unserious; it is a leftover of feudalistic regime. We need free transit of both people and goods. (For this) we need a common legal system … Today each one of our countries, taken separately, is weak, for the market needs expansion, larger space.’ Armenia This Week (12 March 2004). Available at http://www.aaainc.org.

Part I Role of the State

Ironically, one of the challenges facing post-communist societies is not to dismantle the state but rather to reconstruct it. In Chapter 1, Christoph Stefes shows how endemic corruption in the state apparatus undermines the basis of the rule of law in the South Caucasus by eroding state capacity, civil society and legal culture. In turning to ways in which corruption might be fought, he notes that combating corruption and promoting the rule of law are mutually reinforcing endeavours. To combat corruption of course, honest – or at least accountable – politicians must be elected. In Chapter 2, Erik Herron and Irakli Mirzashvili synthesize the study of elections and the rule of law by tracing the evolution of Georgia’s parliamentary election law. In a region where electoral fraud is common, the rules for translating votes into seats, and the implementation of those rules, will be crucial to the development of the rule of law. Not all impetus for the rule of law comes from within, however. The potential benefit of European integration is an externally based incentive in encouraging the South Caucasian states to adapt European-style laws and institutions. In Chapter 3, Gulara Guliyeva considers how formal links with Europe – in particular the Partnership and Cooperation agreement between the EU and Azerbaijan – can be used more effectively to bring about governance and rule of law change in the region. Finally, no account of the role of the state in the South Caucasus would be complete without noting that three secessionist territories currently remain outside of the metropolitan states’ control. In Chapter 4, Christopher Waters examines two of these de facto states, South Ossetia and Nagorno Karabakh. He suggests that despite the isolation of these territories, ‘state building’ has occurred and some progress towards the rule of law has been made.

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1 Clash of Institutions: Clientelism and Corruption vs. Rule of Law Christoph H. Stefes

Introduction Fifteen years after the fall of Soviet rule, Armenia, Azerbaijan and Georgia remain plain examples of post-authoritarian transitions that have gone awry. There are differences between these three countries in terms of their political and economic developments. Freedom House, for example, has consistently ranked Armenia and Georgia above Azerbaijan in terms of economic liberalization and political democratization.1 Moreover, Georgia certainly fares better than Armenia in terms of democratic development, taking into account that Georgia recently witnessed the rise of a young and reformist elite to political power (winter 2003). In contrast, Armenia appears to be stuck with a government that does not tolerate any opposition to its rule, as the brutal crackdown of a recent attempt at replicating Georgia’s ‘Rose Revolution’ has clearly demonstrated (spring 2004). Yet despite these variations, citizens in all three countries are equally struggling with having their rights and liberties respected and promoted by their respective governments. Democratization has seemingly reached the elite level, but has not trickled down to the common citizen yet. Political scientists call this type of ‘shallow’ democracy an illiberal or electoral democracy.2 Freedom House’s rating of the three countries’ constitutional, legislative and judicial framework reveals no significant differences. Moreover, in contrast to Central Europe and the Baltic region, the South Caucasus has so far not provided a fertile soil for the rule of law.3 This shortcoming has not escaped the attention of Western governments and international organizations. The European Union (EU), the United States Agency for International Development (USAID) and the United Nations Development Programme (UNDP), among others, have poured billions of dollars into the South Caucasus to support the development of formal state institutions that are supposed to uphold the rule of law – so far, without much success. The urgency with which foreign and local actors attempt to improve the rule of law raises three questions. First, why is the rule of law so crucial to 3

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The State of Law in the South Caucasus

these countries? Second, why is it so difficult to establish the rule of law? And, finally, what has been and what needs to be done to promote the rule of law in the South Caucasus? In addressing the first question, the opening section of this chapter argues that the rule of law is a necessary – albeit not a sufficient – condition for enhancing and deepening democratic rule and for providing the security that economic actors need to engage in market activities. Following the work of Robert Dahl, I argue in the second part that the rule of law is built on three crucial factors that are mutually reinforcing: effective state institutions and horizontal accountability, social constraints and civil society (vertical accountability), and psychological constraints at both the society- and elite-level (political culture).4 As the third and fourth sections point out, systemic corruption is a significant obstacle to the development of these three pillars of the rule of law. Therefore, corruption does not simply thrive on the feebleness of the rule of law, nor does it simply indicate the weakness of the Rechtsstaat. It undermines the rule of law in direct and indirect ways, targeting the three pillars on which the rule of law is built. The concluding section accordingly assesses the various anti-corruption measures that the three South Caucasian countries have implemented over the last few years. It also points towards further actions that governments should undertake to improve the rule of law.

The rule of law: necessary condition for democratic and economic development This chapter largely adopts the definition of the rule of law by Thomas Carothers quoted in the Introduction to this volume. At its core, the rule of law entails the principle that the law constrains the state’s exercise of power and regulates the relations between citizens. To make the rule of law meaningful, the law itself should ‘enshrine and uphold the political and civil liberties that have gained status as universal human rights over the last halfcentury’.5 By relating these universal rights to the rule of law, it becomes readily apparent that the rule of law is a crucial foundation for democratic rule and especially for its Western form, commonly labelled liberal democracy. The Vienna Declaration states that ‘Democracy is based on the freely expressed will of the people to determine their own political, economic, social and cultural systems and their full participation in all aspects of their lives.’6 In other words, democracy is about popular sovereignty, about the ability of citizens to influence collectively binding decisions. This influence is indirectly exercised by holding public representatives accountable for their decisions via free, fair and competitive elections. A set of basic political rights and civil liberties guarantee that elections are indeed free, fair and competitive. Among these rights and liberties are the right to vote and to be elected, the right to form a political organization, freedom of information, etc.7 The protection of these rights and liberties makes the rule of law so crucial, because

Clash of Institutions 5

without these rights, elections are usually uncompetitive and therefore not democratic. Liberal democracy goes one step further than the basic definition of democracy by not only determining ‘who’ governs but also ‘how’ one governs, setting clear limits on the exercise of political power. Jack Donnelly states: Liberal democracy is a very specific kind of government in which the morally and politically prior rights of citizens and the requirement of the rule of law limit the range of democratic decision-making … Popular empowerment – democracy with no adjectives (or with most procedural adjectives) – will realize human rights only to the extent that the people choose to do so … The liberal commitment to individual rights more than the democratic commitment to popular empowerment makes contemporary liberal democracies rights-protective.8 Again, the rule of law becomes a key ingredient of (liberal-) democratic rule. However, the rule of law is only a necessary condition of democracy – it cannot guarantee that the majority will indeed rule. This is so because the rule of law provides citizens with the opportunity to determine their fate, but cannot compel citizens to exercise their rights and liberties. Political apathy among a majority of the citizens easily turns a de jure democracy into a de facto oligarchy.9 Nevertheless, it must be concluded that without the rule of law, democracy cannot be realized. The same assumption holds true for the development of a market economy. A market economy can probably survive without formal rules and outside enforcement as long as goods and services are exchanged on the spot between citizens that know and trust each other. However, modern market places are complex entities in which actors, who usually do not know each other, exchange goods and services without full knowledge about the quality of the products and services. Moreover, the exchange might involve payments without immediate delivery and vice versa. Under such circumstances, formal law and outside enforcement substitute for trust, simplicity of market transactions and ordinary judgement. As a result, the rule of law increases the number of economic actors and the type of market activities that people engage in, making the economy more efficient. Without the enforcement of laws that regulate contracts and property rights, citizens would be hesitant to invest and trade, or they would do so in much less economical ways, relying on informal rules and norms that are imposing additional costs on the economic actors (e.g. in the form of bribes). In short, without the rule of law economic development will suffer, as several studies have confirmed.10

Three pillars of the rule of law Having argued that the rule of law is crucial for democratic development and economic growth, the question arises how the rule of law can be established

6

The State of Law in the South Caucasus

and promoted in the long run. Building on the work of Robert Dahl, I contend that the rule of law is erected on three mutually dependent pillars, namely effective state institutions and horizontal accountability, social constraints and civil society, and a supportive political culture.11 The rule of law requires an independent legal profession; honest, competent and apolitical law enforcement; and an independent judiciary that is qualified and empowered to review the legality and constitutionality of executive and legislative action.12 All three requirements necessitate a strong state, defined as a state that is autonomous enough to make decisions independent from particular interests and able to implement these decisions, preferably with societal support. Yet post-Soviet states are notorious for being weak and incapable of defending the rights and liberties of their citizens. As Stephen Holmes rightly put it: The principal lesson of the end of communism is not that state power endangers liberal rights, but exactly the contrary, that liberal rights are wholly unrealizable without effective extractive, administrative, regulative, and adjudicative authorities. Rights protection and enforcement depend on state capacities. Statelessness, therefore, means rightlessness.13 There are numerous factors that could undermine a state’s strength. In the former Soviet Union, several states – including the three South Caucasian countries under study here – suffered from political turmoil and ethnic conflict in the wake of the collapse of Soviet rule, culminating in prolonged civil or ethnic wars. Interestingly, even after the end of these wars, most states have not been able to regain their strength. One of the reasons for this frailty is the fact that the post-Soviet state rarely acts as a cohesive entity. In fact, it has often disintegrated into separate fiefdoms run by state officials who are motivated primarily by private gain and not by the public good. In Western democracies, violations of official duties are usually kept under control through a system of checks and balances, or what Guillermo O’Donnell calls ‘horizontal accountability’: In institutionalized [civil] democracies, accountability runs not only vertically, making elected officials answerable to the ballot box, but also horizontally, across a network of relatively autonomous powers (i.e., other institutions) that can call into question, and eventually punish, improper ways of discharging the responsibilities of a given official.14 This internal system of disciplining insubordinate officials is greatly augmented by external control exercised through societal groups. As several scholars emphasize, civil society is a vital ingredient of democratic rule. Civil groups play an important role in monitoring state officials, chastising any wrongdoings of officials, and bringing these violations to court.15 Indeed,

Clash of Institutions 7

the expertise of watchdog groups is often solicited by state officials who regularly meet with civil society representatives to gather additional information about the performance of various state agencies. Needless to say, the institutions of horizontal and vertical accountability remain empty shells as long as citizens and officials do not value the rule of law and are not willing to fight for it. John Reitz nicely elucidates this point: No set of legal institutions, processes, and substantive rules of public and private laws will be effective to do the things claimed for the rule of law, unless there is a legal culture – i.e., a combination of practices and attitudes concerning the law and legal system – that is supportive of the rule of law.16 In short, a legal culture, combined with a strong civil society and an elaborate system of checks and balances that constrain individual state institutions, but do not undermine state capacity, are essential for establishing and developing the rule of law. Figure 1.1 illustrates the arguments made in this and the previous section. Unfortunately, the Soviet regime did not support the development of these three pillars. State repression of independent voices crippled civil society. The overbearing role of the Communist Party (CP) in the state-party apparatus made a mockery of any formal division of power. It also ridiculed the notion of an independent judiciary, as the court system was considered ‘an instrument of the political arm of the ruling class’ and was subordinate to the interests of the CP. ‘Consequently, the adjudicating role of the Soviet courts and law [was] weak.’17 Unfortunately, the Soviet Union not only left

Political rights & civil liberties

Democratic culture

Civil society

Horizontal accountability

RULE OF LAW

Figure 1.1 Three pillars of the rule of law and democracy

8

The State of Law in the South Caucasus

its successor states a shaky foundation upon which to build the rule of law – it also left a legacy that has made it very difficult to build this foundation.

The development of a Soviet system of corruption One of the most devastating legacies of Soviet rule has been systemic corruption – that is, highly institutionalized and widespread corruption. The classical definition depicts corruption as ‘behavior which deviates from the formal duties of a public role because of private-regarding (personal, close family, private clique) pecuniary or status gains; or violates rules against the exercise of certain types of private-regarding influence.’18 Corrupt behaviour includes a range of violations, including bribery, extortion, nepotism and embezzlement. The Soviet political and economic system provided a fertile soil for corrupt behaviour. Literally all goods and services, which were usually in short supply due to the inefficiencies of the command economy, were distributed through the Soviet state-party apparatus. Its officials thereby enjoyed a significant amount of discretion that they exercised without much external or political oversight. Moreover, the CP failed to provide an effective safeguard against corrupt activities in the state structure. In fact, the two hierarchies, party and state, often collaborated in these activities. In a nutshell, Soviet officials had ample opportunity to better their income through the solicitation of bribes, and it was rather unlikely that they would be punished for doing so. Only a few of them accordingly resisted the temptation. As Konstantin Simis, a Jewish émigré, puts it: ‘In the 60 years of the Soviet Union’s existence, the country had gradually become more and more rotten with corruption, and in the 1960s and 1970s it turned into a kleptocratic state … It can [therefore] be stated without fear of exaggeration that the average Soviet citizen is accompanied by bribery from womb to tomb.’19 Yet it was not just the sheer extent of corrupt activities that characterized the Soviet system of corruption. It was also the fact that corrupt officials and citizens increasingly followed informal rules and norms that were embedded in clientelist networks, which permeated the entire Soviet apparatus. James Scott defines clientelism as a special case of dyadic (two-person) ties involving a largely instrumental friendship in which an individual of higher socioeconomic [or political, C.S.] status (patron) uses his own influence and resources to provide protection or benefits, or both, for a person of lower status (client) who, for his part, reciprocates by offering general support and assistance, including personal services, to the patron.20 Patron–client relationships may extend well beyond two individuals, forming large networks, which involve many actors at various hierarchical levels. In this vertical extension of dyadic ties, everyone – excluding the individuals at

Clash of Institutions 9

the very top and the very bottom of the pyramid – is patron and client at the same time.21 In addition to the vertical extension of clientelism, a clientelist system also extends horizontally, connecting various individuals of the same socioeconomic or political status. These horizontal ties provide mutual support and protection, and allow individuals to coordinate their activities. In the Soviet Union, such an elaborate system developed around the opportunities for making illicit gains through corruption. Since most of these opportunities were related to official positions in the state-party apparatus, myriad clientelist networks developed that overlapped with the formal institutions of this apparatus. Through these networks, public offices were sold, bribes were taken and shared with higher officials, and protection was granted from the top of the pyramid to the bottom. Protection was provided by involving officials in the CP and various state agencies through horizontal ties, connecting the various pyramids of corruption. Specific rules and norms guided the behaviour of individual officials. It was generally known and understood by officials and citizens alike how much needed to be paid in the form of bribes to receive certain goods and services (e.g. a permit to move into a bigger flat, a travel permit, a driver’s licence, etc.). These informal rules and norms provided an astounding degree of order in the corrupt system and provided its participants with set expectations and incomes depending on their official positions in the Soviet apparatus. F. J. M. Feldbrugge nicely captures this overlap of formal and informal hierarchies: The Soviet elite has a pyramidal structure, endowed with ample privileges, and a broad base of millions of ordinary party members to whom a modest participation in the benefits of the system is granted, together with the expectation of advancement. It is this hierarchically constructed pyramid, which is the true owner of all power and wealth in the USSR.22 The Soviet republics of the South Caucasus were no exception to the Soviet system of corruption. In fact, several reports indicate that Armenia, Azerbaijan and Georgia were amongst the most corrupt. Under the rule of Vasili Mzhavanadze in Georgia, Karen Demirchian in Armenia and Heydar Aliyev in Azerbaijan, corruption festered within the state-party apparatus and reached the highest levels of the CP. In regard to Georgia, Simis observes that ‘a reckless orgy of corruption was raging almost openly in Georgia.’23 In Georgia and Azerbaijan, the office of a district public prosecutor was sold for about 15 000 rubles, the position of chief of district militia for about 50 000 rubles, and the post of a first secretary of the CP’s district committee for roughly 200 000 rubles.24 Since the official salary of Soviet officials rarely exceeded 300 rubles per month, these positions must have generated enormous illegal income. Part of this income was shared with superior officials who in turn would turn a blind eye to their inferiors’ illegal activities.

10 The State of Law in the South Caucasus

Moreover, the various militia chiefs, prosecutors and CP officials often colluded to provide mutual protection. After all, corruption was considered a serious crime during Soviet times, and Moscow’s occasional clean-up campaigns executed through the KGB were feared. Yet even the KGB did not deter some officials from using the corrupt networks as covers for ‘not only ordinary corruption but also for much graver crimes – torture, lawless imprisonment and murder’.25 The breakdown of Soviet rule partially undermined the Soviet system of corruption and its corresponding rules and norms. Yet clientelism and corruption have proven to be highly resilient against the rapid changes of the 1980s and 1990s, leaving post-Soviet societies with formidable obstacles to develop the rule of law.

Post-Soviet corruption and the rule of law The breakdown of the CP and with it the collapse of the state-party apparatus clearly disrupted the system of corruption, taking into account that formal and informal hierarchies largely overlapped. Moreover, the advent of capitalism, privatization, liberalization and a cash economy undermined the corrupt rules and norms. Opportunities for corruption dried up in some areas (e.g. in most parts of the economy due to the abolishment of the State Planning Committees), and new ones arrived in other sectors – for example, insider deals often tainted the privatization process, benefiting a small elite at the expense of the public good. Moreover, new local currencies and the inflow of foreign (hard) currencies made it necessary to set new prices for corrupt deals. At the same time, the change from a barter to a cash economy made it easier to solicit bribes and to hide the illicit gains (e.g. in Swiss bank accounts). Many citizens of the former Soviet Union, whom I interviewed between 1998 and 2003, claimed that officials had become greedier and that personal connections mattered less than before the collapse of the Soviet Union. In general, these citizens thought that corruption had spun out of control and become more malicious. Despite this (temporary) unrest, the corrupt networks of Soviet times demonstrated a significant degree of durability and adaptability. Tatiana Vorozheikina states: The new patron–client relations were created as an overgrowth atop the former nomenklatura system of clientelistic relations, which in general had been destroyed only at its upper levels. At the middle and lower levels these relations quickly regenerated … The old and new systems of clientelistic relations quickly fused, with access to public and private goods still largely the objects of clientelistic exchange. These goods included government jobs, housing, medical services, and economic resources.26 The resilience of clientelism is not very astonishing, taking into account that these networks provided stability and material security to many officials and

Clash of Institutions 11

a few privileged citizens in times of political turmoil and economic hardship. Moreover, officials had a keen interest in maintaining corrupt networks that provided crucial information and access to economic resources. The winners of the transition period were therefore often the same individuals who had already done very well during Soviet times. Furthermore, government officials relied on clientelism and patronage to shore up political support during turbulent times, as Ian Bremmer and Corry Welt argue in regard to Armenia’s first post-Soviet government under President Levon Ter-Petrosian: The government’s basic strategy was to create extensive patron–client networks. Building on connections they had developed during the war years, ANM [Armenian National Movement] leaders acquired influence among substantial groups of industrialists, businessmen, and bureaucrats. By pledging loyalty to their patrons and involving them in the profitmaking of a business or a government strategy, these individuals were assured survival in Armenia’s uncertain economic and political climate.27 The judicial and law enforcement institutions stand out among the most corrupt state agencies in the South Caucasus (and most other post-Soviet countries, for that matter). Several polls show that Armenian and Georgian citizens rank the police and the courts as the least trustworthy state agencies.28 Indeed, corrupt networks – and their underlying rules and norms – have maintained a strong hold over these formal institutions. For instance, the sale of offices in the police forces of Armenia and Georgia is widespread. In Yerevan, the office of a low-level traffic police officer costs anywhere between US$2000 and 5000. In addition, every traffic police officer pays about US$10 each day to his superior, who shares this illicit income with his superior, and so forth. Taking into account that a police officer in Armenia earns less than US$60 a month, it is obvious that he or she needs to rely on extracting bribes to make a living and to recover the initial investment that was paid to get his or her job. Unlike in Armenia, where the government has kept the hiring process somewhat under control, the practice of selling offices has caused the Georgian police force to expand by two to three times since independence. Needless to say, the ethical standard of the Georgian police force has suffered from the influx of greedy individuals.29 Driven by the common goal to collect illicit gains, police officers are unlikely to blow the whistle and would probably be in grave danger if they did so. Dimitry Gelovani, a Georgian journalist, aptly summarizes the ‘code of honour’ among Georgian police officers: The mentality of the policeman, which has become above all the honour of the uniform, differs hardly at all from the mentality of the criminal: the greatest sin among policemen is considered to be not bribe-taking (that is something normal), nor beating the innocent (also something normal), but informing on a crooked colleague. In short, the Georgian police remains

12 The State of Law in the South Caucasus

one of the isolated little islands of totalitarianism, supported by the nihilism of society when it comes to matters of law.30 This camaraderie has allowed police officers to extort bribes and to commit other violations of official duties (e.g. the use of excessive force) with impunity. In Georgia, police officers from various precincts in Tbilisi repeatedly incarcerated and tortured individuals to extort money from family members. On none of these occasions were the responsible officers disciplined.31 Police officers could violate citizens’ rights and liberties with an ‘apparent lack of fear that they would be identified and punished’, because of the complicity of public prosecutors and judges.32 In fact, collusion between the police, public prosecutors, judges and – as discussed in Chapter 5 – lawyers is widespread in the Eurasian successor states of the Soviet Union. To receive justice in the courtroom often means to pay a bribe. Bribes are also effective means to stop legal investigations and to receive acquittals. Finally, it is not uncommon for shady businessmen to pay off police officers and prosecutors who in return will freeze bank assets of competitors or arrest competitors on fabricated charges (e.g. illegal possession of firearms and/or drugs). Either way, a bribe can be very successful in creating and maintaining a business monopoly. Usually, these illicit payments are shared among the officials that are involved in the transaction. For instance, the bribe of a suspect in pre-trial detention is usually shared between the lawyer (who delivers the bribe), prosecutor and judge, each party receiving a third of the payment intended to get the suspect out of prison.33 The pervasiveness of corruption in the legal system points towards the weakness of the rule of law in the South Caucasus. However, taking into account that corruption is systemic in the region, maintained through myriad clientelist networks, it is safe to conclude that corruption and clientelism are formidable obstacles to the establishment of the rule of law. They undermine the rule of law because they target its very foundation – horizontal accountability, a strong civil society, and the development of a legal culture. Of course, considering the tremendous political influence that governments exert over the legal system (especially in Armenia and Azerbaijan), corruption is just one obstacle to the rule of law. Yet for ordinary citizens, who usually avoid coming into conflict with their governments, it is likely to be the biggest threat to their rights and liberties. First, clientelist networks overcome any form of official oversight and horizontal accountability, allowing police officers, judges and prosecutors to violate their official duties with impunity. This situation leaves citizens with few honest officials who would be able or willing to protect their rights, considering that whistleblowers live a dangerous life. It also means that citizens have to rely on bribes to get anything achieved. Of course, this contradicts the very core of the rule of law – namely, the notion that everyone is equal before the law. As the former chairman of the anti-corruption commission of

Clash of Institutions 13

the Georgian Parliament explains: Corruption is a way of life. People don’t believe that the state will ever provide services or enforce the law, so they don’t pay taxes. There are only two ways to survive here. To become financially strong yourself, or to place yourself under the protection of someone who is stronger. But there is no way to be a citizen; there is only a kind of feudalism, in politics, government and business.34 In regard to the second pillar of the rule of law, clientelism and corruption have had a debilitating impact on the development of a vibrant civil society. In the past, several scholars argued that corruption would provide civic groups with an informal way to influence public policies ‘unobtrusively through the back door’.35 If there is no other channel of exerting influence, corruption might indeed be the only option to advance one’s interest. Yet if other channels exist, even if they are only rudimentary, corruption will reduce the importance of these channels and undermine their development. Why should a businessman join an interest group if a bribe is more efficient? In other words, corruption discourages collective action and thereby the formation of strong interest groups. In his seminal work about the (under-) development of Russia’s civil society, Steven Fish nicely argues that a weak state triggers a weak civil society.36 The South Caucasian cases provide additional evidence for this argument. Furthermore, as a human rights activist revealed to me, parts of the Georgian government conspired with civic groups in the embezzlement of foreign aid. In order to avoid the annoyance of dealing with greedy civil society representatives, Armenian politicians have set up non-governmental organizations (NGOs) themselves to benefit from tax breaks and foreign assistance.37 In short, as long as systemic corruption undermines the development of strong and independent civic groups in the South Caucasus, civil society will only be a weak ally in strengthening the rule of law. Finally, systemic corruption provides only arid soil for the development of a legal culture. Corruption under Soviet rule caused the development of what Simis calls ‘two separate systems of morality’.38 On one hand, citizens trusted their friends and relatives, and usually abstained from betraying or stealing from them. On the other, Soviet citizens gave bribes to state officials with little moral concerns despite their tremendous mistrust of those officials. At the same time, citizens’ acceptance of the corrupt rules did not necessarily imply that they were willing accomplices. In fact, Soviet citizens had little choice. If the same kind of corrupt system is still in place, which we can safely assume, it is unlikely that post-Soviet citizens are more inclined to adopt values and norms supportive of the rule of law. State officials are even less likely to adopt a legal culture, taking into account that the corrupt system feeds these state officials who would otherwise be forced to live on an official income below the poverty level.

14 The State of Law in the South Caucasus

In sum, systemic corruption is probably the biggest scourge of the rule of law in the South Caucasus and most other Soviet successor states.39 Indeed, the corrosive effect of corruption is a common theme throughout this book. With this assessment in mind, the crucial question becomes how can governments fight systemic corruption, assuming that they have the political will to do so.

Promoting the rule of law – fighting systemic corruption It is one of the paradoxes of effective governance that corruption undermines the rule of law, but that at the same time the establishment of the rule of law is necessary to fight corruption. Strengthening the three pillars of the rule of law will therefore be an arduous task, running counter to the material interests of top officials who benefit greatly from the corrupt system. Yet any success in bolstering civil society, horizontal accountability and a legal culture is also an important step towards debilitating corruption, which will prepare the ground for further advances towards the rule of law. In short, fighting corruption and promoting the rule of law are not only opposite sides of the same coin but also mutually reinforcing endeavours. Strengthening civil society and improving horizontal accountability have been the main strategies in promoting the rule of law and fighting corruption. Taking into account that beliefs and attitudes only change slowly from one generation to the next, there have been few attempts to strengthen the third pillar of the rule of law. Unfortunately, despite much fanfare, the governments of the South Caucasus have until recently lacked the political will to fight corruption in a serious and consistent way, continuing the Soviet practice of tolerating corruption. During Soviet times, anti-corruption purges were infrequent and often driven by political purposes – namely, by attempts to discredit political opponents. Moreover, these purges rarely targeted the top leaders in the Soviet republics. The purges in Georgia and Azerbaijan in the 1970s and in Central Asia in the 1980s were exceptional, made possible by political changes in Moscow (culminating in the appointment of Gorbachev to the post of General Secretary). In the usual course of events, however, Moscow turned a blind eye to the corrupt activities of the CP leadership in the Soviet republics in order to maintain their political allegiance to the central government.40 Corruption has been used in much the same way as a tool to secure political loyalty after the fall of Soviet rule. Eduard Shevardnadze, whose political position as Georgia’s president was always precarious in the light of two attempts on his life (1995 and 1998), tolerated widespread corruption within the ‘power ministries’ because of his dependence upon their loyalty. Jaba Devdariani states: Interior and state security ministry forces played important roles in helping President Shevardnadze regain power in Georgia in 1992, and then in

Clash of Institutions 15

stabilizing the country during the mid 1990s. However, many Georgians believe that in recent years the power ministries had emerged as obstacles to reform. Some also worried about the Interior Ministry’s ability to influence domestic policy.41 Ter-Petrosian tacitly accepted the corrupt activities of his Interior Minister, Vano Siradegian, who successfully curbed mafia activities by taking over their shady businesses. In Azerbaijan, the Aliyev clan built its political base by distributing oil wealth among friends and cronies.42 Yet even during the 1990s, which are generally considered lost years in terms of fighting corruption and establishing the rule of law, governments initiated some anti-corruption measures. In Georgia, the pressure of the young reformist wing within the presidential party and international financial organizations prompted Shevardnadze to agree to a thorough reform of the legal system, which included the introduction of qualification examinations for judges, combined with higher salaries. In another attempt to eradicate corruption, the Georgian government radically privatized commercial land, streamlining the privatization process to a degree that sharply reduced bureaucratic red tape.43 In Armenia, the necessity to provide the central government with revenues to support Nagorno-Karabakh’s struggle for independence against Azerbaijan had a disciplining effect on the bureaucracy. Ter-Petrosian and his successor Robert Kocharian centralized corruption into the hands of top government officials (e.g. Defence Minister Serge Sargsian), thereby keeping corrupt activities somewhat under control.44 In fact, Transparency International, an anti-corruption think-tank, ranks Armenia among the least corrupt countries of the former Soviet Union.45 Only the Azeri government, whose country’s oil wealth enables it to ignore international and domestic pressure for reform, has so far failed to initiate any serious anti-corruption reforms. Not counting Azerbaijan, anti-corruption reforms have developed new impetus in the South Caucasus since 2003. The ‘Rose Revolution’, which replaced former communist apparatchiks with young reformers, has opened up political space for an exhaustive anti-corruption campaign. The country’s new president Mikhail Saakashvili is adamant about uprooting the corrupt system. In the wake of the inauguration of the new Georgian government, several former government officials were arrested on corruption charges. Moreover, several lower-ranking state officials were disciplined for soliciting bribes. Yet, as Saakashvili rightly understands, targeting individual officials is not enough. Fighting corruption needs systemic changes: [These measures] will not last forever. Either [police officers] starve like this, or they will quit their job. Or they will resume their practices, which is more likely. What we need to do together with punishment is to give them higher salaries and to cut the number of officers. My dream is to have a policeman quitting his job, opening a grocery market around his corner

16 The State of Law in the South Caucasus

and have honest income. What we have right now in Georgia is an acting policeman opening a shop and not allowing anyone else to open it. This is a totally different system, right. So, we are changing this kind of system.46 In Armenia, government officials have regularly met with several NGO representatives under the auspices of the Organization for Security and Cooperation in Europe (OSCE) to develop a comprehensive anti-corruption strategy. This strategy has since been watered down, as it went through the approval process of the various state agencies, but it still has enough teeth to cause a significant reduction in corrupt activities (though it will probably not reduce the corrupt activities of top government officials). In short, the Armenian and Georgian governments are currently expressing the political resolve to improve the rule of law and tackle corruption head-on. In order to debilitate the corrupt networks that are undermining horizontal accountability and official oversight, the authority over hiring and promotion has to be placed under a separate state committee composed of well-paid officials and citizens. Moreover, salaries of officials should be raised to a level that enables them to live in comfort. This will probably require a significant reduction of the state bureaucracies, which are bloated and ineffective. In regard to the second pillar, civil society, governments should take civic groups seriously and include them in the policy-making and implementation processes, which would increase governmental efficiency and legitimacy. Moreover, civil society and the media still lack full access to government documents that they need to become effective watchdogs. In Georgia, civil society has gained in status and influence due to Saakashvili’s rise to power. The Armenian government, in contrast, is still greatly suspicious of NGO activities. It also seems important to provide citizens with a better understanding of bureaucratic procedures and their rights vis-à-vis state officials. Corruption often thrives on the ignorance of citizens.47 Finally, anti-corruption campaigns often run into quicksand, facing stiff resistance from corrupt officials who sabotage any measures that would deprive them of their illicit gains. Facing this resistance, governments often concede defeat, especially if top government officials are the primary beneficiaries of the corrupt system. It is therefore crucial to maintain constant pressure on the government from both ‘above’ (the international community) and ‘below’ (civil society). Moreover, reforming state bureaucracies usually comes with a hefty price tag, which cannot be covered by governments alone. The financial support of the international community is therefore urgently needed in the fight against corruption.

Conclusion Considering corruption as an indicator of the feebleness of the rule of law grossly underestimates the independent power of systemic corruption. In the

Clash of Institutions 17

South Caucasus, as well as in other Soviet successor states, widespread and highly institutionalized corruption is the pervasive legacy of Soviet rule. The corrupt rules and norms that are embedded in the clientelist networks that pervade the state apparatus weaken the three pillars on which the rule of law is built: state capacity and horizontal accountability, civil society and a legal culture. Yet without the rule of law democratic transitions will remain shallow and economic growth will be unsustainable. Moreover, systemic corruption widens the gap between rich and poor so that economic growth will not foster human development. It is heartening to see that at least the Armenian and Georgian governments have understood the need to tackle corruption. At present, they appear to be determined to tackle corruption as the biggest obstacle to the development of the rule of law. Yet they will need all the support they can get from the international community and their societies to bring down their systems of corruption.

Notes 1. Freedom House, Nations in Transit (1998–2004). Available at http:// freedomhouse.org/research/nattransit.htm. 2. See D. Collier and S. Levitsky, ‘Democracy with Adjectives: Conceptual Innovation in Comparative Research’, World Politics, 49 (1997), p. 430. 3. Ibid. The Nations in Transit rating of the ‘Constitutional, Legislative and Judicial Framework’ in East Central Europe and Eurasia is available at http:// freedomhouse.org/research/nitransit/2004/clj2004.pdf. On a scale between 1 and 7, with 1 being the best and 7 the worst, Armenia, Azerbaijan and Georgia receive a rating of 5.00, 5.50 and 4.50, respectively, trailing far behind the Central European countries, which receive an average rating of 1.88. 4. R. Dahl, A Preface to Democratic Theory (Chicago: Chicago University Press, 1956). 5. T. Carothers, ‘The Rule of Law Revival’, Foreign Affairs, 77 (2) (1998), p. 96. 6. Vienna Declaration, part I, para. 8. Available at http://www.unhchr.ch/ huridocda/huridoca.nsf/(Symbol)/A.CONF.157.23.En?OpenDocument. 7. See R. Dahl, Polyarchy, Participation and Opposition (New Haven: Yale University Press, 1971), p. 2. 8. J. Donnelly, ‘Human Rights, Democracy and Development’, Human Rights Quarterly, 21 (1999), pp. 608, 620. 9. The United States serves as a clear example of democratic regression, taking into account the deplorable levels of political engagement among the lower strata of the American society. 10. For example, P. Mauro, ‘Corruption and Growth’, The Quarterly Journal of Economics (1995), p. 681. 11. Supra note 4. 12. J. R. Reitz, ‘Constitutionalism and the Rule of Law: Theoretical Perspectives’, in R. D. Grey, ed., Democratic Theory and Post-Communist Change (Upper Saddle River: Prentice Hall, 1997), p. 113. 13. S. Holmes, ‘Cultural Legacies or State Collapse? Probing the Postcommunist Dilemma’, in M. Mandelbaum, ed., Postcommunism: Four Perspectives (New York: Council on Foreign Relations, 1996), p. 56. 14. G. O’Donnell, ‘Delegative Democracy’, Journal of Democracy, 5 (1994), p. 61.

18 The State of Law in the South Caucasus 15. See, for example, L. Diamond, ‘Toward Democratic Consolidation’, Journal of Democracy, 5 (1994), p. 4. 16. Reitz, supra note 12 at p. 116. 17. D. Lane, State and Politics in the USSR (New York: New York University Press), p. 192. 18. J. S. Nye, ‘Corruption and Political Development: a Cost-Benefit Analysis’, American Political Science Review, 61 (1967), p. 421. 19. K. Simis, ‘The Machinery of Corruption in the Soviet Union’, Survey, 22 (1977), pp. 46, 55. 20. J. Scott, ‘Patron–Client Politics and Political Changes in Southeast Asia’, in S. Schmidt et al., eds, Friends, Followers, and Factions: a Reader in Political Clientelism (Berkeley: University of California Press, 1977), p. 124. 21. Ibid. at p. 127. 22. F. J. M. Feldbrugge, ‘Government and Shadow Economy’, Soviet Studies, 36 (1984), p. 532. 23. K. Simis, USSR: the Corrupt Society (New York: Simon & Schuster, 1982), p. 55. 24. Supra note 18 at p. 42. M. Voslensky, Nomenklatura: the Soviet Ruling Class (Garden City: Doubleday, 1984), p. 188. 25. J. Tarkowski, ‘Old and New Patterns of Corruption in Poland and the USSR’, Telos, 80 (1989), p. 54. 26. T. Vorozheikina, ‘Clientelism and the Process of Political Democratization in Russia’, in L. Roniger and A. Günes-Ayata, eds, Democracy, Clientelism, and Civil Society (Boulder: Lynne Rienner, 1994), p. 113. 27. I. Bremmer and C. Welt, ‘Armenia’s New Autocrats’, Journal of Democracy, 8 (1997), p. 83. 28. Georgian Corruption Research Centre (in collaboration with UNDP), Investigation of Corruption Problems in Georgia (Tbilisi, Georgia, 1998); A. Aghumian, Corruption in Transitional States: Political, Economic, Legal and Cultural Dimensions. Case Study of Armenia (Yerevan: Organization for Security and Cooperation in Europe, 2002). 29. All of this information is derived from interviews that I conducted with Armenian and Georgian human rights activists, lawyers, state officials and entrepreneurs over the course of several years (from 1998 until 1999 in Georgia, and in 2003 in Armenia). In order to protect my sources, no further information about my interviewees is provided. 30. D. Gelovani, ‘Georgia: Police and Thieves’, IWPR’s Caucasus Reporting Service (3 June 1999). Available at http://www.iwpr.net. 31. US Department of State, Country Reports on Human Rights Practices: Georgia (1999). Available at http://www.state.gov/www/global/human_rights/1999_hrp_report/ georgia.htm. Human Rights Watch, ‘Letter to Mr. Kakhaber Targamadze, Minister of Internal Affairs, and Procurator General Hamlet Babilashvili from May 11, 1998’, unpublished. 32. Human Rights Watch, World Report 2000: Georgia. Available at http:// www.hrw.org/wr2k/Europe/Georgia.html. 33. This seems to be a common practice throughout the former Soviet Union, as my research in Armenia, Georgia and Uzbekistan indicates, leading me to the conclusion that this practice was already deeply rooted in the Soviet legal system. 34. D. Usupashvili, cited in A. Lieven, ‘Georgia: a Failing State?’, Eurasia Insight (30 January 2001). Available at http://www.eurasianet.org/departments/insight/ articles/eav013001.shtml. 35. J. Scott, Comparative Political Corruption (Englewood Cliffs: Prentice Hall, 1972), p. 508. 36. S. M. Fish, Democracy from Scratch (Princeton: Princeton University Press, 1995).

Clash of Institutions 19 37. A. Ishkanian, ‘Civil Society in the Caucasus: the Role of NGOs in Armenia’, paper presented at the IREX Caucasus Regional Policy Symposium 2004 (27 March 2004). Available at http://www.irex.org/programs/completed/conferences/symposium04/ Ishkanian.pdf. 38. Supra note 22 at p. 289. 39. How big a scourge ultimately depends on several political and economic factors that are further discussed in C. H. Stefes, ‘Systemic Corruption as an Intervening Variable in Post-Soviet Political and Economic Transitions: Armenia and Georgia in Comparison’, paper presented at the IREX Caucasus Regional Policy Symposium 2004 (27 March 2004). Available at http://www.irex.org/programs/ completed/conferences/symposium04/Stefes.pdf. 40. I. Bremmer, ‘Post-Soviet Nationalities Theory: Past, Present, and Future’, in I. Bremmer and R. Taras, eds, New States, New Politics: Building the Post-Soviet Nations (New York: Cambridge University Press, 1997), p. 3. 41. J. Devdariani, ‘Georgia’s New Ministers of Interior, State Security Grapple with the Legacy of Mistrust’, in Eurasia Insight (28 November 2001). Available at http://www.eurasianet.org/departments/insight/articles/eav112801a.shtml. 42. M. Ottaway, Democracy Challenged: the Rise of Semi-Authoritarianism (Washington, DC: Carnegie Endowment for International Peace, 2003), p. 61. 43. For an extensive analysis of the Georgian system of corruption under Shevardnadze, see C. H. Stefes, ‘The Incompatibilities of Institutionalized Corruption and Democracy in the Former Soviet Union: the Case of Georgia’ (PhD diss., University of Denver, 2002). 44. For a detailed discussion of Armenian and Georgian corruption, see C. H. Stefes, Understanding Post-Soviet Transitions: Corruption, Collusion and Clientelism (Basingstoke: Palgrave Macmillan, forthcoming). 45. Transparency International, Transparency International Corruption Perceptions Index 2003. Available at http://transparency.org/cpi/2003/cpi2003.en.html. 46. M. Saakashvili, speech at School of Advanced International Studies (SAIS), Washington, DC (24 February 2004). 47. For a list of anti-corruption measures, see Stefes, supra note 42, ch. 9.

2 ‘Georgians Cannot Help Being Original’:1 the Evolution of Election Rules in the Republic of Georgia Erik S. Herron and Irakli G. Mirzashvili

Introduction ‘It doesn’t matter who votes, but who counts the votes’ (attributed to Joseph Stalin)2 Just as Georgia’s most infamous son expressed cynicism about elections, so too have observers of electoral practices in the contemporary South Caucasus. International and domestic organizations have bemoaned the prevalence of biased media coverage, arbitrary and opaque decision-making, as well as outright vote theft. Credible claims of improper practices have dogged presidential, parliamentary and local elections in Armenia, Azerbaijan and Georgia. But, public protest over unfair elections generally has been ignored or repressed. Armenia’s presidential and parliamentary elections in Spring 2003 and Azerbaijan’s presidential election in autumn 2003 fell short of international standards for the fair casting and counting of ballots. The opposition to President Robert Kocharian organized mass rallies to protest vote theft in Armenia. Political opponents of Ilham Aliyev did the same in Azerbaijan after his election victory under highly questionable circumstances. In both cases, the authorities repressed protesters with threats, violence and arrest. Ultimately, the opposition was unable to achieve its goals. Georgia’s November 2003 ‘Rose Revolution’ fundamentally violated the conventional wisdom about public protest, political efficacy, and the consequences of election fraud in post-Soviet South Caucasian states. Whether or not the Rose Revolution proves to be an anomaly or inspires activism elsewhere, the movement’s success refocuses attention on election quality in the post-communist world.3 In the wake of Eduard Shevardnadze’s ousting, Georgia’s interim government reconfigured its elections infrastructure, ejected officials who perpetrated 20

Election Rules in the Republic of Georgia 21

fraud, updated procedures to undermine vote manipulation, and organized new presidential and parliamentary elections. While the election law was modified to account for the extraordinary conditions of the 2004 election cycle, the core of Georgia’s election law was preserved from the previously adopted Unified Election Code. Georgia’s politicians have modified the election rules many times since 1990, changing the size of Parliament, nomination requirements, campaign regulations, electoral formulae, thresholds, ballot structure, oversight mechanisms and dispute adjudication procedures. Clear and comprehensive election laws, and their appropriate implementation, are essential building blocks for democracy and the rule of law. Our chapter traces the evolution of Georgia’s parliamentary election law, focusing on how rule changes have addressed citizens’ voting rights, ballot access for parties and politicians, the conduct of campaigns, the translation of votes into seats, and oversight processes. We evaluate statutory changes governing elections as well as their practical impact on politics in Georgia. In this way, our chapter synthesizes the study of elections and the rule of law. The chapter is divided into four sections. We initially outline the literature about election rules and their consequences, drawing upon political science research. After providing a brief political history of elections and their results, we assess election rule change over time by comparing laws adopted for Georgia’s 1990, 1992, 1999 and 2003/2004 parliamentary elections.4 Recognizing that the formal rules have often failed to fully constrain behaviour, especially governmental behaviour, we discuss the results of parliamentary elections over the last fifteen years and assess how well the election code has been implemented. Finally, we conclude with commentary on Georgia’s electoral practices, problems and their potential remedies in light of the 2003 Rose Revolution.

Why are election rules important? Election rules and their effects on political competition have been a central concern for political scientists for decades. Some scholars have argued that electoral studies have produced the most coherent research programme in political science.5 The origins of this literature can be traced to the work of Maurice Duverger,6 who articulated the basic relationship between election rules and the number of competitive political parties contesting elections. Duverger’s propositions focus particular attention on the electoral formula. According to Duverger, single-member district systems (SMDs) with plurality rules (like those found in the United States and United Kingdom) should produce two strong candidates or parties over time.7 By contrast, majorityrunoff or proportional representation (PR) rules should create conditions favouring multiparty competition. While some scholars dispute the connection between rules and the party system,8 and others have introduced corollaries to account for perceived anomalies,9 Duverger’s general expectations have proven to be reasonably robust.

22 The State of Law in the South Caucasus

Scholars have also noted that other features of election rules affect the strategic environment facing political actors, influencing the nature of competition. In addition to the electoral formula, assembly size, thresholds, ballot structure and district magnitude have been identified as critical elements of election system design.10 Researchers have also expanded the list of important rules, noting that all aspects of election administration, including suffrage rules, nomination requirements and electoral commission composition and powers affect political competition.11 Ancillary rules, like those dictating registration requirements for official non-governmental organizations, may also affect the electoral environment.12 Formal provisions that set the ground rules for elections have important consequences for the evolution of political competition. Not only have political scientists recognized the relationship between rules and outcomes, so too have political actors in the post-communist world. The initial form of election rules has reflected the desires of political elites to gain and maintain power, and politicians have regularly modified the rules to advantage themselves vis-à-vis their opponents.13 Election rules have been volatile in post-communist states14 and the Republic of Georgia has been no exception. Indeed a similar assessment is made of Azerbaijan’s experience in the next chapter. Georgia has modified its election rules many times in four major conceptual categories: barriers to entry for voters and contestants; campaign regulations; translation of votes into seats; and oversight mechanisms. Barriers to entry dictate who may participate in elections as voters, candidates and political parties.15 Election legislation typically notes the minimum age for full franchise rights, conditions under which voting rights are denied, procedures for citizens to register as voters, and special accommodations for indigent or isolated voters. Candidates and parties are often required to collect signatures or provide a deposit for ballot access. To register as a party, a group may have to submit documents to a government ministry, identify membership information and disclose its financial, personnel, technical or material resources. Appropriate forms of campaigning are generally identified in election rules. Legislation may note sanctioned forms of solicitation, access to the media, the role of public opinion polling or other methods of canvassing potential supporters. Campaign finance is also generally controlled through election rules, including requirements about disclosing personal assets and managing funds designated to support campaigns. The translation of votes into seats encompasses the features of election rules most commonly addressed in the scholarly literature: formula, thresholds, assembly size, ballot structure and district magnitude. Oversight and adjudication provisions affect the competitive environment and are also included in election legislation. Electoral commissions at the national, regional and/or local levels administer polling stations, collect ballots, count

Election Rules in the Republic of Georgia 23

and aggregate results, and manage disputes. These organizations often determine if candidates or parties are admitted to the ballot, or if they should be removed from competition. Before assessing election rule change in Georgia in our four conceptual categories, we summarize Georgia’s turbulent electoral history. The following section outlines Soviet and post-Soviet elections through the extraordinary vote in March 2004.

Political context of election rule change in Georgia Mikhail Gorbachev’s institutional reform efforts in the Soviet Union included the creation of a new legislative body – the Congress of People’s Deputies (CPD). The first elections were held in March 1989. The contest for the national CPD was notable for the competitiveness of its races; 73 per cent of the district races included more than one candidate. In Georgia, however, national CPD races were less competitive. Communist Party oversight generated victories for pro-Kremlin politicians; in 43 of the 75 contests in Georgia, a single candidate contested the seat. Only in Tbilisi were the forces of reform able to gain seats.16 Subsequently, union republics held elections to local parliamentary assemblies. Georgia’s parliamentary election was initially scheduled for late March 1990. In early March, many participants in a conference of over 90 political movements and non-governmental organizations advocated a boycott of the election, or the organization of an alternative governing body. This event, coupled with the national CPD’s decision to revoke the Communist Party of the Soviet Union’s monopoly on political life, prompted a delay of the elections. Over the summer, Zviad Gamsakhurdia’s17 Round Table Coalition advocated election rules prohibiting participation by organizations that did not respect Georgia’s current boundaries or supported violent protest. The Round Table Coalition’s preferences were designed to undermine the rival National Forum and separatists. After slow movement on electoral reform prompted protests by the Round Table Coalition, a compromise was reached.18 Georgia’s Parliament adopted new election rules in August 1990. In an extraordinary departure from the national CPD elections, Georgia’s electoral rules permitted multiparty competition. In addition, Georgia was the first post-Soviet state to adopt a mixed electoral system – combining majoritarian and proportional districts in a single election. The legislative assembly consisted of 250 Members of Parliament (MPs), evenly divided into single-member districts (SMD) and nationally distributed proportional representation (PR).19 To win an SMD mandate, candidates were required to garner 50 per cent ⫹ 1 of the votes in their geographic constituency, or win a run-off contest with other candidates.20 To win seats in the PR component, parties had to pass a 4 per cent threshold.21 In elections held in late

24 The State of Law in the South Caucasus

October 1990,22 Gamsakhurdia’s Round Table won the most seats (155), followed by the Communist Party (64), Popular Front (12), Democratic Bloc (4), Liberation and Economic Revival Bloc (1), All Georgian Rustaveli Society (1) and independents (9). Seventy per cent of eligible citizens cast ballots.23 Soviet collapse and civil war in Georgia cut short the term of office for representatives to the Georgian Supreme Soviet. Soon after Eduard Shevardnadze’s return to Georgia in 1992, the State Council abandoned the mixed electoral rules used in 1990 and codified a new electoral system: the Single Transferable Vote (STV). STV allows voters to rank-order candidates in multimember districts24 and would have been used to select an 84-seat Parliament. Many politicians became concerned that STV would not produce a multiparty Parliament, but would benefit one or two strong parties. As a result, no elections were held under STV; the mixed system was readopted by the State Council in August, 1990, although shadows of STV remained.25 Another major electoral innovation was codified in 1992 – direct election of the speaker of Parliament. The 1992 elections were held in October. Eduard Shevardnadze won the uncontested parliamentary speaker’s race with substantial support among voters. The Peace Bloc, professing its connections with Shevardnadze, won the most seats in Parliament (35 seats). The October 11 Bloc, which counted prominent intellectuals among its members, finished neck and neck with the Unity Bloc, a group including intellectuals and the nomenklatura (15 seats each).26 Resistance from Gamsakhurdia supporters and separatists in Abkhazia, South Ossetia and western regions of Georgia precluded balloting in those regions. The 1995 parliamentary elections were conducted concurrently with balloting for the President. But violence, or the threat of violence, once again prevented voting in many Georgian regions. Election rules were simplified for 1995; new provisions included a national party list vote and 5 per cent threshold. In addition, preference voting was eliminated as was the requirement that voters cross off parties or candidates that they did not support. Shevardnadze’s party of power – the Citizens Union of Georgia (CUG) – placed first in parliamentary voting (111 seats). The centrist and Western-oriented National Democratic Party placed second (36). Ajarian strongman Aslan Abashidze’s Revival Union placed third (32). The main provisions of the 1995 election rules were maintained in 1999. The most notable change was an increase in the threshold on the party list ballot, from 5 per cent to 7 per cent. Shevardnadze’s CUG also placed first in 1999 (132 seats), although this contest was marred by many violations of democratic norms. Abashidze’s Revival Union finished in second place (58) followed by the business-oriented Industry Will Save Georgia (15). Once again, elections were not held in Abkhazia and other territories; Abkhaz deputies elected in 1992 were given extensions to their terms. A Unified Election Code, codified in 2001 and modified prior to the 2003 election, dictated the rules of the next parliamentary race. The main provisions

Election Rules in the Republic of Georgia 25

were similar to those used to conduct the 1999 election. The 2003 contest witnessed an even more dramatic failure to comply with democratic election standards than elections in 1999. Shevardnadze’s new political group, For a New Georgia (FNG), finished first in the official voting, followed by Revival. Opposition parties led by Mikhail Saakashvili (National Movement), and Nino Burjanadze and Zurab Zhvania (Burjanadze-Democrats) officially placed third and fifth, respectively. However, a parallel vote count conducted by the Georgian International Society for Free Elections suggested that substantial vote fraud had occurred: Saakashvili’s National Movement had placed first, followed by FNG, Labour and the Burjanadze-Democrats. Compelling evidence of election fraud galvanized the opposition. Over the course of November 2003, a series of escalating confrontations ended with Shevardnadze’s ousting. The ‘Rose Revolution’ created a new challenge for Georgia as well: the power vacuum required quickly organized new elections for President and Parliament. The three main leaders of the opposition to Shevardnadze united for the 2004 election cycle. Saakashvili was nominated as President and won the race by an overwhelming margin, facing no serious competition. The united opposition National Movement-Democrats also swept the proportional ballot held in March 2004. New elections were not held for the majoritarian races; deputies who won seats previously were allowed to retain them.27 In this section, we have described the six parliamentary elections held in Georgia since 1990, sketching the contours of the rules and their outcomes. In the following section, we assess the evolution of Georgia’s parliamentary election rules in more detail. We employ the four conceptual categories introduced above to assess how statutory requirements have defined barriers to entry for parties and voters, campaign regulations for competitors, the translation of votes into seats, and oversight and adjudication procedures.

Election rule change in Georgia28 Our analysis of election rule change in Georgia focuses on parliamentary rules. While the President is the most powerful political actor in Georgia, Parliament is the primary law-making body and is formally assigned some oversight over government (Constitution, Ch. 3). Moreover, changes in parliamentary rules provide particular insights into our four categories of election rule provisions. The following is a comparison of the main provisions of Georgia’s 1990, 1992, 1999 and 2003 election rules.29 Barriers to entry Voters Even during the communist period, suffrage rights were widely extended to adult citizens of Georgia. Election rules for the 1990 Supreme Soviet indicated that citizens aged 18 years or older were permitted to cast ballots.

26 The State of Law in the South Caucasus

However, individuals who were judged to be ‘incapable’ due to mental illness, convicts in prison, and soldiers in non-state sponsored military organizations forfeited their voting rights.30 Voting rights provisions did not change substantially in later versions of the law. Voting rolls are the official documents used by precincts to determine who is allowed to cast votes. The construction and maintenance of these documents is critical as inaccurate rolls may cause citizens to be disenfranchised and may facilitate fraud through voting by ‘dead souls’. In 1990 and 1992, the executive committees of local government were required to provide Precinct Electoral Commissions (PECs) with the necessary data for compiling the rolls. Special voter lists in in-patient medical facilities, on ships, and in consular institutions outside of the country, were to be compiled based on data from leaders of these institutions (1990, art. 32; 1992, art. 32). In addition, voters who were unable to come to the polls due to health conditions or because of confinement by the state could request to vote using a ‘mobile ballot box’ that would travel to them from the closest PEC (1990, art. 51; 1992, art. 50). Citizens could ‘protest’ incorrect inclusion or exclusion from the lists and other errors, which were to be reviewed by their PEC. Rejections could be appealed to the municipal people’s court; the court was to make a decision within three days of the appeal (1990, art. 34).31 Under the 1999 law, voter lists were to be compiled and posted for public scrutiny at least 30 days before the election (1999, art. 34). The Ministry of Refugees and Resettlement was to provide District Electoral Commissions (DECs) with lists of internally displaced persons (IDPs) no later than 55 days prior to the elections. The DECs were to compile the voters’ lists for IDPs according to their original place of residence and deliver the lists to the PECs of their current residence (1999, art. 32). IDPs could appear on the voter lists of their local precincts, but they were only authorized to vote on the party list ballot (1999, art. 33). Regulations for voter lists formed in hospitals and other special precincts remained the same as noted above, with the addition of the lists being formed in Georgian military units (1999, art. 32). The 2003 law added requirements for voter lists. IDPs were to be entered at their actual place of residence, such as at the collective centres described in Chapter 11, and servicemen at their military compound. The CEC was in charge of compiling the list and making it available for public inspection on the Internet (2003, art. 9). Nomination of parties and candidates In 1990, registered parties and election blocs were required to submit candidate lists, consisting of at least 125 and no more than 250 candidates, at least 35 days prior to the election (1990, art. 36). Candidates were required to be at least 23 years old and to have lived in Georgia for ten years (1990, art. 2). Independent candidates could be nominated by voter groups upon submission of 500 signatures of registered voters in the district (1990, art. 37).

Election Rules in the Republic of Georgia 27

Nomination rules were modified in 1992 to conform to institutional changes introduced that year, particularly the establishment of regional party lists and direct election of the parliamentary speaker. Parties could submit one party list in each multimandate electoral district and a compensatory list to the CEC. The law indicated that party lists must be composed of at least one-half the number of mandates in each district but not exceed the region’s district magnitude. A party’s compensatory list was not to exceed 150 candidates. Local candidates were prohibited from simultaneously participating on the party list ballot (1992, art. 37). Independent candidates for majoritarian races could be nominated by voter groups of at least five citizens. To gain ballot access, these candidates were required to obtain signatures of 500 voters; candidates for parliamentary chairman were required to collect 5000 signatures (1992, art. 37, 38). Because regional party lists were abandoned after 1992, nomination requirements were once again modified. Parties and election blocs composed a single party list and were required to obtain 50 000 signatures for ballot access (1999, art. 39). Valid party lists required at least 100 and no more than 235 candidates in 1999 and 2003 (1999, art. 37; 2003, art. 96). Candidates could participate in both the party list and majoritarian ballots, but this fact was to be noted on the party list (2003, art. 96). Under the 2003 provisions, parties, blocs and voters’ initiative groups had the right to nominate candidates in the electoral districts. Each party was allowed to nominate one candidate in each SMD. Candidates were allowed to simultaneously contest seats on the party list ballot and in districts (2003, art. 96, 9–13). Independent candidates could still be nominated by voter groups; 1000 signatures of voters in the district were required for ballot access. However, incumbent candidates did not need to collect signatures (2003, art. 97). Campaign regulations Election costs and financing Campaign regulations set the tone for the election by establishing how competitors may fight to win office. The rules specifically address finance, rights of candidates and parties, official party platforms, the role of the mass media and the production and display of printed campaign material. Under the 1990 election law, the Presidium of the Georgian Supreme Soviet (PGSS) monitored and set the cost of elections. Parties, election blocs and independent candidates were authorized to establish election funds consisting of personal resources as well as contributions from Georgian citizens, labour collectives, public organizations and movements.32 The fund limit could not exceed four times the total amount allocated by the Central Electoral Commission (CEC), which monitored the use of the funds. If candidates or parties exceeded the maximum amount, the responsible individuals or parties would be deprived of the seats secured in the Georgian Supreme Soviet.

28 The State of Law in the South Caucasus

Further, the party, election bloc, or independent candidate would lose the right to contest elections to the Supreme Soviet for six years (1990, art. 12). Regulations covering election costs did not change greatly from the 1990 election law to those of 1992, 1999 or 2003. The PGSS no longer existed, but the state continued to monitor and set the cost of elections. The media, campaign materials and propaganda During the 1990 election, the CEC dictated the role of the mass media. The national and local press was to publish party programmes no later than five days prior to the elections. Candidates’ platforms were to be published in the local press no later than ten days prior to the elections. Publication of public opinion polls was prohibited ten days prior to the election (1990, art. 49). In 1992, submission deadlines were increased: platforms were to be submitted 30 days in advance to the local press and other materials for publication had to be submitted at least ten days prior to the elections.33 The deadline for opinion poll publication was also modified; they were prohibited seven days before the elections (1992, art. 48). In 1999, party programme submission deadlines were reduced to 25 days before the election. Further, the law specified that the CEC would identify the newspapers and magazines that would publish the election documents (1999, art. 48; 2000, art. 48). The 1999 election law added specifications for the use of the media for campaigning. For example, public TV and radio stations were to allocate daily three-hour blocks of free airtime for campaigning and to allot time slots equally among registered parties and candidates. Electoral commissions were to aid the media in setting and regulating the timetable of the campaign broadcasts. Apart from the time specifically established for campaigning, the President and Members of Parliament were not allowed to make statements about campaigns (1999, art. 47). As in previous versions of the law, 2003’s Unified Election Code specified how free airtime was to be allocated on television and radio. Stations were to provide two hours of free airtime for campaign and political advertising for at least 15 days prior to election day. Airtime was to be equally distributed among the parties and candidates (2003, art. 14–18). Public opinion surveys could not be published from 48 hours prior to beginning of the election until midnight on election day (2003, art. 73). But this version of the code also provided more guidance on permissible campaign activities. The 2003 law was unique in explicitly stipulating rules for pre-election rallies. If a rally would disrupt the movement of people or transport, the organizers were to notify local government prior to organizing such events. State officials were prohibited from stopping rallies, unless the slogans called for violations of human rights and threatened the independence of the country (2003, art. 74). Moreover, the law provided specific details about the size and required identifying information for posted material as well as impermissible locations for posting (2003, art. 75). It also noted that

Election Rules in the Republic of Georgia 29

government officials were prohibited from using their positions to campaign for or against a party or candidate (2003, art. 76). Translation of votes into seats The Republic of Georgia was the first post-Soviet state to adopt a mixed electoral system, employing it for the 1990 Supreme Soviet election. The Georgian Supreme Soviet consisted of 250 deputies, divided equally between the party list and majoritarian ballots. The proportional representation district used the d’Hondt formula to allocate seats with a 4 per cent threshold. In the majoritarian districts, candidates were required to gain a majority vote in the first round of voting (50 per cent ⫹ 1 of the valid votes). If no candidate gained a majority, any candidate from the first round could contest the second round. The winner of the second round would be the candidate with the most valid votes, provided that the winner received at least 25 per cent. Further, at least 50 per cent of registered voters were required to participate for elections to be considered valid (1990, art. 54). The translation of votes into seats was substantially modified in 1992. The assembly size was reduced from 250 to 235 and, as noted above, the Chairman of Parliament was to be directly elected. The 150 party list seats were divided into ten multimember districts and were allocated by a complicated formula incorporating elements of preference voting. Voters were to provide a rank order for their top three most preferred political parties by indicating ‘1’, ‘2’ and ‘3’ on the ballot. Parties were given five points for each first preference vote, three points for each second preference vote and two points for each third preference vote. To allocate seats, a quota was calculated by dividing the total number of points allocated to all parties by the number of seats. This quotient provided the number of full quotas the party was to receive; any points unused in the initial seat allocation were transferred to a compensatory list allocated through d’Hondt. No threshold was applied in the party list ballot. The majoritarian seats were allocated with a plurality rule. The Chairman of Parliament was also elected via a plurality vote, but required at least 33 per cent of the valid votes to win the race. On all ballots, voters were also required to cross off the names of parties or candidates that they did not support (1992, art. 54). By 1995, allocation rules were substantially simplified.34 The directly elected parliamentary chairman was eliminated, as was preference voting and local districts on the party list ballot. A threshold was reintroduced for the party list ballot (5 per cent). The 1999 version of the election rules included additional changes. The 150 party list seats were subject to a 7 per cent threshold, relatively high by international standards. Seat allocation was determined in the following manner. The total number of votes was multiplied by 150 and divided by the total number of valid votes to determine the quota. Each party’s total vote was divided by the quota to yield the number of full quotas received; any remaining seats were allocated in order

30 The State of Law in the South Caucasus

to the parties receiving the highest remainder. For the majoritarian elections, the plurality winner received the seat, unless the candidate obtained less than 33 per cent of the vote. In this case, a second round was held (1999, art. 54). The 2003 election code included the same main provisions as 1999, with the addition of specifications regarding deadlines for district formation and publicity, and revision of district boundaries.35 Oversight and adjudication The primary institutions for administering elections in Georgia are the electoral commissions. Under the 1990 (art. 18), 1992 (art. 17), 1999 (art. 17) and the 2003 (art. 17) election codes, election commissions are divided into three tiers: the Central Election Commission (CEC), the District Election Commissions (DECs) and the Precinct Election Commissions (PECs). Election administration in the 2003 code also included CECs of the Abkhazian and the Ajarian Autonomous Republics.36 In addition to the CECs noted in the law, 75 DECs and 2860 PECs administer the elections across Georgia’s territory.37 The law set forth regulations for their formation and functions. The Soviet-era election law of 1990 gave the CEC many powers which persisted in the post-communist period. CEC membership consisted of a chairman, a deputy, a secretary and at least twelve members. The chairman and four members were appointed by the Presidium of the GSS (1990, art. 22). The CEC’s main responsibility was to implement the elections by administering and interpreting the law. The CEC formed election districts; registered parties, blocs and candidates; directed activities of lower-level commissions; established protocols for election fund use and reporting; designed ballot forms, voter rolls and other election materials; and performed other tasks related to administering the elections at the national level. Further, the CEC was responsible for ensuring equal conditions during the campaigns for all parties and candidates; determining the role of the media; and identifying the responsibilities of state ministries and agencies during the election period. After the polls closed on election day, the commission was to calculate the results and announce the winners of the national competition. Lastly, the CEC was responsible for conducting hearings on complaints and making decisions about appeals from lower-level electoral commissions (1990, art. 23). The 1992 rules for CEC membership retained the same make-up, except the number of members increased to 20. The chairman and four members were appointed by the State Council of Georgia (1992, art. 21). The formal responsibilities for the CEC did not change greatly in 1992, but responsibilities were added. For example, the 1992 rules specified that the CEC was to appoint a deputy chairman and two members of the DECs. Further, the 1992 rules included special responsibilities for the CEC related to the direct election of the parliamentary speaker (1992, art. 22). In 1999, the main positions in the CEC remained the same, but there were only fourteen other members. Parliament elected five members for a four-year

Election Rules in the Republic of Georgia 31

term; no more than three of these five members were to be representatives of the parliamentary majority. The President appointed four members and, with the consent of the Parliament, he also appointed its chairperson to a five-year term (1999, art. 21). The 1999 election code also modified some of the CEC’s responsibilities. The CEC was to appoint the chairpersons and four members of the DECs. With a two-thirds vote, it had the right to terminate the mandate of lower-level electoral commissions and delegate that mandate to special groups established by the CEC. The CEC also determined the responsibilities of the CECs of the Autonomous Republics of Abkhazia and Ajaria (1999, art. 22). Provisions about CEC powers became more detailed in 2003. The President of Georgia had the right to appoint or elect two CEC members. Any party that passed the 7 per cent threshold in the previous parliamentary elections had the right to nominate CEC members. The specific number of CEC members to be nominated by parties depended on their election performance.38 The Supreme Council of the Parliament of the Abkhazian Autonomous Republic and the Republican Council of the Ajarian Autonomous Republic had the right to appoint one member each (2003, art. 27). The CEC was to ensure computer processing of election results from the DECs and was to publish them on the Internet. The CEC was responsible for generating the general list of voters and its computer processing for public access and inspection. As in the other election codes, it had the right to adopt other decrees related to election procedures that were not ‘envisaged’ by the election laws (2003, art. 29). Summary Georgia’s election rules have been modified substantially over the fifteen years since the initial multiparty election in 1990. Voter rights changed little over the four election laws that we evaluated. But, the 1999 and 2003 laws more clearly addressed accommodations for IDPs and the 2003 code incorporated new technologies into the dissemination of voting information. The barriers for parties and voters to gain ballot access changed over time: signature and residency requirements were modified, as were regulations about candidate participation in majoritarian and party list ballots. Sources for campaign financing evolved as did media rules. The most substantial changes to the election rules were in the translation of votes into seats: the assembly size, formula, district magnitude, threshold and other mechanisms for determining the outcomes varied from election to election. The basic structure of electoral commissions and their powers were stable over time, but commission membership changed. The texts evolved into increasingly detailed and professional documents, eliminating ambiguities and addressing critical peculiarities of Georgia’s environment. Conversely, over the same period, elections became less competitive as government increasingly interfered in election administration

32 The State of Law in the South Caucasus

processes. The next section addresses the gap between the formally codified election rules and their implementation by state authorities.

Election rules in practice As noted above, the statutory basis of Georgia’s parliamentary elections improved over time. The Unified Election Code, initially approved in 2001 and subsequently modified, more clearly articulated election procedures and addressed many deficiencies in previous versions of the law. Indeed, as other chapters in this book point out, the quality of legislation improved in most spheres over the 1990s. Yet, despite improvements in legislative drafting, observers noted deviations from the rules in all elections and especially egregious violations in 1999 and 2003. Barriers to entry Parties and voters encountered impediments to the full expression of their rights in many parliamentary campaigns. Reports of improperly applied barriers to participation were sporadic in early elections. For example, in 1995, a Georgian NGO noted that some registration denials were appropriate, but other denials were outside legal norms.39 Reports of inappropriate registration denials increased in the 1999 election. The OSCE noted that the CEC formally identified the criteria for denying registration to candidates two days after the registration deadline (although the resolution was officially dated before the deadline). The timeline implies that the CEC crafted regulations to ensure that it could deny registration to certain candidates and waited for the registration deadline to pass to prevent candidates from correcting their petitions. In 1999, 478 candidates were denied registration. Because of denials, two SMD races were uncontested. In addition, some parties were removed from the proportional ballot for failing to have 100 participants on their party lists after some of their candidates were denied registration.40 A controversy also emerged around appropriate documentation for candidates and voters. While a presidential decree permitted the use of Soviet-era passports as identification, the rule was applied inconsistently.41 The accuracy of voter lists was also questioned, especially due to large increases in the number of registered voters in many districts and other irregularities.42 Many accused ECs of including ‘dead souls’ on voter lists to facilitate ballot box stuffing. The rights of the most vulnerable voters were also undermined. Observers reported violations of voting rights in military barracks, prisons and hospitals.43 IDPs, numbering around 264 000, were not permitted to participate fully in the elections. While IDPs could vote on the party list ballot, they could not vote for candidates in the district of their temporary residence. Since there were no elections for Abkhazia and South Ossetia, IDPs were denied the right to cast one of their ballots.44

Election Rules in the Republic of Georgia 33

While the candidate registration process was not identified as a particularly problematic issue in 2003, voter registration was highly criticized. In some regions (Kvemo Kartli, for example) the number of registered voters increased substantially. In other areas (such as the city of Kutaisi), the number of registered voters decreased substantially.45 In some cases, all residents of apartment buildings or city blocks were omitted from the lists.46 In fact, the CEC chair said that she expected a 10–15 per cent margin of error in the voting lists.47 IDPs were also omitted from many lists. Voter list problems were found all over Georgia, but observers noted particularly acute problems in Ajaria. When it became clear that there were many problems with voter lists, the CEC turned over the process to local commissions; this decision undermined the development of accurate lists.48 While population movement could account for some changes, the OSCE implied that variation in voter lists from election to election was not due to natural change.49 For the 2004 elections, voter lists were reconstructed although observers noted serious problems during the presidential and parliamentary campaigns.50 Campaign regulations The parties of power in Georgia were consistently accused of benefiting from improper access to state-owned resources. In 1990, opposition parties claimed restricted access to printing presses owned by the state.51 By 1992, the identity of the dominant group changed; many pro-Gamsakhurdia news outlets were forced to stop reporting.52 Election officials were also accused of active campaigning for Eduard Shevardnadze in 1995.53 Although the rules stipulated that state-owned media could not sell time to parties in 1999, the pro-government CUG was able to buy time for a television advertisement. CUG was not punished because the time had been sold to a private company that resold it to CUG before the rule was officially in place.54 News reports often served as campaign ads for Shevardnadze, including a two-hour programme showing Shevardnadze meeting with workers from all over Georgia.55 However, regional variation in media bias was evident, with Aslan Abashidze’s Revival Party receiving substantial coverage in Ajaria. The print media also disproportionately covered the party of power, but more balance was witnessed among privately owned newspapers.56 As in previous elections, the pro-government bloc used its access to government resources in 2003. Campaign materials were displayed in prohibited locations and there were accusations of vote buying.57 The pro-government FNG received disproportionate television coverage which tended to be positive. Independent media coverage of the government was far less positive; Rustavi-2 was particularly critical of the Shevardnadze government and FNG.58 Translation of votes into seats Interference in the casting, counting and aggregation of votes has been reported in all Georgian parliamentary elections. Group voting has been a

34 The State of Law in the South Caucasus

common practice, with multiple voters in booths or consulting with one another while filling out ballots in polling stations.59 While this is a relatively minor problem, observers have made more serious allegations. In 1990, Communist Party members intimidated voters in precincts in the Marneuli region. However, observers noted that intimidation appeared to be localized and not systematic.60 In 1992, balloting was cancelled in many regions due to violence or threats of violence, especially in Abkhazia, South Ossetia and Mingrelia. In addition, results were cancelled in two districts due to irregularities.61 In 1995, observers witnessed voters being instructed to vote for certain candidates by officials. The secrecy of ballots was compromised in many cases: in one precinct, voters cast ballots in the precinct director’s office with his assistance.62 In many precincts, voters were given ballots without showing documents, unauthorized individuals participated in vote counting and filling out protocols, pre-prepared ballots were distributed, and military and hospital voters’ privacy was not preserved.63 Similar serious violations were reported in 1999. Anecdotal evidence of ballot box stuffing was reported in Ajaria.64 This region also witnessed unusually high turnout figures and reports of voter intimidation.65 Irregularities were not limited to Ajaria: the OSCE noted that in a quarter of the polling stations its observers visited, vote counting procedures were not properly followed.66 In addition, the CEC interpreted the threshold rule in an unusual manner. Instead of calculating participation based on the valid vote, it was calculated based on all votes cast. The difference in values was enough to put the Labor Party below the 7 per cent minimum threshold for party list seat allocation.67 Egregious violations of proper procedures occurred in 2003. OSCE observers saw efforts to stuff the ballot boxes, officials facilitating multiple voting by transporting individuals from polling station to polling station, and premarked ballots. Also, observers reported voter intimidation, improperly cast proxy votes, and the destruction of ballot boxes. The OSCE noted that in one case, a ballot box was stolen by an armed person.68 Officials in many polling stations did not follow the proper procedures for vote tabulation and protocols were altered at the DEC level.69 In Ajaria, protocols were not completed at precincts, but at the DECs, allowing Revival Party officials to influence the process.70 Officials often failed to check for indelible ink markings intended to preclude multiple voting.71 Oversight and adjudication Observers particularly reported improper oversight processes in later parliamentary campaigns. In 1999, the rules indicated that lists of supporters for ballot access should be destroyed no later than twenty days before the election. But some DECs destroyed them earlier, preventing candidates from using these documents in appeals of registration denial.72 The Supreme

Election Rules in the Republic of Georgia 35

Court was called upon to hear many appeals of electoral commission decisions, but the volume of cases prevented detailed deliberation. There were anecdotes of unusual decisions as well: despite evidence of a forged document that was used to deny registration to a candidate from the Revival Party, the Supreme Court did not reinstate him.73 In 2003, EC composition led to questionable decisions. The CEC was made up of five representatives appointed by the President, three by Revival, two by Industry will Save Georgia, and one each by New Rights, National Movement, United Democrats, and Labour. The chair was to be appointed by the President from recommendations by the Organization for Security and Cooperation in Europe. An alliance among representatives of FNG, Revival and Industry will Save Georgia allowed the government to control decisions. The appointment of DEC chairs was controversial and resulted in most DEC chairs being representatives from FNG, Revival or Industry Will Save Georgia. PEC chairs also reflected the dominance of the three progovernment parties.74 The electoral commissions were complicit in the fraud noted above. The court system was involved in adjudicating some election-related disputes. The city court in Tbilisi actively participated in local election disputes in 2002, determining that Zurab Zhvania’s party could not inherit the CUG’s name and later ordering the City Council to suspend its activities after Saakashvili’s ascent to the chairmanship.75 In the 2003 parliamentary election débâcle, Shevardnadze initially suggested that evaluation of election results was the responsibility of the CEC and courts. The Constitutional Court ultimately declared the PR results and some SMD results invalid.76 Overall, while courts addressed some election disputes, their impact has been minimal, with electoral commissions playing the most prominent role in oversight and adjudication. Just as formal election rules improved in detail and clarity, the quality of election administration declined. Evidence from election observers supports the assertion that election practices diverged substantially from the published rules, particularly in 1999 and 2003. But the improvements witnessed in the 2004 elections raise hopes that elections and the rule of law will converge in Georgia in the short term.

Conclusion: elections after the Rose Revolution This chapter connected the study of elections and the rule of law in the South Caucasus by tracing the evolution of parliamentary election rules and their implementation in the Republic of Georgia. We noted that Georgia’s election statutes improved in quality and detail over time. Ambiguities and overly complex provisions in the earliest election codes (1990 and 1992) were clarified and tightened in the Unified Election Code (2003). While rules dictating barriers to entry, campaign regulations and oversight changed over

36 The State of Law in the South Caucasus

time, the most dramatic modifications occurred in the translation of votes into seats. Georgia’s assembly size, threshold, formula and district magnitude varied across its six parliamentary elections, but these rules seem to have stabilized. Further modifications to the election laws could improve the quality of Georgia’s elections. Precinct sizes vary greatly, undermining appropriate representation.77 The 7 per cent threshold is high by international standards and potentially generates a substantial number of wasted votes on the party list ballot. Lowering the threshold could increase fragmentation in Parliament, but would also protect voters who wish to support small parties. Variation in formal provisions constitutes half of the story. Just as Georgia’s formal election rules improved, election quality reached its nadir in 2003, with widespread falsification reported by domestic and international observers. The elections of 2004 witnessed many improvements to election practices, but some practices ‘on the ground’ were still troubling.78 Moreover, the extraordinary agreement among the three main forces of opposition to unite behind a single presidential candidate and parliamentary slate, accompanied by the collapse of Shevardnadze’s allies, produced less competition in the 2004 election cycle. This process was repeated in Ajaria after Abashidze was forced out of power. While Georgians expressed overwhelming support for Saakashvili and the united democratic movement, this support was tempered by the absence of strong alternative choices. For democratization to proceed, it is important for the Georgian people to have solid election legislation, trustworthy election administration, and a range of choices that facilitates the expression of the full spectrum of political views.

Notes 1. The quote is from Eduard Shevardnadze, commenting on the unusually complex election rules adopted in 1992 (cited in an untitled report on Georgia of the United States Helsinki Commission/Commission on Security and Cooperation in Europe, 1992, 6). 2. Although this quote has been widely attributed to Joseph Stalin, the authors have not found a reliable reference to the original source material. The quote, in fact, may be apocryphal. 3. The Rose Revolution has exerted an extended effect in Georgia, evidenced by the ousting of Ajarian leader Aslan Abashidze in April 2004. 4. Unfortunately, we could not obtain a copy of the 1995 rules without amendments. However, the 1999 election law was based on the rules adopted for the 1995 campaign. 5. W. H. Riker, ‘The Two-Party System and Duverger’s Law: an Essay on the History of Political Science’, American Political Science Review, 76 (1982), p. 753. 6. M. Duverger, Political Parties (New York: Wiley, 1954). 7. The process described by Duverger is a district-level phenomenon. It is possible to have strong two-party competition in districts but multiparty competition at the national level.

Election Rules in the Republic of Georgia 37 8. L. D. Epstein, Political Parties in Western Democracies (New Brunswick: Transaction Books, 1980). 9. See, for example, D. W. Rae, The Political Consequences of Electoral Laws (New Haven: Yale University Press, 1971); P. Ordeshook and O. Shvetsova, ‘Ethnic Heterogeneity, District Magnitude and the Number of Parties’, American Journal of Political Science, 38 (1994), p. 100; O. Amorim Neto and G. W. Cox, ‘Electoral Institutions, Cleavage Structures, and the Number of Parties’, American Journal of Political Science, 41 (1997), p. 149. 10. R. Taagepera and M. S. Shugart, Seats and Votes: the Seats and Determinants of Electoral Systems (New Haven: Yale University Press, 1989) and G. W. Cox, Making Votes Count (Cambridge: Cambridge University Press, 1997). 11. See, for example, S. Mozaffar and A. Schedler, ‘The Comparative Study of Electoral Governance – Introduction’, International Journal of Political Science, 23 (2002), pp. 5–27; P. Jones Luong, Institutional Change and Political Continuity in Post-Soviet Central Asia (Cambridge: Cambridge University Press, 2002); L. Massicotte, A. Blais and A.Yoshinaka, Establishing the Rules of the Game: Election Laws in Democracies (Toronto: University of Toronto Press, 2004). 12. E. S. Herron, ‘Political Actors, Preferences and Election Rule Re-design in Russia and Ukraine’, Democratization, 11 (2004), p. 41. 13. J. Elster, C. Offe and U. K. Preuss, Institutional Design in Post-Communist Societies (Cambridge: Cambridge University Press, 1998); K. R. Benoit and J. W. Schiemann, ‘Institutional Choice in New Democracies: Bargaining over Hungary’s 1989 Electoral Law’, Journal of Theoretical Politics, 13 (2) (2001), p. 159; K. R. Benoit and J. Hayden, ‘Institutional Change and Persistence: the Evolution of Poland’s Electoral System, 1989–2001’, Journal of Politics, 66 (2) (2004), p. 396. 14. O. Shvetsova, ‘A Survey of Post-Communist Electoral Institutions: 1990–1998’, Electoral Studies, 18 (1999), p. 397 and E. S. Herron, ‘Too Many or Too Few Parties? The Implications of Electoral Engineering in Post-Communist States’, in N. A. Graham and F. Lindahl, eds, The Political Economy of Transition in Eurasia: Democratization and Liberalization in a Global Economy (East Lansing: Michigan State University Press, forthcoming). 15. The term ‘political party’ is more complicated in the election rule nomenclature of Georgia. Officially registered parties as well as blocs of parties compete in elections. While we will use both terms, we will sometimes use the term ‘party’ as a generic designation for parties and blocs. 16. G. Chiesa, Transition to Democracy: Political Change in the Soviet Union 1987–1991 (Hanover: University Press of New England, 1993) and D. Slider, ‘The October 1992 Elections in Georgia’, paper presented at the National Convention of the American Association for the Advancement of Slavic Studies, Phoenix, Arizona (19 November 1992). 17. A Soviet era dissident who became Georgia’s president, Gamsakhurdia was ousted on 6 January 1992, prompting civil violence. 18. D. Abele, ‘A Restive Soviet Georgia Goes to the Polls’, reprinted in W. H. White, Jr., ed., Report on Election Observations of the October 28, 1990 Soviet Georgian Elections (Washington, DC: American Bar Association, 1990). 19. The PR component used the d’Hondt formula. 20. In the second round, the plurality winner gained the seat if s/he received at least 25 per cent of the votes. 21. Georgian Law on Elections to Supreme Soviet, Zarya Vostoka, Tbilisi, Soviet Georgia, Mimeo (22 August 1990).

38 The State of Law in the South Caucasus 22. Some opposition groups boycotted the elections, contesting seats in an election for a rival parliament in September. See Slider, supra note 16. 23. White, supra note 18. Four districts did not produce results because of turnout problems: Tskhinvali, Gudautic (Abkhazia) and Gudunt and Djava (South Ossetia). 24. STV is most closely associated with Ireland and Malta, although it was briefly used in Estonia. 25. Commission on Security and Cooperation in Europe (CSCE), Report on Georgia’s Parliamentary Elections, October 11, 1992 (Washington, DC: CSCE, 1992) and Slider, supra note 16. The party list ballot included rank-ordering of the three top choices and a point system to determine winners. 26. Central Electoral Commission of the Republic of Georgia (CEC), Results of the Elections to the Parliament of the Republic of Georgia (Mimeo: CEC, 1992). See also CSCE, 1992, ibid. and Slider, supra note 16. 27. Terms of deputies from Abkhazia were again extended. 28. In this section we use parenthetical citations with the year of the law (with amendments). 29. The rules used in 1999 are amended from the election code approved in 1995. The rules used in 2003 are amended from the Unified Election Code approved in 2001. 30. This phrase refers particularly to paramilitary forces. 31. The 1992 code was similar, except that the lists were to be made public ten days prior to election in the PECs (1992, art. 34). 32. Contributions were restricted to domestic sources. 33. Candidates for chairman must have submitted programme and platform information to the press no later than ten days prior to the elections (1990, art. 48). 34. The process of crossing off candidates that the voter opposed, in addition to marking the candidate/party that the voter supported, was retained. 35. The Unified Election Code also included more details about assisting disabled voters. 36. The procedure for the formation of the Abkhazian and Ajarian CECs was to be determined by laws of those autonomous republics as well as the national law. 37. These figures reflect the status as of the 2004 elections. 38. If there were less than five eligible parties, the party with the next best results was to participate in CEC nomination (if it received more than 3 per cent of the votes). If no party qualified, all of the original parties had the right to appoint one additional member to the CEC. If parties merged into a bloc, their appointments were affected. If CEC membership fell below seven, Parliament was able to nominate new members (2003, art. 27). 39. International Society for Free Elections, Parliamentary and Presidential Elections in Georgia, November 1995 (Tbilisi: Meridian Publishers, 1996), pp. 14–15. 40. Organization for Security and Cooperation in Europe (OSCE), Georgia: Parliamentary Elections, 31 October and 14 November 1999 (Warsaw: OSCE, 1999), p. 12. 41. Ibid. at p. 14. 42. Ibid. at p. 16. 43. I. Haindrava, ‘The Elections in Georgia are Over: Summary of the Parliamentary Elections in the Republic of Georgia’, Central Asia and the Caucasus: Journal of Social and Political Studies. Available online at http://www.ca-c.org/journal/ eng-0–000/04.khaindrava.shtml. 44. International Organization for Migration (IOM), Case: Georgia, 1999 Parliamentary and 2000 Presidential Elections (Mimeo: IOM, 2000). 45. Organization for Security and Cooperation in Europe (OSCE), Georgia: Parliamentary Elections, 2 November 2003 (Warsaw: OSCE, 2003), p. 10.

Election Rules in the Republic of Georgia 39 46. Ibid. at p. 10; International Republican Institute (IRI), Statement on the Georgian Parliamentary Elections, available online at http://www.iri.org/sp-georgia-folsom.asp; and E. A. Miller, ‘Smelling the Roses: Eduard Shevardnadze’s End and Georgia’s Future’, Problems of Post-Communism, 51 (2) (2004), pp. 1–10. 47. IRI, ibid. 48. Miller, supra note 46 at 4. 49. Supra note 45. 50. Organization for Security and Cooperation in Europe (OSCE), Georgia: Partial Repeat Parliamentary Elections, 28 March 2004 (Warsaw: OSCE, 2004), p. 12. 51. Supra note 23 at p. 7. 52. CSCE, 1992, supra note 25. 53. Supra note 39 at pp. 14–15. 54. Supra note 40 at p. 16. 55. Haindrava, supra note 43. 56. Supra note 40 at pp. 17–18. 57. Supra note 45 at p. 12. 58. Ibid. at p. 13. 59. CSCE, 1992, supra note 25 at p. 13. 60. Supra note 23 at p. 7. 61. Slider, supra note 16 at p. 12. 62. Norwegian Helsinki Committee, Report from the Observation of the Parliamentary and Presidential Election of the Republic of Georgia (Oslo: Norwegian Helsinki Committee, 1995), p. 10. 63. Supra note 39. 64. In Ajaria, Revival received 100 per cent of the vote in thirty-five precincts. The CUG received 100 per cent of the vote in five precincts outside of Ajaria. While this does not constitute evidence of fraud, it is circumstantial evidence of fraud. 65. Supra note 40 at p. 22. 66. Ibid. at p. 23. 67. Ibid. at p. 25. 68. Supra note 45 at p. 17 and IRI, supra note 46. 69. Ibid. at pp. 18–19. 70. Miller, supra note 46. 71. The ink markings were also challenged by priests. Voters were turned away in 2004 after refusing to accept the ink, believing it to be a Satanic mark or damaging to their health (author’s observation in Kutaisi, Georgia, January 2004). 72. Supra note 40 at p. 12. 73. Ibid. at p. 13. 74. Supra note 45 at pp. 6–7. 75. ‘Former Georgian Ruling Party Barred from Local Elections’, Radio Free Europe/Radio Liberty Caucasus Report, 5 (16) (10 May 2002) and ‘Georgian Opposition Politician Takes Control of Tbilisi City Council’, Radio Free Europe/Radio Liberty Caucasus Report, 5 (37) (14 November 2002). 76. ‘Chess, Poker or Roulette?’, Radio Free Europe/Radio Liberty Caucasus Report, 6 (40) (12 November 2003); ‘Whither Georgia?’, Radio Free Europe/Radio Liberty Caucasus Report, 6 (43) (11 December 2003); and ‘New Georgian Leadership Plans to Build on Presidential Election Victory’, Radio Free Europe/Radio Liberty Caucasus Report, 7 (1) (9 January 2004). 77. Supra note 40.

40 The State of Law in the South Caucasus 78. Tabulation was conducted openly, but was entrusted to a few officials who simultaneously counted ballots without any oversight. Precinct officials could not account for a handful of ballots; the number of ballots cast by voters did not correspond to the number of votes cast for candidates. Rather than recounting the ballots to uncover the source of the error, officials manipulated the protocols (author’s observation in Kutaisi, Georgia, January 2004).

3 Democratization and the Rule of Law in Azerbaijan: Europe’s Relevance Gulara Guliyeva

Introduction The period of continuing political and economic instability following Azerbaijan’s independence from the Soviet Union has resulted in limited progress in state building, democratization and the construction of the rule of law. The usual challenges facing transition countries have been compounded by, among other things, the ongoing conflict over Nagorno Karabakh and the difficulties faced in managing oil reserves.1 However, a great incentive to make democratic and legal progress is the possibility of closer ties with Europe. This chapter outlines the state of the rule of law and democratization in Azerbaijan today and considers prospects for reform through dialogue with Europe. In this regard, it focuses on Azerbaijan’s relationship with the European Union (EU), but also considers other aspects of the European relationship, including Azerbaijan’s membership in the Council of Europe. The instrument guiding Azerbaijani–EU relations is a 1999 Partnership and Cooperation Agreement (PCA).2 The PCA with Azerbaijan is lengthy and comprehensive and, it is worth noting, very similar to the PCAs which the EU has concluded with both Armenia and Georgia. Its 105 articles (and several annexes) cover virtually every aspect of the relationship between Azerbaijan and the EU, save for military issues. The Agreement’s main points include the elimination of trade quotas and provision of most favoured nation treatment, freedom of capital movement in investments, the protection of intellectual, industrial and commercial rights and yearly political dialogue at ministerial, parliamentary and senior official levels. In addition to economic matters, this dialogue is aimed at democratic, human rights and rule of law reform. It should be noted from the start that the Azerbaijani–EU relationship has several aspects which exist parallel to the PCA. These include cooperation on oil and gas matters, aid under the TACIS programme and, from July 2003, the intervention of an EU Special Representative for the 41

42 The State of Law in the South Caucasus

South Caucasus with a conflict-resolution and democratization mandate. Naturally, there are also comprehensive relationships between Azerbaijan and several of the EU member states. In terms of Azerbaijani–European contact outside of the EU, Azerbaijan’s membership in the Council of Europe (CoE) and the Organization for Security and Cooperation in Europe (OSCE) should also be mentioned. In order to understand the importance of political dialogue with European institutions, one must consider the geographic, historical and cultural position of Azerbaijan. Azerbaijan is a small country, but its place on the map makes it distinct. It borders Russia in the north, and Iran and Turkey in the south and serves as a strategically important link between Europe and Central Asia and the Middle East. It does not belong exclusively to the sphere of influence of Iran, Russia, the US or Europe, but finds itself in the middle of all of them, struggling with numerous influences, and trying to maintain its independence against regional and other powers.3 It is too small and young to accomplish this goal by itself. As does every country, it needs allies. It strives to maintain its independence and position through an alliance with one of the democratic superpowers in the region – the European Union. Of course Azerbaijan also wishes to find trade and, while Azerbaijan–EU trade is still relatively low, it is increasing every year. To gain and maintain the EU’s support, however, Azerbaijan needs to integrate European values both on the level of government policy and at the grassroots level. The process has started – during the decade and a half of independence, the country has begun the process of establishing democratic freedoms. But many problems remain to be addressed. The European Union is concerned over the lack of respect for democratic values, the rule of law and fundamental rights in the country. The EU, through the consultative bodies established under the PCA, has attached particular importance to holding free and fair elections, the pluralism of political parties, and media freedoms; this chapter considers these three areas of concern.4 Addressing these three areas under the PCA may be the key for Azerbaijan to strengthen not only its democracy but also its legislative framework, its legal institutions and the degree of compliance by those in power with the law. Before turning to the three areas of concern, however, it is first necessary to outline the state of the legal system in a general way.

The rule of law at present Azerbaijan shares a common legal base with other newly independent states; that is, a Soviet legacy short on concepts of individual human rights, due process, individual property entitlements and private commercial disputes. Transition to a rule of law-based state since independence in 1991 has been slow, with significant events such as adoption of the Constitution of the Azerbaijan Republic in 1995, the PCA with the EU in 1999, and accession to

Democratization and the Rule of Law in Azerbaijan 43

the CoE in 2001, promoting sporadic growth spurts. In the earliest days of independence Azerbaijan’s laws were mostly obsolete, unable to adapt to the changing social and economic dynamics of the new Republic. Moreover, the early laws were fragmented, and scattered throughout a number of legislative acts and codes with no systematic cross-referencing. This chaotic state of the law required lawyers and judges, as well as average citizens, to guess at the accurate state of the law.5 Fortunately, Azerbaijan’s legal history does not end there. In recent years, there has been some positive legislative reform, although much work remains in order for Azerbaijan to consider itself a rule of law-based state. As an emerging capitalist economy with significant oil reserves, it is no surprise that economic legislation was the first to experience tangible, meaningful transformation. However, this emphasis on economic legislation exacerbated the patchwork nature of the legal system by failing to consider the impact on other areas of law. Perhaps the most damaging byproduct of the economic legislative boom has been the disregard of human rights.6 Human rights were at least formally recognized in the national Constitution adopted in 1995, which sets forth relatively strong guarantees of fundamental rights and freedoms with respect to – among other things – elections, assembly and association.7 Between 1995 and accession to the CoE in 2001 additional progress was made with respect to human rights, though to be clear much of this was externally driven; progress on specific points was a condition of accession to that regional organization. Accession to the CoE prompted a period of comprehensive legislative reform and harmonization for Azerbaijan. A number of new codes and laws were enacted that were considered reasonably progressive and democratic by the Council’s experts.8 In August 2002 the Constitution of the country was significantly revised – thirty-nine amendments to twenty-three articles were introduced and passed through a national referendum. Since its accession, Azerbaijan has ratified dozens of European treaties, as well as assumed the obligation to bring additional legislation into line with European standards. At the same time as Azerbaijan was improving its legislative framework to comply with the human rights standards of the Council of Europe,9 it was also reforming its legislation over economic matters in cooperation with the EU.10 According to Carothers’ definition of the rule of law, as discussed in the Introduction to this book, legislative reform is only the first tier of necessary reform. In fact, implementation of the reformed legislative regime has been poor in many respects. The following analysis will demonstrate the gap between some legislative provisions and their implementation. The gap is a result of rushed law-making to speed up the process of CoE accession, failure to set up sound implementation mechanisms and a lack of will amongst those who hold power. The Constitution of the Republic of Azerbaijan established a government of three branches: executive authority belonging to the President,11 legislative

44 The State of Law in the South Caucasus

authority to the Milli Majlis (National Parliament),12 and the interpretive power to the judiciary.13 Subsequent enabling legislation saw the actual establishment of the highest judicial body in 1988 – the Constitutional Court – which is empowered to interpret the laws of the country and resolve conflicting laws. Moreover, under the 2002 amendments to the Constitution, citizens are entitled to file complaints with the Court against legislative, executive and municipal acts violating individual rights. Individual rights are further protected by the Ombudsman–Human Rights Commissioner. Establishment of this institution in 2002 at the behest of the Council of Europe is just one example of the Council’s positive influence on Azerbaijan. The irregularities of implementation start with the Constitution. Although it provides for a clear separation of powers among executive, legislative and judicial branches of the government, an imbalance exists both under the constitutional provisions and practice. The Constitution grants stronger authority to the executive power than to the other two branches. Not only does the President enjoy a wide range of direct powers and prerogatives, but the executive office also has significant influence over the legislature and the judiciary. The executive power through the presidential apparatus can initiate draft laws and, in some instances, Parliament is limited to the approval of laws.14 In practice Parliament is not permitted to initiate or amend legislative proposals in instances of high political significance, as is the case with other democratic jurisdictions.15 Moreover, Parliament has little if any power to exercise democratic control over the executive.16 Thus, not only does the executive dominate law-making, but also the implementation of those laws is left to its discretion. As Ursula Schleicher, EU–Azerbaijan Parliamentary Cooperation Committee co-chair noted in an interview with the Azerbaijani media: ‘The Constitution of Azerbaijan gives most of the power to the President. We wish for the Parliament’s power and control over the Government to strengthen.’17 Reforms aimed at strengthening the legislature and reinforcing its independence from the executive (so that it could, for example, pose questions to members of the government) were also strongly recommended by a Parliamentary Committee of the Council of Europe,18 with no positive result so far. The situation with the judiciary provides an even more vivid picture of the imbalance weighted in favour of the presidential office. Although the Constitution provides for an independent judiciary, and even refers to the President as a guarantor of judicial independence,19 in practice, judges are dependent on the executive branch, and the judiciary is widely seen as corrupt and inefficient.20 The judges of the Constitutional Court, Supreme Court and courts of appeal are appointed by the President, and subsequently confirmed by Parliament. The President appoints the rest of the judges in the country unilaterally.21 However, it is not only the appointments process, the politicization of the judiciary and widespread corruption that reduce the

Democratization and the Rule of Law in Azerbaijan 45

credibility of the judiciary. Judges may also be criticized for paying closer attention to the mechanical application of procedural steps than to the restoration of justice.22 Furthermore, judicial knowledge of new legislation is questionable: the first qualification exams for judges were based on legislation in place on the eve of the enactment of new Civil, Criminal, Family and Administrative Codes in 2000. The exams were followed by oral interviews, but these were conducted by a panel of seven persons selected by the President, which added to the lack of independence and created opportunities for corruption.23 Although better respected in the legal community and society than the judiciary generally, even the Constitutional Court suffers from an imbalance favouring the executive. It has shied away from deciding the most controversial cases and, furthermore, individuals cannot actually file complaints with the Court because the Court has yet to provide the necessary procedural mechanisms. It is hard to predict when the Constitutional Court will be able to exercise its authority to decide disputes regarding the separation of powers among the legislature, executive and judiciary. That will certainly not occur, however, until the legislature is independent enough from the executive to exercise its right to file contentious cases with the Constitutional Court. Finally, criminal prosecutors are also appointed by the executive and remain under the control of the Ministry of Justice.24 Thus there is no separation in the charging power and the final adjudicatory power, creating an imbalance in the criminal justice system again in favour of executive authority. Although the Constitution claims to provide for equality of arms, in practice the prosecution has a stronger say before the courts than the defence.25 To make matters worse, the role of defence attorneys in many cases is limited to liaison in the distribution of bribes for judges and prosecutors, as described in Chapter 5. On the positive side, with accession to the Council of Europe, citizens of Azerbaijan have acquired the right to seek redress from the European Court of Human Rights (EC⫹HR) for violations of the European Convention on Human Rights.26 However, given the caseload of the EC⫹HR, as well as the low level of legal knowledge in society, cultural reluctance to litigate and unwillingness of clients to go through ‘the circles of hell’ instead of paying convenient bribes for a desirable decision, there can be no accurate prediction as to when the impact of the European Convention will help transform the legal consciousness of the society and help instil faith in the possibility of the rule of law for Azerbaijan. The preceding paragraphs have briefly outlined Azerbaijan’s current system: both what laws say, and how those legislative provisions apply on the ground. The analysis demonstrates that Azerbaijan needs assistance to instil the rule of law, but has little ability to accomplish this goal by itself. It also demonstrates that while accession to the Council of Europe has had a positive impact on Azerbaijan’s legal system, it has not proven sufficiently transformative.

46 The State of Law in the South Caucasus

Indeed, as reiterated in Chapter 10 below, mere ratification of human rights treaties is insufficient to bring about change. Active engagement with the EU’s experience of the rule of law (and of course from the experiences of individual EU member states) is one possible way to make additional progress, particularly in the light of the EU–Azerbaijan PCA. So how can the political dialogue under the PCA move Azerbaijan towards the rule of law? First of all, it is noteworthy that while the EU itself has sometimes been described as having a ‘democratic deficit’, the EU legal order is a constitutional system based on the rule of law27 and democratic ideals,28 and the EU tries to incorporate these fundamental values in its relations with third countries. Fundamental to the PCA relationship is the importance attached by the EU to the rule of law and internationally agreed norms regarding human rights and democracy, including those under the CoE regime.29 Questions of the rule of law, democratization and human rights have been discussed in every meeting of the EU–Azerbaijan Cooperation Council and the Parliamentary Cooperation Committee, two PCA-mandated bodies.30 Thus, in the framework of the PCA, political dialogue with the EU has been aimed at encouraging Azerbaijan to approach international standards of democracy and human rights protection. Political dialogue under the PCA can also encourage the Azerbaijani government to launch reforms, since the EU has experience of successfully combining political initiatives with economic and legislative reforms. Indeed, the EU has already made substantial efforts towards bringing Azerbaijani economic legislation in conformity with European standards that will promote trade and investment between the EU and Azerbaijan.31 Eventually these reforms may become one of the driving forces for establishment of the rule of law generally, because investments in the country require internal stability, and clear and transparent laws that have predictable implementation. Azerbaijani legal reform efforts have concentrated on economic concerns and not human rights. Similarly the apparent concern for promoting rule of law and democratization revolves around the prospects for economic gain32 and international political status, and less around concern for the rights of citizens. However, Azerbaijan needs to recognize that with regard to economic prosperity, it also needs properly functioning legal institutions. One of the strengths of the process established under the EU–Azerbaijan PCA is that it combines the aim of strengthening economic ties with regular political dialogue regarding the rule of law, human rights and democratic institutions. The PCA explicitly addresses the rule of law and encompasses institutions which are ‘required in order to strengthen the rule of law, and the protection of human rights and fundamental freedoms’.33 This cooperation is envisaged in the form of technical assistance programmes for drafting and implementing relevant legislation, supporting the judiciary, and promoting free and fair elections. Building an effective rule of law system is a gradual process requiring expertise, financial support, internal, and, in case of Azerbaijan

Democratization and the Rule of Law in Azerbaijan 47

and its South Caucasian neighbours, external incentives as well. It also demands the political will of the country. To be clear: while the EU can support the reform process in Azerbaijan through political, financial and technical means,34 the willingness of the government – and ultimately the citizenry – to engage in meaningful reform is the sine qua non for effectively establishing rule of law in Azerbaijan.

Political pluralism A diversity of political parties has gradually become the norm in Azerbaijani political life. Forty political parties currently exist in the country. Many of them have satisfactory organizational structures but few of them have any real say in political life. The majority of the political parties are small, poor and not well known to public. There are currently five major active political parties in the country: one government party and four main opposition parties.35 One feature of political parties in Azerbaijan is that many are associated with the personality of their leaders, rather than the parties’ political positions. The opposition parties tend to be highly critical of government actions, but fail to come up with realistic policy alternatives. They remain fragmented and show little ability to unify, even in the most pressing situations.36 Both ruling party and opposition forces fail to establish real dialogue or the satisfactory levels of cooperation needed, at least on a procedural level, for the development of pluralist democracy. One of the recommendations of the CoE was to give an opportunity for parties unrepresented in Parliament to contribute to discussions of draft laws and important political events in the country.37 Few efforts have been made by either the ruling party, or even opposition representatives, to implement this recommendation. Moreover, public support for political parties can be described as minimal. Low levels of political education, a single-party culture for seventy years and widespread poverty limit citizens’ desire and initiative to participate fully in the political life of the country. Despite the weakness of political parties, by the time of the 2000 parliamentary elections it seemed that the country had achieved some tangible results in democratization and political pluralism. Unlike earlier elections, parliamentary elections were scheduled on time to give candidates sufficient notice to prepare for campaigns, the electoral code had been reformed and press censorship reduced. In addition, the government became more responsive to international and European pressure and advice. Indeed, in June 2000, under firm international pressure, Parliament provided a greater role for opposition parties in the Central Election Commission.38 However, as in the Georgian experience prior to the Rose Revolution, despite formal rule improvements, the actual elections showed that the majority of key actors were half-hearted about change and that the government would continue interfering in the process. First of all, the opposition parties missed their

48 The State of Law in the South Caucasus

chance for active participation in election administration by boycotting the first three meetings of the Central Election Commission due to disagreement over its composition. As a result, the government hastily adopted amendments to the election law in July 2000 and granted the ruling party majority the authority to appoint electoral commission chairpersons at all levels.39 The registration of candidates also became a major issue when the Central Election Commission refused to accept eight out of thirteen applicant political parties, on the groundless allegation of forgery of several thousand signatures necessary for registration on the party list. Ultimately the Central Election Commission reversed its decision based on the President’s instructions of 11 October 2000, but this left less than three weeks for the registered parties to run their campaigns.40 By that time, state-owned Az-TV, broadcast throughout the country, had repeatedly portrayed a lack of alternatives to the ruling party. The elections themselves were accompanied by numerous violations, including forgery of voter registration lists and exaggeration of voter turnout figures.41 The elections left uneven political representation in Parliament, and the ruling party in firm control of that institution.42 The situation in Parliament since then has not improved; government policy appears to be aimed at making the opposition existence nominal. Major changes of the electoral system, capable of seriously affecting opposition parties, took place in constitutional amendments in 2002.43 Under the previous legislative framework, parliamentarians were drawn from both majoritarian (100 seats) and proportional (25 seats) systems. The amended Constitution does away with proportional representation.44 This basically means that the fragmented and weak opposition parties will be further under-represented in future parliaments. They will either cease to exist, or be forced to unite. The paradox is that this amendment cannot be considered anti-democratic per se. Similar systems exist in many developed countries, including the UK. However, these countries, in contrast with Azerbaijan, have stable political systems. Without the latter, these changes to the electoral system can be seen as aiming to weaken the political opposition and further strengthen the ruling party. Azerbaijan’s electoral system can be identified as one area of democratization where the government has shown the least amount of progress.45 Furthermore, there are, at least in the minds of leaders, few internal incentives to change this system. Change will either come about from an exercise in citizens’ power (akin to Georgia’s Rose Revolution) or through external pressure. Therefore, it might be the right time for Europe to insist on Azerbaijan’s compliance with its obligations. This has happened to some extent, at least on a rhetorical level, by both the EU and the Council of Europe; indeed, the Council of Europe expressed a possibility of reconsidering that country’s membership in the organization.46 This is as it should be: Azerbaijan needs to realize that the political dialogue with European institutions is meaningless without genuine political pluralism in the country.

Democratization and the Rule of Law in Azerbaijan 49

Presidential elections, 2003 Significant improvements in the electoral law, the campaign phase, and the interest of the international community differentiated the 15 October 2003 presidential elections in Azerbaijan from previous ones. Substantial reforms resulted in a unified Election Code47 providing for better election administration. Upon recommendations from the Council of Europe,48 relevant provisions regulating the composition of the electoral commissions, the participation of local observers, the registration of the candidates, the accuracy of voters’ lists, and the transparency of the entire election process were included in the Code. However, a determination of the Code’s significance must be measured by its implementation.49 As in the parliamentary elections, the opposition parties were not content with the composition of the Central Election Commission. Following their previous strategy, the opposition boycotted roundtable discussions organized by the OSCE which were aimed at reconciling differences. Events developed as they had in the past, with the representatives of the ruling party comprising two-thirds of the membership on both central and local electoral commissions.50 The clause allowing participation of local observers had problems as well: NGOs that received more than 30 per cent of their funding from foreign donor organizations were disqualified from election observation.51 This provision disabled the majority of local NGOs from election monitoring. Although individuals could register as local observers, the effect of observation efforts would not be the same. The process of registering presidential candidates also hit stumbling blocks. Although a majority of candidates from leading opposition parties were registered, two of them – Ayaz Mutallibov (a former President) and Rasul Guliyev (ex-speaker of Parliament), who are both in exile – were rejected by the Central Election Commission on grounds which the OSCE found were ‘not persuasive’.52 Similarly, the tabulation process at the Central Election Commission was opaque: OSCE observers were not allowed to see any documents or observe activities of election commissions during the tabulation and preparation of final results in the period 17–19 October 2003.53 In fact, 20 per cent of the votes from more than 12 per cent of the polling stations were invalidated behind closed doors.54 Finally, the elections were accompanied by intimidation of voters, pressure on election commissioners, and media bias in favour of the ruling party’s candidate.55 These problems brought three European organizations – the EU, the CoE and the OSCE – to the conclusion that elections failed to meet generally accepted international standards.56 European and international condemnation, however, did not stop additional human rights violations. On 15 October 2003 almost 1000 pro-opposition supporters gathered in front of the headquarters of Musavat, a major opposition party, to express their support for the leader of that party and presidential candidate, Isa Gambar.57 A mass confrontation took place between

50 The State of Law in the South Caucasus

opposition supporters and police, followed by the Organized Crime Unit beating many Musavat supporters.58 On 16 October 2003 protests against the election results continued. Protesters vandalized cars and buildings, and attacked police with metal bars and stones on their way to Freedom Square in the centre of Baku. Police and military forces used excessive force to disperse the crowd and beat many demonstrators even after they were detained and posed no danger. At least one death from beating and 300 injuries were reported.59 This was an unprecedented event, exhibiting both popular dissatisfaction with the fraudulent presidential election results and the extent to which authorities were prepared to use force to quell dissent. In the wake of the protests roughly 1000 people were arrested and there are credible reports of torture, beatings and threats with the aim of intimidating opposition leaders and supporters.60 Election and post-election events demonstrated again how far Azerbaijan was from international standards of democracy or the rule of law. Yet, while both elections and post-election events were accompanied by close international observation, there was little immediate international condemnation of fraudulent results and excessive use of force. Apparently Azerbaijan’s strategic place on the map and vast oil reserves were too important for the powers in the region to jeopardize relations with the executive or to allow instability; accordingly they first expressed only muted criticism, or even approval, aimed at preserving the status quo and providing for the continuity of their interests.61 For a country in transition this kind of practice creates a dangerous precedent. Russian President Putin and chairman of the Russian Federation Council Sergei Mironov were among the first to recognize the legitimacy of the election and ‘stressed the need for development and stability in the Caucasus region’.62 On 17 October US Deputy Secretary of State Richard Armitage called and congratulated Ilham Aliyev for his ‘strong showing’ in the election and expressed the US ‘desire to work closely with him and Azerbaijan in the future’.63 Not until 21 October, six days after the violence, did the US State Department issue a disapproval of the elections and state that Azerbaijan missed an important chance to move towards democratization. The initial reaction of the International Election Observation Mission was alarming too. On 16 October the head of the OSCE parliamentary delegation described the presidential elections as representing ‘increased vitality of political life and serious efforts in Azerbaijan towards democracy and international standards’.64 Only later did the OSCE issue preliminary and final election reports that clearly and impartially stated election and post-election facts. What was the role of the EU in pre- and post-election developments in Azerbaijan? The EU–Azerbaijan Cooperation Council meeting took place on the eve of presidential elections in Azerbaijan on 20 September 2003. The EU could have used its political dialogue with Azerbaijan to justify a stronger public stance on the elections; however, its statement was limited to the fact

Democratization and the Rule of Law in Azerbaijan 51

that the EU ‘will watch closely the presidential elections in Azerbaijan’.65 A post-election statement highlighted ‘shortcomings’, police violence and ‘unequal conditions for candidates’, but recognized ‘progress over previous elections’ and stated that ‘the election shows significant efforts towards international standards’.66 With this mild reaction the EU missed an opportunity to use the potential of the PCA to make a stronger statement on elections; namely, that in failing to move towards genuinely democratic process, Azerbaijan also moved further from a beneficial relationship with the EU. Precisely how could the EU use the PCA framework to externally pressure Azerbaijan? While sanctions are not provided for under the PCA, the incentive of Azerbaijan’s integration with Europe could be strong enough to lead the ruling party and President towards implementing a rule of law system. Because the reluctance of some governments to pressure a status quo regime was largely due to the oil interests in the country, the EU with its explicit policy of avoiding the exacerbation of oil-related conflicts could have put stronger pressure on Azerbaijan.67 EU–Azerbaijan relations in other areas show that EU pressure has had considerable success, particularly in cases where economic self-interest is at stake. For example, the EU successfully demanded that an Environmental Impact Assessment be done for the proposed Baku–Tbilisi–Ceyhan oil pipeline.68 In Azerbaijan, as in Georgia and Armenia according to Chapter 9 below, environmental concerns are not a governmental priority. In this case, external pressure worked because Azerbaijan had an economic incentive for making the pipeline operational. Sustainable political dialogue between EU and Azerbaijan can help to identify these common political and economic interests, and through PCA dialogue and pressure, transform them into the country’s political will. Ultimately, applying this pressure is in the EU’s interest as well. If the EU refuses to play a catalyst role in motivating the country to adopt genuine reforms, not only will Azerbaijan will be held back by its anti-democratic practices, but the EU interests in the region might be threatened: it would be risky to use unstable Azerbaijan as a strategic corridor between Europe and Asia, to invest in the country’s economy and to continue trade in hydrocarbons.

Press freedoms Free media is essential to a democratic state and an extension of the freedom of expression. Very few formal limitations on the dissemination of information exist in Azerbaijan. Indeed, the print media of Azerbaijan covers a variety of political views. However, due to financial constraints many people cannot afford to buy newspapers and the majority of the population relies on television news. The broadcast media is either government-owned or at least not at arm’s length from the government.

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The Constitution of Azerbaijan provides for mass media freedoms as well as the freedom of thought and expression.69 The Constitution also prohibits state censorship of the media.70 A new law on mass media was introduced in December 1999 and can be considered a legislative improvement, in that it defined vague terms of previous laws and set out a framework for media regulation. In 2001 the President signed a decree on ‘Additional Measures on Increasing State Attention to the Mass Media’, and provided impetus for the introduction of major amendments to the law on mass media in December 2001. Under the amendments the system of media registration was abolished, simplifying the establishment of mass media outlets. Prohibitions on advertising and financing were also removed, allowing media agencies better opportunities to secure operating expenses. At the same time, to compensate for the fact that many newspapers could not publish regularly due to financial constraints, the President issued a decree in March 2002 authorizing the issue of long-term favourable state loans for media agencies. In August 2002 the President also gave instructions to the Cabinet of Ministers to exempt newspapers from taxes, except for income tax from advertising, as well as to refund taxes for the past three years. Moreover, newspapers’ debts to the state printing house were frozen.71 Another important development was the Presidential Decree on the establishment of the National Council on Press, TV, Radio and the Internet, a body of thirty-nine members formed in standing commissions.72 An accession pledge to the Council of Europe imposed additional pressure on the government to liberalize mass media and create a truly public television station. Parliament adopted the Law on Public Television, though ultimately the President vetoed its adoption in the light of Council of Europe critiques of some of the provisions. Currently both Azerbaijani MPs and Council of Europe experts are redrafting the bill. A recent post-election development was the establishment of a Permanent Commission for the Investigation and Elimination of Conflicts between Mass Media and Authorities in 2004.73 The Press Council of Azerbaijan and the Ministry of Interior jointly set up this Commission with the aim of regulating and improving relations between law enforcement agencies and journalists.74 The Commission first sat in 2004 and high on the agenda was establishing a method for identifying journalists to law enforcement agents when covering public events. It is an important measure in the light of the 2003 election events when dozens of journalists were beaten or arrested.75 All of the reforms outlined above are important, but in themselves not sufficient to secure media freedom. As in the fields of political pluralism and elections, discussed above, implementation of reforms has been weak. The government employs numerous methods to limit the independence of the media. The most widely used method is economic pressure. The majority of newspapers in Azerbaijan heavily rely on income from commercial advertisements, but the government discourages private companies from advertising

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in opposition newspapers.76 Additional pressure comes in the form of harassment of journalists and even physical assaults.77 The intimidation has led to reports that journalists, understandably, exercise self-censorship.78 Although the NGO Freedom House evaluated media independence as one of the only areas in the democratization process that experienced significant progress in 2002, the working environment for journalists during and after the 2003 presidential elections worsened significantly.79 According to the Azerbaijani Committee for the Protection of Journalists, there were more than ‘170 incidents of physical attacks and harassment against journalists’ in 2003.80 Economic, physical and moral pressure on the media by the government results in its bias and dependence. Media coverage of the presidential campaign in 2003 demonstrated an overwhelming bias in favour of Prime Minister Ilham Aliyev and President Heydar Aliyev.81 In general, media bias during the election period revealed a ‘lack of strong and independent media able to provide sufficient, balanced information’.82 What is the way forward for media protection in Azerbaijan? One of the recommendations of the NGO Human Rights Watch to improve the current situation was addressed to the EU: The European Union should use its Partnership and Cooperation Agreement with Azerbaijan to press for concrete improvements in the field of media freedom and other areas of urgent human rights concern. These reform demands should take the form of specific benchmarks, setting clear timeframes, and spelling out the consequences for non-compliance.83 Not only will the media of Azerbaijan benefit from EU assistance in this area, but media reform can become a major impetus for a genuine democratization process. The EU can play a crucial role in providing support for elaboration and implementation of projects and programmes in Azerbaijan aimed at understanding freedom of speech and the role and responsibility of media in a democratic society. The implementation of these programmes by the Azerbaijani government can have an important impact on the development of democratic values in society and, in the long run, positively affect the country’s dialogue with the EU.

Conclusion This discussion has highlighted major achievements and pitfalls in rule of law development and democratization by focusing on political pluralism, presidential elections and freedom of the media. There have been achievements, mostly in the form of legislative and constitutional reforms. However, in terms of both formal law and the failure to implement laws on the books, the Azerbaijani legal system is characterized by the concentration of power in the hands of the executive. Indeed, it would not be an overstatement to

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say that the imbalance of powers in favour of the President cripples progress towards the rule of law. Neither the legislature nor the judiciary provides an effective check on this power. If significant change is to occur it will have to be through a mass popular movement similar to that experienced in Serbia, Georgia or Ukraine, or through political pressure from outside. Pressure can be effectively asserted by the international community, and in particular by European institutions. The PCA provides a useful focus for dialogue – and pressure – from the EU. While the internal imbalance of power is the primary obstacle to establishing of rule of law in the country, there are others, including the unresolved Nagorno Karabakh issue (including the loss of territory and the presence of large numbers of refugees and internally displaced persons) as well as the competing interests over Azerbaijan’s oil wealth. Azerbaijan needs international and European assistance in resolving these problems. Unfortunately, to date, it seems both international and European actors have acted in a shortsighted, self-interested way in refusing to truly press home the importance of a rule of law agenda to Azerbaijan’s government. Recent experience with presidential elections demonstrated that the protection of oil interests is central to Western countries’ approach and that the latter are unwilling to jeopardize their relationships with the government; this fact holds Azerbaijan back from a genuine democratization process. Through real political dialogue under the PCA, Azerbaijan can acquire important support from the EU, and secure its independence and position among competing interests of the superpowers. Political dialogue with the EU can also guide and motivate Azerbaijan to grow into a rule of law state, and, in turn, this cooperation can become the key to Azerbaijan’s integration with Europe. In 2004 the EU adopted a European Neighbourhood Policy which includes Azerbaijan, as well as Armenia and Georgia. The new policy, while putting off the question of potential membership, seeks to:84 prevent emergence of new dividing lines between the enlarged EU and its neighbours and to offer them the chance to participate in various EU activities, through greater political, security, economic and cultural cooperation … It offers a privileged relationship with neighbours, which will build on mutual commitment to common values principally within the fields of the rule of law, good governance, the respect for human rights, including minority rights, the promotion of good neighbourly relations, and the principles of market economy and sustainable development. The level of ambition of the EU’s relationships with its neighbours will take into account the extent to which these values are effectively shared. If this new policy of integration is to be useful it will have to build on and improve upon the limited progress which has been made under the PCA.

Democratization and the Rule of Law in Azerbaijan 55

Notes 1. On the Nagorno Karabkah conflict generally, see T. de Waal, Black Garden: Armenia and Azerbaijan through Peace and War (New York: New York University Press, 2003). On the question of oil, see Y. Kalyuzhnova, A. Mayers Jaffe, D. Lynch and R. Sickles, eds, Energy in the Caspian Region: Present and Future (Basingstoke: Palgrave, 2001). 2. The Partnership and Cooperation Agreement between Azerbaijan and the EU entered into force on 1 July 1999, as did the PCAs with Armenia and Georgia. The text of the EU–Azerbaijan PCA is available at http://europa.eu.int/comm/ external_relations/ceeca/pca/pca_azerbaijan.pdf. 3. See T. Swietochowski, Russia and Azerbaijan: a Borderland in Transition (New York: Columbia University Press, 1995), pp. 5–10. 4. See EU–Azerbaijan Parliamentary Cooperation Committee Constituent Meeting: Declaration and Recommendation, Brussels (17–18 April 2000) and EU–Azerbaijan Cooperation Council Fourth Meeting, Baku (1 October 2003). 5. As Freedom House puts it: ‘Laws are often vague, and only implementing decrees are more specific. There is no official outlet for publicizing changes in laws … There is little public knowledge of laws that affect commercial activities, and such laws are rarely applied.’ See Freedom House, Nations in Transit 1998 (1998), p. 99. Available at http://freedomhouse.org/research/nattransit.htm. 6. From 1991 to 1995 no laws were adopted on individuals’ fundamental rights and freedoms. 7. See articles 56, 49 and 58 of the Constitution of the Republic of Azerbaijan, respectively. 8. For example in 2000 the following codes were enacted: Civil Code, Civil Procedure Code, Criminal Code, Criminal Procedure Code, Family Law Code, Pension Code, Code on the Implementation of Punishment, Code on Administrative and Legal Breaches and Tax Code. 9. The following laws were adopted as accession requirements: the Law on Advocacy and Defence, the Law on Public Service Broadcasting, the Law on Corruption, the Law on Access to Information. 10. For example, the EU assisted in the process of harmonization of laws in Azerbaijan by providing comments, and supporting discussion forums, on draft laws on banking and capital markets. See Implementation of the EU–Azerbaijan Partnership and Co-operation Agreement report on the first phase (2002). 11. Azerbaijan’s Constitution establishes strong presidential authority. Some of the powers of the President under article 109 are: to call for new elections of the legislature, Milli Majlis; to appoint and dismiss the Prime Minister and Cabinet of Ministers; to nominate an Ombudsman to the Milli Majlis; to sign laws into force. Article 113 grants the President power to issue decrees. 12. The Milli Majlis is composed of 125 members, elected on the basis of a majoritarian voting system under new amendments to the Constitution by article 83. In addition to passing laws and resolutions within its own competence, the legislature has the power to, among other things, appoint judges nominated by the President and approve the budget submitted by the President. 13. Judicial authority is exercised by the Constitutional Court, the Supreme Court, courts of appeal, courts of general jurisdiction and specialized courts. 14. See Freedom House, Nations in Transit 2003 (2003), p. 115. Available at http:// freedomhouse.org/research/nattransit.htm.

56 The State of Law in the South Caucasus 15. The Parliamentary Assembly of the Council of Europe recommended that the government of Azerbaijan reinforce the legislative role of Parliament, in particular in drawing up laws and in debating major political issues. See CoE Parliamentary Assembly Resolution 1305 (2002) on ‘Honouring of obligations and commitments by Azerbaijan’. Available at http://assembly.coe.int/ Documents/ AdoptedText/TA02/ERES1305.htm. 16. CoE Parliamentary Assembly Resolution 1358 (2004) on ‘The Functioning of Democratic Institutions in Azerbaijan’. Available at http://assembly.coe.int/ Documents/AdoptedText/TA04/ERES1358.htm. 17. Turan News Agency (29 April 2003). Available at http://www.turaninfo.com/. 18. CoE Parliamentary Assembly Opinion 222 (2000); Resolution 1305 (2002); Resolution 1358 (2004). 19. Articles 127 and 8, para. 4 of the Constitution of the Republic of Azerbaijan. 20. US Department of State Bureau of Democracy, Human Rights, and Labor, Country Report on Human Rights Practices, Azerbaijan (25 February 2004). Available at http://www.state.gov/g/drl/rls/hrrpt/2004/41670.htm. 21. Article 109, para. 9 of the Constitution of the Republic of Azerbaijan. 22. One of the EU recommendations to Azerbaijan was an establishment of an apolitical judicial sector. See EU–Azerbaijan Parliamentary Committee meeting, Brussels (17–18 April 2000). 23. Freedom House, Nations in Transit 2001 (2001). Available at http:// freedomhouse.org/research/nattransit.htm. 24. Article 133 of the Constitution of the Republic of Azerbaijan. 25. Article 125, para. 4 of the Constitution of the Republic of Azerbaijan. 26. European Convention for the Protection of Human Rights and Fundamental Freedoms (4 November 1950). 27. See Case 26/62, Van Gend en Loos v. Netherlands Administratie der Belastingen (1963) ECR 1. 28. See Case 6/64, Costa v. ENEL (1964) ECR 1251. 29. EU–Azerbaijan Parliamentary Cooperation Committee meeting, Baku (21–22 May 2001). 30. For example, during the fourth meeting of the EU–Azerbaijan Cooperation Council, political reforms in Azerbaijan, and in particular Azerbaijani compliance with its commitments to the CoE, were discussed. Among other requests, the EU called on the Azerbaijani government to immediately release political prisoners who were either mentally ill or in extreme ill health. See EU–Azerbaijan Cooperation Council meeting, Brussels (11 September 2002). 31. Article 43 of the PCA provides for approximation of Azerbaijan’s economic legislation to European Community law in the following areas: customs law; company law; banking law; company accounts and taxes; intellectual property law; protection of workers at the workplace; financial services; rules on competition; public procurement; protection of health and life of humans; animals and plants; the environment and legislation regarding the exploitation and utilization of natural resources; consumer protection; indirect taxation; technical rules and standards; nuclear laws and regulations; transport. Considerable work has been done on the approximation of banking and taxation legislation, competition laws, property rights registration and the introduction of international accounting standards. In addition, the EU has supported Azerbaijan’s accession to the World Trade Organization (WTO), which has in turn provided an additional impetus for legislative reforms. 32. International Crisis Group Europe Report, Azerbaijan: Turning Over a New Leaf?, Baku/Brussels (13 May 2004), p. 31. Available at http://www.icg.org/home/ index.cfm?id=2752.l=1.

Democratization and the Rule of Law in Azerbaijan 57 33. Article 71 of the PCA. 34. The EU considers it necessary to provide technical assistance to Azerbaijan aimed at implementation of legal and institutional reforms in the field of human rights and rule of law. See para. 12 of minutes of EU–Azerbaijan Parliamentary Cooperation meeting, Baku (28–29 April 2003). 35. The ruling party is the Yeni Azerbaijan Party. The main opposition parties are Azerbaijan Khalg Jebhesi, Musavat, Azerbaijan Milli Istiglal Party, and Azerbaijan Democrat Party. 36. During the 2003 presidential elections, a unified opposition could have been a credible alternative to the main ruling party candidate; however it ‘displayed a decided lack of maturity’. Supra note 32. 37. Supra note 15. 38. Freedom House, Nations in Transit 2002, p. 83. Available at http:// freedomhouse.org/research/nattransit.htm. 39. Ibid. 40. Ibid. 41. OSCE/ODIHR, Final Report on the Presidential Election (15 October 2003). Available at http://www.osce.org/documents/odihr/2003/11/1151_en.pdf. 42. The last election to the National Parliament left only 17 seats out of 125 allocated to opposition parties against 76 seats allocated to the ruling party, and 30 to socalled independents. As a result, the ruling party is in full control of the legislature. 43. Changes were introduced through a referendum on constitutional amendments, which was accompanied by irregularities and fraud. The final figures cast doubts on the results because of the high turnout (83.86 per cent) and approval (97 per cent) rates. 44. Article 83 of the Constitution of the Republic of Azerbaijan. 45. Supra note 38. 46. CoE Parliamentary Assembly Resolution 1358, supra note 16. 47. Azerbaijan unified its laws On the Elections of the President of the Azerbaijani Republic, On the Elections to the Milli Majlis of the Azerbaijan Republic, On Municipal Elections and On Referenda into a single Election Code, adopted on 27 May 2003. 48. Supra note 15. 49. OSCE/ODIHR and Venice Commission, Joint Final Assessment of the Election Code of the Republic of Azerbaijan, Opinion # 214/2002, Strasbourg/Warsaw (1 September 2003). Available at http://www.osce.org/odihr/elections/ field_activities/2003azerbaijan/az_asmelcode.pdf. 50. Ibid. at p. 6. 51. Article 2.4 of the Law on NGOs and Public Foundations. 52. OSCE/ODIHR, Republic of Azerbaijan Presidential Elections, Needs Assessment Report (24 July 2003), p. 2. 53. Supra note 41 at p. 25. 54. Ibid. 55. Supra note 16. 56. See for example, ibid. 57. Turan News Agency (15 October 2003). Available at http://www.turaninfo.com/. 58. Human Rights Watch Briefing Paper, Azerbaijan: Presidential Elections 2003 (13 October 2003), p. 22. Available at http://www.hrw.org/backgrounder/eca/ azerbaijan/3.htm. 59. Supra note 20 at p. 10. 60. J. Lobe, ‘Azerbaijan shrugs off criticism of its human rights practices’, Eurasia Insight (27 January 2004). Available at http://www.eurasianet.org/departments/ rights/articles/eav012704.shtml.

58 The State of Law in the South Caucasus 61. As the International Crisis Group puts it, the ‘Baku human rights community was a weak minority compared to the well-connected Baku oil community’. Supra note 32 at p. 19. 62. Ibid. at p. 18. 63. US State Department Office of the Spokesman, transcript of question taken at daily press briefing regarding Armitage–Aliyev phonecall (20 October 2003). Available at http://www.state.gov/r/pa/prs/ps/2003/25420.htm. 64. OSCE Parliamentary Assembly, CoE Parliamentary Assembly, OSCE/ODIHR, Joint Press Release, Azerbaijan voting generally orderly, but electoral process still short of international standards in several respects (16 October 2003). 65. Supra note 58. 66. Ibid. 67. European Parliament Final Report (1999–2004 session document) A5-0052/2004 (2 February 2004). 68. On the legal aspects of the pipeline generally, see C. P. M. Waters, ‘Governance and the Baku–Tbilisi–Ceyhan Pipeline’, Georgetown International Environmental Law Review, 16 (2004), p. 403. 69. Articles 47 and 50 of the Constitution of the Republic of Azerbaijan. 70. Article 50 of the Constitution of the Republic of Azerbaijan. 71. Supra note 14 at p. 113. 72. Ibid. at p. 87. 73. Human Rights Watch, Azerbaijan: Media, the Presidential Elections and the Aftermath (4 August 2004), p. 8. Available at http://www.hrw.org/backgrounder/eca/ azerbaijan/2004/index.htm. 74. The Commission is composed of representatives of the Press Council, Ministry of Justice, General Prosecutor’s Office and Ministry of the Interior. 75. Supra note 73 at p. 6. 76. Supra note 14 at p. 113. 77. Ibid. 78. Supra note 16. 79. Supra note 14 at p. 112. 80. Supra note 20 at p. 8. 81. Supra note 41 at p. 13. 82. Supra note 41 at p. 14. 83. Human Rights Watch, supra note 73 at p. 18. 84. See ‘What is the European Neighbourhood Policy?’ on the website of the European Commission. Available at http://europa.eu.int/comm/world/enp/ policy_en.htm.

4 Rule of Law in the Secessionist States Christopher P. M. Waters

Introduction Any account of the rule of law in the South Caucasus would be incomplete without considering the situation in the separatist territories of the region.1 Nagorno Karabakh (‘Karabakh’), South Ossetia and Abkhazia are often portrayed as lawless areas and have received little scholarly attention beyond analyses of the conflicts themselves.2 This chapter aims to foster a broader understanding of the secessionist territories by taking a closer, internal look at the rule of law in two of the three territories, South Ossetia and Karabakh. It does so by examining how local actors – lawyers, judges, law-makers and citizens – behave with respect to law. For present purposes, the views of the international community on territorial integrity, self-determination and recognition are relevant, only insofar as they impact on the behaviour of local actors. Sidestepping the question of international legal personality allows for a neglected sociolegal analysis of these territories and, specifically, offers insight into the conditions necessary for the rule of law to emerge in territories at the margins of both the region and international life. The rest of the chapter refers to the three separatist territories in question as ‘states’. It should be noted that I use the term in a narrow, legal sense and this is not intended to be a comment on the legitimacy of those territories or a recommendation that the states be recognized as such by the international community. It is, then, first necessary to define the terms ‘state’ and ‘secessionist (or putative) state’. For these purposes the Report of the Arbitration Commission of the European Conference on Yugoslavia is useful; it declared that ‘a state is commonly defined as a community which consists of a territory and a population subject to an organised political authority’.3 This requirement of territorial effectiveness is a common thread across the varied definitions of states.4 The term ‘secessionist state’ refers here to territories which have broken away from a parent metropolitan state without the consent of the latter. On this definition, there are several contemporary 59

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examples of secessionist states which remain unrecognized over long periods in addition to the three Caucasian examples.5 In terms of methodology, research on these case studies was carried out through fieldwork in Karabakh (which has de facto independence from Azerbaijan) in April 2003 and in South Ossetia (which has de facto independence from Georgia) in September 2003. Those visits were informed by frequent research and teaching trips to the South Caucasus countries – Armenia, Azerbaijan and Georgia – since February 1998. Follow-up research was carried out in visits to Georgia in January 2004 and Azerbaijan in April 2004. Interviews were carried out in Russian, Armenian or Azeri. Interpreters were generally used for interviews. The research conducted in South Ossetia and Karabakh consisted of interviews with lawyers, judges, law-makers, NGO representatives and ordinary citizens, observations of courts and political institutions, and a review of legislation and other locally available documents.6 The next section of this chapter briefly outlines the political and legal history of Karabakh and South Ossetia since the Soviet Union’s disintegration. Section three then provides a current snapshot of law and legal institutions in those territories. The section concludes that serious efforts have been made by internal actors to create rule of law-based states, though results fall short. Section four then considers why actors in those states – born from violent conflict and internal power struggle – would make efforts towards establishing the rule of law. Various explanations are offered. The most obvious explanation is the ‘show factor’: in a bid for international recognition the separatist states wish to present themselves as having government and law, and more broadly, effectiveness and legitimacy. However, on the evidence gathered, while the ‘show factor’ is important, it is not the whole answer. Political theory suggests another possibility: rulers in these states allow some version of the rule of law because they must. Specifically, the need for citizen loyalty in the face of constant outside threats demands predictability for citizens. This provides an interesting study in the relationship between law and raw power.

A brief history of Karabakh and South Ossetia A brief history of the two conflicts is in order before turning to the current state of law in those territories. It should be noted, however, that while this account begins in the late twentieth century, the conflicts which led to secession are rooted in competing cultural histories, myths of ethnogenesis (which people were there first) and civilization (which people had the more advanced culture), grounded in previous centuries. The national histories and myths created by the opposing sides are often mutually exclusive and evoke strong feelings among the people involved; as a result it is difficult to sketch even a basic chronology of the conflicts.7

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During the Soviet Union’s Gorbachev years, resurgent nationalism, both among titular ethnicities in each republic (Russians in Russia, Georgians in Georgia and so forth) and among the ethnic minorities in each republic, began to colour the democratization process.8 In 1989 the Supreme Soviet of Georgia’s semi-autonomous South Ossetian region voted for greater autonomy within Georgia (South Ossetians, together with their ethnic cousins in North Ossetia in the Russian Federation, form a distinct ethnic group and have their own language). Georgian authorities annulled this vote, however, and stripped South Ossetia of the limited autonomy it had before the poll. Violence was triggered by a demonstration of Georgian nationalists in South Ossetia itself, which quickly intensified into full-scale conflict. Roughly 60 000 Ossetians and Georgians were displaced from their homes and, at present, there are a similar number of people remaining in South Ossetia. A ceasefire was signed in 1992 leaving the authorities in Tskhinvali, the capital of South Ossetia, with control over a good portion of the territory within the original borders of the province. Joint Russian, Georgian and Ossetian peacekeeping forces have been deployed since then and international mediation efforts have been led – so far without agreement – by the Organization for Security and Cooperation in Europe (OSCE). South Ossetia has formally sought to join the Russian Federation while Georgian authorities categorically reject the notion that the territory can be anything other than sovereign Georgian territory.9 Roughly 80 per cent of South Ossetians already hold Russian passports and the Russian ruble is the main form of currency.10 As pointed out in Chapter 11 below, only small numbers of displaced persons have returned to their homes since the ceasefire, but some successful confidence-building measures – including joint police patrols – have been undertaken. As will be discussed below, over a decade and a half, South Ossetian authorities have constructed the basic apparatus of a small state replete with an elected Parliament and President, military and police forces, and various ministries including those of justice and foreign affairs. The Karabakh conflict concerns what is now an exclusively ethnic Armenian enclave within the formal borders of Azerbaijan.11 Armenians and Azeris (who are the majority of Azerbaijan’s population) are distinct ethnic groups, with different languages, religions (on the whole Azeris are Muslims while Armenians are Christians) and histories (though there is more shared history and culture than many are willing to remember). The last reliable census, held in 1979, estimated that Karabakh had a population of 162 000, with 123 000 Armenians and 37 000 Azerbaijanis.12 In 1987 tens of thousands of Karabakh Armenians petitioned Moscow for transfer to the Armenian Soviet Socialist Republic, reawakening debates from Stalin’s reign – and before – about whether the territory was properly Armenian or Azeri. Soviet Azerbaijan responded to these demands by the imposition of direct control from Baku, Azerbaijan’s capital. Mass demonstrations occurred in both Azerbaijan and Armenia proper and were accompanied by the expulsion of

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Azeris from Armenia and pogroms against Armenians living in several Azerbaijani cities. The subsequent war over Karabakh was an extremely bitter one and was internationalized by the Republic of Armenia fighting against Azerbaijan on the side of Karabakh.13 Both sides committed serious violations of international humanitarian law during intense fighting that ended with an Armenian ‘victory’ and a 1994 ceasefire. Karabakh/Armenian forces continue to hold roughly 14 per cent of Azerbaijan’s territory at the ‘line of contact’, including several districts outside of the previous borders of the enclave.14 Negotiations under the auspices of the OSCE’s ‘Minsk Group’ have stalled and the line of contact, in the absence of international peacekeepers, is tense. Shooting incidents are common and the rhetoric in Azerbaijan – buoyed by oil revenues – is often belligerent about restoring that country’s territorial integrity. Karabakh, with a population now of 60 000–80 000 persons, has – like South Ossetia – constructed a mini-state. Despite the best efforts of its Ministry of Foreign Affairs – which issues visas, has representatives in several world capitals and drums up support for recognition from the Armenian diaspora – it is recognized only by the Republic of Armenia. In addition to geographic and cultural proximity, as well as a common Soviet past, it should be clear that South Ossetia and Karabakh present similar cases. Shared characteristics include the following: they were established as a result of violent conflict; the conflicts caused mass displacements; they are formed along ethno-linguistic lines; basic institutions of government are in place; neither is recognized as independent by an international community insistent on maintaining the territorial integrity of Georgia and Azerbaijan; each has a metropolitan state patron (Russia for South Ossetia and Armenia for Karabakh); and an agreement on their status appears unlikely in the short to medium term. There are also differences. In a recent article, the Economist called the four unrecognized republics in Eurasia ‘harsh, militarised societies, with few functioning institutions, and economies open to crime’.15 Of the four, however, South Ossetia is described as the ‘pettiest’ and least viable of the mini-states and Karabakh as the most ‘normal’ and viable.16 While it is true that Karabakh is more stable than its secessionist cousin – smuggling, and illegality generally, are more prevalent in South Ossetia – there are striking similarities in how the two territories have sought to create their minirepublics and the legal systems within them, a topic to which this chapter now turns.

The rule of law in Karabakh and South Ossetia In determining the extent to which the rule of law exists in the two republics, the definition provided by Carothers in the Introduction will be used.17 Carothers’ definition suggests three broad categories for assessing the rule of law: legislation, institutions and compliance with law. These three categories will be considered in turn. The extent to which the republics

Rule of Law in the Secessionist States 63

have achieved the rule of law will be considered at the end of this section but, briefly, genuine attempts have been made in that regard. It will be clear from the start, however, that the legal systems are also intended to show sovereignty and statehood to the outside world. Legislation Starting with the constitutional or founding documents of the republics, it is clear that their primary purpose is not to order society and provide for governance. The founding instruments of both republics are rough documents, drafted during times of conflict and full of nationalist rhetoric. All of them explicitly assert justifications for statehood. For example, the Preamble to the Proclamation of the Nagorno Karabakh Republic, which declared Karabakh a republic within the USSR, sets out the case for independence as follows: [T]aking into consideration that the policy of apartheid and discrimination, pursued in Azerbaijan, created an atmosphere of hatred and intolerance in the Republic towards the Armenian people, which led to armed conflict, human victims, mass deportation of the population from peaceful Armenian villages.18 At the same time, the Preamble refers to international norms and, it is clear, addresses the document to the international community: ‘respecting and complying with the principles of the Universal Declaration of Human Rights … and expecting the understanding and support of the international community’.19 Independence, and the ability to conduct international relations, is further set out in the actual Declaration of Independence which followed after a 1991 referendum.20 The Declaration invokes selfdetermination by name, lists symbols of Karabakh statehood (flag, emblem and anthem) and proclaims that, ‘as a subject of international law, the Nagorno Karabakh Republic conducts an independent foreign policy, establishes direct relations with other states, and participates in the activities of international organizations.’21 Internally at least, the Declaration provides for Karabakh’s ability to carry out international relations, something generally considered to be an attribute of statehood.22 Similarly, the South Ossetian Constitution directly addresses the territory’s desire to be seen as fully sovereign, with an ability to conduct international relations.23 This includes the ability to join other states – widely understood to be the Russian Federation: ‘The Republic of South Ossetia has the right to enter into a union with other states and transfer to this union part of its authority.’24 The Constitution goes on to state that the ‘Foreign policy of the Republic of South Ossetia is based on the following principles … entry into collective security arrangements [and] membership of international organizations and other associations.’25 It should be noted that if these founding or

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constitutional documents are partly addressed to the international polity (as well as internally to citizens) the absence of such documents also sends out signals. Karabakh, for example, has never proclaimed a constitution (though there are several quasi-constitutional documents and a constitutional commission has been operating for several years) for fear of being seen as a spoiler of international mediation efforts.26 Leaving aside the expressions of self-determination and statehood, however, the documents do in fact provide for the various institutions of governance (including parliaments, presidents and courts) and set out individual rights and liberties. While the boilerplate human rights provisions of liberal democratic constitutions do not appear in the early constitutional documents, they have been adopted over time. In South Ossetia this came with the 2001 Constitution and in Karabakh, these provisions are set out in various instruments adopted over the last decade. Although not as blatantly strategic as the founding documents, ordinary legislation is also used for internationally strategic goals, as well as to regulate conduct internally. One of the challenges for smaller jurisdictions in the former Soviet Union has been to establish coherent legislative regimes. Not surprisingly, ‘model law shopping’ takes place, with many countries borrowing extensively from the Russian legislative scheme. Karabakh and South Ossetia have gone one step further, actually adopting the legislation of neighbouring metropolitan states as their default law. A 1992 Karabakh law provides that ‘Until the adoption of our own constitution and laws, the legislation of the Republic of Armenia is in force on the territory of the Nagorno Karabakh Republic.’27 Virtually the entire legislative regime – both criminal and civil – is adopted from Armenia. While there are minor procedural changes (to reflect, for example the fact that Karabakh has only two levels of courts to Armenia’s three) or even substantive differences (Karabakh’s tax rates are lower in an attempt to encourage investment) these are rare. In the vast majority of cases, Armenian laws are adopted verbatim with the only change being in the name of the republic in the title of the act. Lawyers and judges in the republic are as likely to have a copy of the Armenian civil code on their desks as the Karabakh version. South Ossetia also engages in wholesale legal importation, though here the adopted laws are Russian. A 1992 law provides that until South Ossetian laws are in force, ‘The law enforcement agencies, the organizations, the institutions and the citizens of the Republic of South Ossetia shall apply the norms of Russian law.’28 Thus when Russia has a new law, it automatically becomes part of South Ossetian law. As in Karabakh, some laws are indigenized by swapping the name of the Russian Federation with that of the Republic of South Ossetia. South Ossetian jurists, however, are the first to admit that importation creates an imperfect fit. As the Deputy Minister of Justice put it, ‘we have a law that is based on the realities of a more developed country.’29 But Russian laws and procedures not only clash with

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the commercial realities of South Ossetia, they also cannot be implemented properly on account of the capacity of the latter’s judiciary: there are only five first instance judges. In some cases Parliament has attempted to mould Russian law to South Ossetian realities by enacting amended versions of legislation. For example, the Russian civil procedure code is adopted in its entirety save for deviations in court structures. More frequently, however, lawyers and judges simply ignore provisions of Russian law when they are found to be unsuitable for local circumstances.30 As the South Ossetian Deputy Minister of Justice noted, ‘We say we use the Russian civil code but in practice we encounter many problems – judges attempt to adapt laws to local conditions.’31 Indeed, ‘home grown’ South Ossetian laws themselves are not always acted upon. Although the law provides for a constitutional court, for example, the court has not been established. The adoption of the metropolitan states’ laws – with some indigenization – reflects practical realities and strategic interests. First, neither republic has the ability to create a ‘home grown’ legislative regime which is comprehensive or coherent. Given the small numbers of competent lawyers, the absence of technical assistance from abroad and a lack of resources, adopting or importing other states’ laws is a matter of necessity. This is particularly true if the two republics wish – as they claim they do – to have human rightscompliant, Europeanized legal systems. Since joining the Council of Europe, Russia and Armenia have reformed many areas of law and few of these reforms have been rejected by the putative states during the legal importation. Thus, after Armenia abolished the death penalty in 2003, Karabakh quickly followed suit. Secondly, Armenia is Karabakh’s only partner and Russia is South Ossetia’s only partner. To trade with each other a harmonized legal system helps. And sharing laws, to the extent that law is a cultural attribute, also binds the two ‘peoples’ closer together on a cultural plane.32 There is, however, an apparent contradiction in the wholesale adoption of the metropolitan states’ laws. On the one hand, there is the desire to project independence and, on the other, to join another state. Karabakh’s Foreign Minister says that the intention is ‘to build a legal system of an independent state’.33 South Ossetian authorities put forward the same intention. And yet, it is an open secret that Karabakh wishes to merge with Armenia and official South Ossetian policy is to seek incorporation into Russia. Ultimately, there is no contradiction. Indigenization of the metropolitan states’ laws is needed – even on a limited scale – to project independent statehood. Only if and when independence is achieved can the newly independent states legally join (or to be precise, be absorbed by) other states, namely Armenia and Russia. Were Armenia and Russia to absorb the two putative states outright, without the agreement or acquiescence of Georgia and Armenia, this would breach the territorial integrity of the latter two states and be an illegal acquisition of title under international law.34 It should also be noted that in adopting the legal system of the ‘target state’ these two jurisdictions are able to

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reject the laws and institutions of the states from which they have broken away; in both Karabakh and South Ossetia, no reference whatsoever is made to the laws of Azerbaijan or Georgia (although occasional references to Soviet law still exist). Institutions Despite reforms, the limitations of law’s hold on the two territories is apparent in the operation of the courts. Karabakh and South Ossetia reformed the Soviet court structures in the late 1990s and early part of this century, making them more ‘European’. Both territories have a two-tier court system. In Karabakh, the seven-member Supreme Court hears both appeals and cases by way of cassation from seven first instance judges. In South Ossetia the Supreme Court is also a blended appeal and cassation court and has ten members. In some instances this court may also hear first instance cases, though generally cases begin at the eight-member city and regional court level. Like the Russian legal system, South Ossetia also has an economic court (arbitrazh) which sits somewhat outside of the regular court structure. The reforms have also expanded the power of the regular courts. In Karabakh, military law issues are now dealt with by ordinary courts rather than through a military justice system. Reforms in both territories have changed the way judges are appointed. In Karabakh this includes examinations for judicial candidates. While no exams are prescribed for Ossetian judges, the appointment procedure has improved; they must be approved by Parliament, not by the President acting alone as was the case (though apparently the executive continues to manipulate this process). In part the court reforms have been externally directed – they send signals as to the existence of statehood and legitimacy. Judges impress upon visitors that they have turned away from isolationism and towards Europe.35 Indeed several were keen to demonstrate familiarity with Council of Europe standards during interviews. There have also been symbolic acts to raise the status of the territories’ courts. Much was made, for example, of the fact that Karabakh’s judges now have judicial robes. However, despite improvements, it would be wrong to imagine that there has been a complete overhaul of the court system. To begin with, physical conditions are poor. The Supreme Court of South Ossetia is housed in an unsigned, bullet-ridden building at the edge of Tskhinvali. There is little in the way of office equipment, legal material for judges (judges’ offices contained half a dozen books and a few file folders with clippings and copies of laws) or support staff, and the buildings are cold in winter. Karabakh’s courts are in marginally better condition. Respect for the judiciary among the population remains low (as it does throughout the South Caucasus), though there is general consensus that it is rising. The lack of respect for the courts has its roots in a lack of trust in Soviet justice, but civil disorder during the war and the post-war period has also played a part. In the war years and much of the 1990s, judges were

Rule of Law in the Secessionist States 67

frequently told how to decide cases by men with guns. And, as one judge of the South Ossetian Supreme Court conceded, ‘criminal elements continue to attempt to influence courts’.36 Threats and intimidation aside, corruption was and continues to be a problem. Partly this is due to judges’ low salaries; for example, judges of the South Ossetian economic court receive 400 Russian rubles a month, the equivalent of roughly US$14.37 Speaking confidentially, judges also concede a lack of independence from government, though insist that they have been more independent in the last three to four years. Some judges are poorly trained and courts are asked to apply laws which may be contradictory and often, as noted above, do not ‘fit’ local realities or even local power politics. Judges in both territories – though especially in South Ossetia – readily confess that they do not always apply the letter of the law. For example, a South Ossetian presidential decree on housing law – putting the brakes on ethnic Georgians displaced during the war returning to their homes – clearly violates a constitutional right of return, yet judges prudently pay heed to the presidential decree over the Constitution. Finally, despite judges’ claims that they are turning towards Europe, Europe, and the West generally, refuse to deal with them. The usual rule of law aid providers in transition countries, such as the World Bank, the EU, USAID and the American Bar Association, offer no technical assistance programmes to help the judiciary. There are fears in the international community that recognizing the breakaway republics’ courts as legitimate actors would be tacit recognition of independence and considered by Georgia and Azerbaijan to be an affront to their sovereignty. As USAID puts it: The United States government officially recognizes Nagorno Karabakh as part of Azerbaijan … Until a permanent peace settlement is reached and the political status of Nagorno Karabakh is resolved to all parties’ satisfaction, it will not be possible to assist the residents of this area beyond the level of humanitarian assistance.38 A small amount of assistance is given by Russia and Armenia to courts in their client states, although unofficially in the case of Russia and South Ossetia, since the Russian Federation formally recognizes Georgia’s sovereignty over the territory. The assistance which is given to South Ossetian courts is mostly ad hoc and comes from North Ossetia rather than the Russian federal government. For example, used office furniture and legal materials from North Ossetia have been donated to South Ossetian courts, and judges from South Ossetia occasionally travel north for training. North Ossetia and South Ossetia regularly exchange copies of their laws and legal borrowing takes place on this level, in addition to South Ossetia’s wholesale importation of the Russian federal legislative scheme. While South Ossetian cooperation with Georgian law enforcement agencies has been successful at

68 The State of Law in the South Caucasus

times, Georgian assistance to courts applying Russian law is out of the question. In Karabakh, more formalized assistance and training has been given by Armenia, including direct prosecutorial assistance in major cases.39 Often neglected in ‘court-centric’ analyses of law in Eastern Europe, legal professions and legal education are also critical to the performance of legal institutions. The most striking fact with respect to the legal professions in the separatist states is their low numbers. The lack of legal capacity is evident in all aspects of governance as well as at the bar. In Karabakh’s National Assembly, for example, only four of the thirty-three deputies have any legal training and, in South Ossetia, even ministries such as Justice are short of legally qualified staff. In South Ossetia there are only eight active advocates licensed to take criminal cases and in Karabakh the number rises to just twenty-two. Laws governing advocates’ activities are in force and are patterned after the Armenian and Russian equivalents.40 This legislation provides for the creation of professional associations, though these organizations – pillars of civil society in many countries – are weak. Lawyers litigating civil matters or doing transactional work are entirely unregulated. The status of lawyers is low and they are often thought to be corrupt.41 As in the case of judges, however, the general perception is also that lawyers are slowly becoming more professional. The challenges faced by the legal profession spill over into legal education. The majority of law lecturers are drawn from working judges, prosecutors and lawyers.42 They struggle to cope with the demands of inflated student numbers (the Law Faculty at the State University of South Ossetia has 192 full-time students and Artsakh University, which is Karabakh’s state university, has 104) and rarely undertake scholarship. Indeed the majority of lecturers spend little time at the university, perhaps not surprising given the low wages. At South Ossetia’s state university, part-time lecturers receive only US$8 per month and corruption is reported to be common. University buildings continue to show war damage and have little in the way of textbooks or other materials. One of the challenges facing legal education is the fact that, as with courts, little outside help is received. Faculty or student exchanges with the West do not exist, faculty do not attend foreign conferences and there is little foreign or current literature. Recently, however, some students who have obtained postgraduate degrees from Russian and Armenian law departments have returned and started teaching in the universities. Despite the isolation, the universities and their law departments look outward. At the university level, the rectors lobby international organizations and other donors to provide aid or technical assistance. They do so in part by citing international legal instruments with respect to access to education and the rights of children.43 The rectors also seek bilateral cooperation with universities in the metropolitan states which their republics wish to join. The universities’ law departments are especially externally oriented. Falling

Rule of Law in the Secessionist States 69

into step with the political goals of independence and, ultimately, union with Armenia and Russia respectively, no Azerbaijani or Georgian law is taught. The curriculum is patterned on law schools in the metropolitan states. Indeed, at Artsakh University, Karabakh’s main state institution, the law curriculum is identical to that of Yerevan State University, Armenia’s premier law school. Even Armenian constitutional law is studied intensively. International law, and in particular the European Convention on Human Rights, is also stressed, as it is believed that one day these republics will take their rightful place as states in the Council of Europe, and possibly even the European Union.44 Not surprisingly, international law courses pay a good deal of attention to the principle of self-determination. Compliance with the law The 1990s were in many ways lawless periods in both republics. Leaders had come to power through guns and were not keen to relinquish power. Powerful clans controlled government, business and the shadow economy. In South Ossetia in particular, there was a strong connection between government and smuggling, with local political bosses profiting from the illegal trade between Russia and Georgia through South Ossetia. It has already been noted that in the 1990s courts lacked independence from the government. In fact, across governmental institutions and security forces, autocratic and arbitrary behaviour was the order of the day. Not surprisingly, human rights abuses were common during this period and included arbitrary arrests and detentions. In both republics, however, the early part of this current decade represented a turning point. The high-water mark of human rights abuses in Karabakh followed a March 2000 assassination attempt on President Arkady Ghukasian and the subsequent arrest of the President’s political opponents. The arrests were followed by allegations of ill-treatment and denial of access to counsel for those in custody.45 A journalist critical of the ruling regime was also arrested, ostensibly for ‘hampering the implementation of martial law’.46 In the months and years following the arrests, however, improvements in the human rights situation have been made. For example, in a display of judicial independence twenty-one months after the assassination attempt, one of the convicted men – a high-profile former politician – was ordered to be released on appeal from his five and a half year sentence.47 More recently, there have been robust exercises of the freedom of expression. In October 2003 an independent journalist was permitted access to Karabakh’s prison (though not access to the supposed leaders of the assassination plot); in February 2004 there was widely publicised criticism of pay rises for officials; and, in April 2004, Karabakh’s first independent newspaper was opened.48 In terms of voting rights, recent mayoralty elections in Stepanakert, Karabakh’s capital, saw the election of a reformist mayor, despite the ruling party’s backing of his opponent. While noting concerns with voter lists, instances of pressure

70 The State of Law in the South Caucasus

on the media and unfair use of government resources, independent local observers credited the elections with being generally fair and transparent.49 In South Ossetia, the 2001 presidential election can be considered a turning point for human rights in that territory. During the race itself there were allegations of intimidation by supporters of the incumbent President, Ludwig Chabirov. When Chabirov – who is widely seen to have been corrupt and involved in the smuggling trade – lost at the polls, his armed supporters stormed Parliament in an attempt to force one of his contenders to withdraw. Ultimately the matter was settled peacefully and the winning candidate, Eduard Kokoity, recently returned from Moscow and outside of the politicocriminal loop, was duly appointed President. While human rights abuses and racketeering continue in South Ossetia, Kokoity is viewed as being more progressive than his predecessor and somewhat willing to clamp down on illegal exercises of authority.50 Summary on the rule of law At the end of the day it must be asked ‘how much’ rule of law exists in these republics. Carothers’ first requirement, that there be an acceptable legislative basis, has to a large extent been met in the de facto states. Although legislation has been created through wholesale importation, this is not unusual for other functioning – and internationally recognized – ‘micro-states’ lacking internal capacity to create a comprehensive legislative regime.51 The laws are imported by choice not by imposition and this method has the virtue of ensuring that there are no legal vacuums. The second requirement of the rule of law – functioning and fair institutions – goes beyond ‘law on the books’. Activities here include retraining judges, prosecutors, lawyers and police, restructuring the judiciary and improving court infrastructure. In the last few years, courts have been reorganized, appointments made more professionally, and some degree of judicial independence is evident. These improvements have been buttressed by a reorganization of the legal profession and a slowly modernizing legal education system. Corruption, however, remains a serious problem throughout the judicial system and in law enforcement.52 For Carothers, type three reforms ‘aim at the deeper goal of increasing government compliance with the law’.53 Corruption aside, compliance by officials with the law has improved. This has been aided by a slowly developing independent media and civil society. Furthermore, fair elections have been held in the two self-styled republics. Why those in power have allowed others to compete in elections – and indeed to have their authority curbed by law generally – raises questions which will be considered in the next section. Despite the large shortcomings in the legal systems in South Ossetia and Karabakh, progress has been made. Perhaps the most appropriate comparison to be made is with the neighbouring or ‘parent’ states. The legal systems in South Ossetia and Nagorno Karabakh are arguably weaker than they are

Rule of Law in the Secessionist States 71

in Russia, where strides have been made in recent years.54 But if they are weaker than the legal systems in the recognized South Caucasian states – Armenia, Azerbaijan and Georgia – they are only marginally so.55 As the other chapters in this book show, metropolitan South Caucasian states continue to face problems with respect to corruption, judicial competence, independence, impartiality and underfunding; this despite millions of dollars of foreign aid directed towards rule of law projects in the recognized South Caucasus states by international donors since the collapse of the Soviet Union and membership in various international organizations, including the UN and the Council of Europe.

Why is there some rule of law in secessionist states? Having established that the rule of law in the two case studies exists to an extent that is somewhat ‘normal’ for the region, the question can be asked, why? There can be no doubt that a reformed legal system is partly for international consumption: Karabakh and South Ossetia wish to show that they have effective and European-oriented legal systems and that these de facto states are worthy of international recognition. The territories’ leaders are mindful of the academic and policy debates over recognition and are particularly conversant on the effects of the break-up of Yugoslavia. Some international legal scholars have indicated that law matters in the quest for statehood, either as an element of government, or as a stand-alone category.56 Okeke has argued, for example, that ‘[I]f an entity has its own organs, such as law courts, legal system, and law of nationality, then one could say that there is a prima facie case of statehood.’57 Others have gone further, suggesting that adherence to democracy and legality (and not just law as an instrument of control) is an emerging criterion of statehood, or at least recognition.58 With respect to the former Yugoslvia, the European Community’s 1991 Declaration on Yugoslavia set out the conditions under which the new states would be recognized; these criteria included respect for human rights and minority rights in particular.59 In the case of Kosovo, a would-be state under international tutelage, Kosovars have been frequently told that they must get their own democratic and legal house in order before statehood can even be considered: the frequently repeated mantra is ‘standards before status’.60 Karabakh and South Ossetia’s leaders generally confess that one reason for maintaining a legal system is indeed to show legality to the outside world. As the head of Karabakh’s Parliamentary Standing Committee on State and Legal Issues said: ‘If legislation regulating courts did not partly correspond to European standards, then we would be isolated and would have no chance of relations with neighbouring states.’61 Similarly, the Foreign Minister suggested that through its legal system Karabakh ‘is trying to show that it is not an island cut off from the world’.62 The ‘show factor’, however, is not a sufficient explanation for the state of law in these case studies. While it might explain why the contours of a legal

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system would be put in place, it does not indicate why the legal system is more than a sham and why the rule of law (and not rule by law) continues to strengthen in the two territories.63 Or, as Stephen Holmes asks in a theoretical discussion on what causes the rule of law, ‘why governments, with the means of repression in their hands, might be induced to make their own behaviour predictable’.64 Applying this question to the cases at hand, we can ask why the leaders of Karabakh and South Ossetia, who have guns and power, and have the potential to profit by maintaining power, have allowed their actions to be restrained over time. Holmes, relying on Machiavelli, looks to leaders’ strategic self-interests for an answer. He argues that leaders make their actions predictable when they require the cooperation of subject groups to provide soldiers and taxes. The need for the cooperation of citizen-soldiers is especially urgent in the face of external threat: ‘a ruler who needs to raise a citizen army cannot keep his subjects apprehensive, disorganized, demoralized, mutually distrustful, passive, and incapable of collective resistance … a shrewd ruler will provide the poor and the weak with fair legal procedures, democratic participation and property rights’.65 These fair legal procedures and other democratic attributes also serve to provide the public with mechanisms to deal with grievance and denunciation in a way other than ‘backstreet ambush’.66 There is no question that the territories taken as case studies in this chapter are under constant threat. Frequent calls in Georgia and Azerbaijan are made for the return of their lost territories ‘by any means necessary’. In practice, this has meant the use of both soft and hard power. The soft power strategy has been to make promises of high degrees of autonomy for a return to the fold, as well as, in the case of South Ossetia, the distribution of presents and offers of aid to farmers by the Georgian government.67 In terms of hard power, there has been a steady build-up of military power in Azerbaijan and offensive moves pushing the ceasefire lines by both Georgia and Azerbaijan. Thus, despite the fact that there has not been all-out war since the ceasefires of the early 1990s, South Ossetia and Karabakh live on a more or less war setting. With insufficient numbers of soldiers in uniform, a recent flare-up of tensions provoked the South Ossetian authorities into arming their citizens in bordering villages.68 There is no room in this pressurized situation for citizen disloyalty or even antipathy. Even if the governments of the two secessionist states could repress all dissent within their borders and, through conscription, man their armies, they could not close the borders as neither is close to self-sufficiency. Thus another reason to minimize autocratic rule is to persuade citizens to stay. The borders between Russia and South Ossetia are porous, as are the borders between Karabakh and Armenia. Citizenship is also porous and it is reported that upwards of 80 per cent of South Ossetians have Russian passports.69 Many have already migrated and those that remain are needed to man the army and keep the economy going. Government leaders seem to understand that there is no point in controlling a territory that does not have citizens.

Rule of Law in the Secessionist States 73

As the head of Karabakh’s Parliamentary Committee on State and Legal Issues put it, ‘we need law for citizens to stay’.70 While caution must be exercised in generalizing from these two case studies, it does seem that the need for citizen support is a major factor in bringing about the rule of law in territories seeking statehood and recognition in the face of external threat.

Conclusion Break-away states, especially those which remain unrecognized and isolated, are often assumed to be lawless places. By taking two case studies, Nagorno Karabakh and South Ossetia, this chapter shows that the rule of law can grow in putative states, even those which occupy a marginal place in international life and whose very existence is under threat. By analysing laws, institutions and compliance with law by officials, it can be seen that strides have been made in the two territories to implement the rule of law. Results have fallen short – corruption remains endemic for example – but progress has been made. Furthermore, this progress is not simply for show to the outside world; although the actors in the putative states are aware that the rule of law is considered important in the struggle for recognition, they have gone beyond simply adopting new laws on the books and reorganizing the legal system to distance it from its Soviet roots. The development of the rule of law in these territories has also seen a reduction in the autocratic tendencies of rulers. A plausible explanation for this fact is that the leadership must curb autocratic tendencies if they are to have the loyalty of citizens in the face of external threats.

Notes 1. I am grateful to the British Academy for a grant making the fieldwork for this chapter possible. 2. The absence of scholarship on these states has been called a ‘critical gap’ in our understanding of the former Soviet Union. See D. Lynch, ‘Separatist States and Post-Soviet Conflicts’, International Affairs, 78 (2002), pp. 831, 832. 3. Report 1 of the Arbitration Commission of the European Conference on Yugoslavia, established pursuant to the Declaration of 27 August 1991 of the European Community. See Bulletin of the European Union, 7/8 (1991). 4. Other aspects of statehood are discussed below. I take no position here on whether the territories in question should be recognized and my use of the term ‘state’ is simply shorthand for the fact that these territories meet the territorial effectiveness test. In that sense I am operating under the declaratory theory of international law, which holds that recognition is merely evidence of statehood and does not create states. The leading text on statehood – and the effects of recognition – remains J. Crawford, The Creation of States in International Law (Oxford: Clarendon Press, 1979). See also R. Rich and D. Turk, ‘Symposium: Recent Developments in the Practice of State Recognition’, European Journal of International Law, 4 (1) (1993),

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5.

6. 7.

8. 9. 10.

11.

12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

23.

p. 36 and T. D. Grant, ‘Defining Statehood: the Montevideo Convention and its Discontents’, Columbia Journal of Transnational Law, 37 (1999), p. 403. Somaliland is a particularly striking case in that since 1991 it has acted as more of a state than has the state from which it broke, Somalia, of course providing the classic example of a ‘failed state’. Somaliland has a Constitution, a bicameral Parliament, elections and courts which work. See generally A. Huliaris, ‘The Viability of Somaliland: Internal Constraints and Regional Geopolitics’, Journal of Contemporary African Studies, 20 (2002), p. 157. Other examples include the territory in Ethiopia controlled by the Eritrean People’s Liberation Front, well before the recognition of Eritrea, and Kurdish-held territory since the 1990s in Iraq. As one journalist described the latter territory, ‘Up in its enclave, it [the Kurdish Workers Party or PKK] exacts customs duties and taxes on the local people, builds roads and the occasional clinic, runs a standing army of about 10,000 fighters … and overall acts like a mini-state’ (J. Burke, ‘Daughters of the Revolution’, Observer Magazine [11 May 2003]). The other post-Soviet example is the Pridnestrovyan Moldovan Republic (carved from Moldova). Only politicians are cited by name in order to protect the security and privacy of interviewees. See G. Smith, V. Law, A. Bohr and E. Allworth, eds, Nation Building in the Post-Soviet Borderlands: the Politics of National Identities (Cambridge: Cambridge University Press, 1999). For a good discussion of the conflict, see R. G. Suny, The Making of the Georgian Nation (Bloomington: Indiana University Press, 1994). ‘Georgian breakaway republic of South Ossetia seeks permission to join Russia’, Interfax (Moscow) (4 July 2004). On the difficulties of holding nationality of an unrecognized state, see A. Grossman, ‘Nationality and the Unrecognised State’, International and Compartative Law Quarterly, 50 (4) (2001), p. 849. Both sides in the conflict present radically different versions of events. I rely here on T. de Waal’s Black Garden: Armenia and Azerbaijan through Peace and War (New York: New York University Press, 2003). Ibid. at pp. 284–5. Although Georgians allege Russia was actively aiding the South Ossetian rebels, Russia never did so openly. Supra note 11 at pp. 285–6. ‘The Hazards of a Long, Hard Freeze’, The Economist (19 August 2004). Ibid. T. Carothers, ‘The Rule of Law Revival’, Foreign Affairs, 77 (2) (1998), pp. 95–6. Proclamation of the Nagorno Karabakh Republic (2 September 1991). Ibid. Declaration of State Independence of the Nagorno Karabakh Republic (6 January 1992). Ibid. As T. D. Grant notes (supra note 4 at p. 415), international lawyers cite the Montevideo Convention on Rights and Duties of States, 165 LNTS 19 (1933), as ‘nearly a reflex’. Despite its inadequacies the four criteria for statehood set out in the Convention are well known: permanent population, defined territory, government and the capacity to enter into relations with other states. Constitution of the Republic of South Ossetia (8 April 2001), replacing the 1993 Constitution.

Rule of Law in the Secessionist States 75 24. 25. 26. 27.

28. 29. 30.

31. 32.

33. 34.

35. 36. 37. 38.

39. 40.

41.

42. 43.

Ibid., article 10. Ibid., article 11. Interview with A. Ghoulian, Karabakh’s Minister of Foreign Affairs, 21 April 2003. Resolution of the Supreme Soviet of the Nagorno Karabakh Republic ‘On Establishing Temporary Legislative Regulations on the Territory of the Nagorno Karabakh Republic’ (6 June 1992). Untitled Resolution passed by the Supreme Soviet of the Republic of South Ossetia (29 January 1992). Interview with L. Gagloev, 11 September 2003. The doctrine of unsuitability is known to the common law as well, having been used by courts in the colonial context. See J. E. Cote, ‘The Reception of English Law’, Alberta Law Review, 15 (1977), p. 29. Supra note 29. Although it should be noted that South Ossetia’s primary cultural identity is with North Ossetia, rather than with the Russian Federation generally. Cooperation between North and South Ossetia is discussed below. On links between cultural identity and law see N. Kasirer, ‘Lex-icographie mercatoria’, American Journal of Comparative Law, 47 (1999), p. 653. Supra note 26. See, for example, the provisions on non-interference and the prohibition on the use of force as stated in the General Assembly Declaration on Principles of International Law Concerning Friendly Relations and Co-operation among States in Accordance with the Charter of the United Nations (G.A. Res. 2625, XXV, [24 October 1970]). Interview with Karabakh judges, 22 April 2003. Interview, 11 September 2003. Corruption is endemic in other organs of the legal system. For example, the ‘going rate’ for a position with the Procuracy is reported to be US$500. ‘Nagorno-Karabakh Program’ on US Agency for International Development, Mission to Armenia website. Available at http://www.usaid.gov/am/nk.html. Although beyond the scope of this chapter, it may be time to reassess the international community’s policy of non-engagement with secessionist states on rule of law reform. The current policy – citing the mantra of territorial integrity – is not necessarily the best way to help in the peaceful resolution of the status of such territories and has a negative impact on immediate problems such as the return and reintegration of the internally displaced. Interviews at the Procuracy, 23 April 2003. The 1999 Karabakh Law on Advocate Activity is based on the 1998 Armenian version, with only minor differences between the two; where, for example, article 25 of the Armenian act refers to a requirement that fifty advocates are required to establish a union of advocates, article 25 of the Karabakh law requires only ten advocates. Unofficial translations of the two laws are on file with the author. This is partly accounted for by low legal aid rates, with lawyers in Karabakh receiving the equivalent of less than 60 US cents per hour. Lawyers report that delays or nonpayment of legal aid bills by the state are common. There is no set tariff for nonlegally aided cases. Interviews at Karabakh’s Union of Advocates, 23 April 2004. Interviews at the Law Department of Artsakh State University, 23 April 2003. ‘Appeal to UNESCO, UNICEF, International Educational, Scientific and Humanitarian Institutions and Organisations’, undated letter from the Rector of Artsakh University, H. Grigorian (on file with author).

76 The State of Law in the South Caucasus 44. This prospect seems slightly more realistic in light of the European Union’s recent decision to include the South Caucasus in the European Neighbourhood Policy, and its renewed efforts to help solve the region’s ethno-territorial conflicts. See http://europa.eu.int/comm/world/enp/index_en.htm. 45. Amnesty International, Concerns in Europe, January–June 2000: Azerbaijan (21 August 2000). 46. Ibid. 47. Amnesty International, Concerns in Europe, July–December 2001: Azerbaijan (30 May 2002). 48. A. Beglarian, ‘Karabakh Prisons: a Rare Glimpse Inside’, IWPR’s Caucasus Reporting Service (19 October 2003); M. Mkrtchian, ‘Karabakh Teachers Angry at Pay Rise’, IWPR’s Caucasus Reporting Service (5 February 2004); and A. Beglarian, ‘Karabakh: First Independent Paper’, IWPR’s Caucasus Reporting Service (28 April 2004). Available at http://www.iwpr.net. 49. ‘Reformist Candidate Prevails in Stepanakert Mayoral Election’, Armenia This Week (23 August 2004). Available at http://www.aaainc.org. 50. On racketeering in the unrecognized post-Soviet states, see Lynch, supra note 2 at p. 840. 51. Large swathes of law are shared between the European micro-states and their larger neighbours. See J. Duursma, Fragmentation and the International Relations of Micro-States: Self-Determination and Statehood (Cambridge: Cambridge University Press, 1996). 52. Interviews with ordinary citizens revealed the existence of an informal tariff in Karabakh; for example, drink driving charges can be avoided by paying US$100. 53. Carothers, supra note 17 at p. 100. 54. See P. H. Solomon, ‘Putin’s Judicial Reform: Making Judges Accountable as well as Independent’, East European Constitutional Review, 11 (2002), p. 117. 55. See C. P. M. Waters, Counsel in the Caucasus: Professionalization and Law in Georgia (Leiden: Martinus Nijhoff, 2004). 56. Crawford, supra note 4 at p. 75, has argued that ‘ “legal order” is an important element of government, hence an indication of statehood; but its status as a distinct criteria is open to doubt’. 57. C. N. Okeke, Controversial Subjects of Contemporary International Law (Rotterdam: Rotterdam University Press, 1974), p. 30. 58. See Grant, supra note 4 and S. D. Murphy, ‘Democratic Legitimacy and the Recognition of States and Governments’, International and Comparative Law Quarterly, 48 (1999), p. 545. 59. See UK Materials on International Law, British Yearbook of International Law, 62 (1991), pp. 560–1. 60. See the 30 April 2004 statement on Kosovo by the President of the UN Security Council, S/PRST/2004/13. Available at http://www.un.org/News/Press/docs/2004/ sc8082.doc.htm. 61. Interview with Y. Hayrapetian, 22 April 2003. 62. Interview with A. Ghoulian, 11 September 2003. 63. Though for an argument that the separatist states have no faith in the rule of law, see supra note 2 at p. 841. 64. S. Holmes, ‘Lineages of the Rule of Law’, in J. M. Maravall and A. Przeworski, eds, Democracy and the Rule of Law (Cambridge: Cambridge University Press, 2003). 65. Ibid. at p. 32. This rational choice explanation is not a complete one – cultural, historical and other factors also play a role – but it is surely part of the answer, and

Rule of Law in the Secessionist States 77

66. 67. 68. 69. 70.

one often ignored by legal scholars who ask the question, ‘what is the rule of law?’ more often than they ask ‘how does the rule of law come about?’ Ibid. at p. 36. D. van der Schriek, ‘South Ossetia Gets Ultimatum, Rejects Georgian Aid’, Eurasia Insight (23 June 2004). Available at http://www.eurasianet.org. T. Freese, ‘With All Roads to Tskhinvali Closed, Conflict Zone Residents Pray for Saakashvili and Peace’, Central Asia-Caucasus Analyst (30 June 2004). ‘President of Georgian Secessionist Region Appeals for his Region to Join Russia’, Associated Press (10 June 2004). Interview with Y. Hayrapetian, 22 April 2003.

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Part II Lawyering

As advisers to the state, companies, NGOs or individuals, lawyers play a crucial role in promoting and protecting the rule of law. So too do professional organizations in upholding professional standards and protecting lawyers’ independence. In Chapter 5, Claude Zullo examines the profession of lawyering in the South Caucasus by considering the status of lawyers, the provision of legal aid and the maintenance of professional standards. While Armenia, Azerbaijan and Georgia all now have legislation governing lawyers, important differences can be seen across the region. Zullo suggests that, particularly in the post-Rose Revolution context, Georgian lawyers are more independent from government than their colleagues in Armenia or Azerbaijan. The quality of lawyering is partly dependent, however, on the quality of legal education. Focusing on Azerbaijan, Charles Davidson and Nancy Sharp Nti Asare suggest in Chapter 6 that legal education continues to show its Soviet heritage in terms of curricula, teaching methodologies and administration. Graduates, they suggest, are ill-equipped for the demands of a regulated market economy.

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5 Lawyers in the Caucasus: Climbing out of the Communist Shadows Claude Zullo

Introduction The role of lawyers in legal systems in transition countries is not well understood. For example, democracy scholar Thomas Carothers has argued that ‘the emphasis on judiciaries is widespread in the rule-of-law field, with the terms judicial reform and rule-of-law reform often used interchangeably.’1 That is not to say that funders of rule of law technical assistance do not recognize the importance of reforming and strengthening the profession of lawyers in the context of advancing broader rule of law reform. However, there has been little in the way of articulating why it is that lawyers are important to broader rule of law reform and economic development. In short, the approach to reforming the profession of lawyers has been more a mantra than a clear understanding of how it is this profession fits into the larger constellation of transitional legal systems. Independent lawyers as a group are a cornerstone of democracy and rule of law systems for several reasons. First, independent lawyers assist persons and organizations in defending fundamental rights and freedoms vis-à-vis the state. They, unlike judges and prosecutors, do not constitute an arm of the government, but rather they represent the interests of their clients. Second, lawyers play a critical role in the functioning of a market-oriented economy based on the right of private property and freedom to contract, especially given the complexity of the legal framework undergirding many economic transactions. Third, in a broader context, active bar associations are part of the patchwork of organizations that make up civil society. For example, organizations such as the American Bar Association and Council of the Bars and Law Societies of the European Union (CCBE) exist to provide venues through which members of the profession can aggregate and express their opinions on public policy issues that affect their practices and the legal rights of the general public. In many emerging democracies, however, lawyers and bar associations fail to fulfil these roles for various reasons. For example, lawyers and bar 81

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associations may be subject to direct control, improper interference or intimidation by the government. Moreover, lawyers may constitute a part of a corrupt justice system, channelling bribes from parties in a case to court officials. In many post-Soviet countries the legal system is still dominated by the procuracy (prosecutor’s office), and legal practices and legal culture discourage lawyers from vigorously defending their clients. For instance, in Azerbaijan, advocates have been referred to as ‘ “musicians at a funeral” – you need them for the ceremony, but they can no longer really do anything for you’.2 The three countries of the Caucasus pose an interesting comparison in terms of the development of the profession of lawyers and the provision of legal services, in that each country is beset by similar problems. All three countries face challenges such as a lack of access to justice for ordinary citizens, an imbalance of power in the courtroom between lawyers and prosecutors, corruption within the legal profession and within the legal education system, a lack of high professional standards, and the absence of strong and independent bar associations. At the same time, there are clear differences with respect to the breadth and speed of reforms aimed at addressing these challenges. Georgia seems to have the most independent profession of lawyers and appears poised to advance even further given the current government’s commitment to reform.3 At the opposite end of the spectrum is Azerbaijan, which still has a rather weak and corrupted criminal defence bar and whose government appears to be retrenching against reform in the wake of events across the border in Georgia. Armenia falls somewhere between its two neighbours, with lawyers having made some important advances in their independence but being still very much in the shadows of the communist past. Getting a detailed snapshot of the state of the profession of lawyers would require assessing a host of issues beyond the scope of this chapter.4 Rather what this chapter attempts to accomplish is to give a comparative assessment of the profession of lawyers in Armenia, Azerbaijan and Georgia by focusing on several key issues, including the status of lawyers, the provision of legal aid services and professional standards. However, before delving into a survey of the profession, some context is required to understand the issues discussed in this chapter.

Overview of the legal profession Although understanding who is a lawyer may appear to be a straightforward concept, the definition is not universal. Indeed it will vary from country to country based on the country’s legal tradition5 and on particular circumstances surrounding the development of the legal profession. For example, in the United Kingdom, there is a divided profession, with barristers and solicitors performing different functions. In a number of countries with civil

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law traditions, notaries are typically required to have law degrees and perform official public documentation functions and real estate and other property transactions. However, in the United States, notaries are not required to possess a law degree and perform very limited legal functions such as bearing witness to the signing of important documents and administering oaths. In all three Caucasus countries, anyone who graduates from a law school is referred to as a jurist, regardless of whether he or she is practising law per se. After law school, jurists may pursue careers as judges, prosecutors, criminal investigators, in-house counsel, notaries, advocates (loosely defined as criminal defence lawyers) and civil practice lawyers. The last two categories of legal professionals are the subject of this chapter, because they are the principal interlocutors through which individuals and organizations obtain representation in proceedings before the courts and vis-à-vis the state in the Caucasus.6 But again, how these professions are defined varies in each country. In Armenia, advocates are lawyers who are licensed by the state and who belong to one of Armenia’s two advocate unions (bar associations).7 Advocates are the only lawyers who can represent defendants in criminal court cases, but they can also represent clients in civil and commercial legal matters. Independent civil practice lawyers – those who are not corporate or governmental in-house counsel – can represent individuals and organizations in non-criminal matters. Civil practice lawyers are not required to join a professional organization, nor are they required to pass a qualification process, as is the case with advocates.8 The situation in Azerbaijan is similar to Armenia in that only advocates can represent defendants in criminal cases. However, the distinction in Azerbaijan is that advocates must be members of the Collegium of Advocates, a remnant of the Soviet legal system both in form and substance. Independent civil practice lawyers can represent individuals and organizations in non-criminal matters and are not required to join a professional organization or to pass a qualification process, as is the case with advocates.9 Georgia poses a much different and, at the moment, a more fluid situation with regard to representing clients in civil and criminal cases. Advocates are currently defined as those lawyers that have received a certificate from their law firm, corporation or other relevant bodies, authorizing them to represent clients in court. However, this will change by June 2006, after which time, the Law on Advocates requires all practising lawyers to pass an official bar examination and to be a member of the new mandatory bar association, which was due to be formed by January 2005.10 In the case of Georgia, advocates will be defined as lawyers who are licensed to practice civil or criminal law or both, depending on which bar examination they passed, i.e. lawyers who passed the general examination will be allowed to practise both criminal and civil law. Those that passed either the civil- or criminal-specific examination will only be allowed to practise in that area of the law.11

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The status of the legal profession During the Soviet era, advocates occupied the bottom rung of a legal hierarchy that was dominated by the procuracy. ‘Although the Soviet Constitution included a right to counsel and presumption of innocence, the role of the advocate was limited … the best the advocate could hope for was to obtain a more lenient sentence by throwing his client on the mercy of the court (and the prosecutor).’12 There were few civil cases, apart from divorces and inheritance disputes, due mainly to the limited number of commercial and property rights subject to dispute. Still, in important matters (or if a party in a case had the right personal connections), a prosecutor could intervene to influence a judge’s decision and could even reopen closed civil and criminal cases.13 A decade and a half after the collapse of the communist system, the status of lawyers is a ‘mixed bag’. In some respects, they have fared better as a profession, in other instances, less so. In Azerbaijan, not much has changed since the days of the Soviet legal system. Judges for the most part follow the procuracy’s recommendations with regard to verdicts and sentencing in criminal cases and give preferential treatment to the prosecutor in the courtroom. Moreover, those advocates that have actively and vigorously defended clients in the past are effectively cut out of the legal aid system by prosecutors during the pre-trial investigation process. It is reported that prosecutors will tell a detainee that if he or she chooses an advocate who is known for his or her willingness to challenge the charges and evidence presented, the prosecutor will seek to impose the severest punishment on him or her. However, if the detainee accepts representation from an advocate proposed by the prosecutor, the latter will seek a lighter punishment.14 Given the low acquittal rates, the lack of legal awareness among the general populace, and the perception of the power of the procuracy, there is little incentive to do other than what a prosecutor demands. These types of practices have conspired to keep the advocatura a weak institution even after Azerbaijan attained independence and formally shed the communist legal system. Difficulties similar to those experienced by criminal defence lawyers who are perceived as ‘too independent’ await civil practice lawyers in Azerbaijan if they have been too critical of the government. Several civil practice law firms claim that large companies, which tend to be more lucrative as clients, will not retain the services of law firms that are not on good terms with the government for fear of jeopardizing their own standing. Often when these law firms present larger companies with a contract to formalize the latter’s request for legal advice, the companies will decline to sign the contract until the law firm in question has settled whatever dispute it may have with the government. In Armenia, the status of lawyers is somewhat better. For example, advocates are now independent from the Ministry of Justice and are self-managing. They also have better access to information relevant to presenting a client’s case than in the past. For example, the Armenian Criminal Code of Procedure

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permits, among other things, advocates to participate in an interrogation of a client, to participate in investigations by investigators or prosecutors, and to object to actions taken by prosecutors and to have those objections included in a case file.15 Still, there is a perception among Armenia’s legal community that judges offer preferential treatment and show greater deference to prosecutors than to advocates.16 Moreover, advocates, as a profession, ‘have not yet become the powerful and respected profession they should be. While more law students are interested in becoming advocates, this is principally because the profession can be more lucrative than becoming a prosecutor or a judge.’17 In Georgia, lawyers seem to have fared the best in terms of status.18 Anecdotal evidence suggests that lawyers are treated equally before courts in Tbilisi, particularly before the appellate courts and the Supreme Court; however, in the regional courts, deference towards the procuracy and the government seems to be more prevalent. In addition, the Georgian court system now includes a number of elements of the adversarial court model, in contradistinction to the predominantly inquisitorial system used in Armenia and Azerbaijan. This has presented lawyers with the opportunity to play a more active role in the courtroom. For example, the Georgian Constitution specifically states that legal proceedings must be carried out on an adversarial basis, and the Criminal Code of Procedure obliges judges ‘to refrain from seeking evidence that corroborates the accusation or favors the defence’.19 In addition, Georgia recently introduced plea bargaining into its Criminal Procedure Code. This systemic distinction will likely be even more pronounced with the anticipated passage of a new criminal code of procedure that may contain additional adversarial elements. While the picture is mixed as to how lingering attitudes from the communist era affect the status of lawyers, there seems to be a universal perception in all three countries that lawyers are part of a corrupt legal system. As noted in Chapter 1, lawyers often play the role of intermediary between their clients and judges and prosecutors when it comes to passing bribes from the former to the latter. In Azerbaijan, ‘advocates are viewed simply as a tool to negotiate the pay off’,20 and, in Georgia, ‘many of the “best”, in-demand lawyers … are known to pass bribes to judges, prosecutors or investigators.’21 Corruption is such an integral part of the legal system that, in many cases, informal rules have developed as to the percentages paid to the court officers presiding over a particular case. In Azerbaijan, for example, it is reported that advocates receive 10 per cent of a bribe plus an amount to cover basic business costs incurred. The remainder is then divided between the judge and the prosecutor, with a certain amount of the latter’s portion being chanelled to his or her supervisors.22

Legal aid In all three countries, citizens have a formal right to state-funded legal services for indigent persons.23 However, legal aid is malfunctioning and is plagued by the presence of ‘pocket advocates’, or advocates who collude

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with investigators and prosecutors in denying the rights of criminal defendants. The problems in the legal aid systems stem from a number of deficiencies. First is a lack of sufficient funding. An ex-officio advocate, hired by the state to represent an indigent client, will receive approximately $1.50 per hour in Armenia, approximately $0.30 per hour in Azerbaijan, and $1.10 per day in Georgia.24 In addition, it may take a long time for advocates to receive remuneration for legal aid services, and, in some cases, they may not receive it at all.25 Because of the low remuneration or the lack thereof, the financial incentive to pursue a vigorous defence for their clients is lacking. While many advocates reportedly take their duty to provide legal aid seriously, the lack of proper funding often poses an obstacle to their ability to pursue a vigorous defence simply from a standpoint of resources. Second, there are insufficient numbers of licensed advocates in all three countries. This is to a large extent connected to the monopolization of legal aid services by one particular advocates union and a bottleneck in the advocate admissions process in some instances. In Azerbaijan and Georgia, the Collegia of Advocates, remnants of the Soviet legal system, still maintain a monopoly over the provision of legal aid. In Armenia, it is the Union of Advocates of the Republic of Armenia (UARA), which is the successor organization to the Soviet-era Collegium of Advocates.26 However, in Armenia and Azerbaijan, few advocates have been admitted to the profession for a considerable period of time, due to political inertia on the part of the respective governments over reforming the profession. Thus the ratio of advocates to the populace has worsened because of attrition. The case of Azerbaijan is the most disconcerting. The 2000 Law on Advocates and Advocate Activity has provisions for a bar examination process; however, it has not been implemented because of ambiguities in the law and out of political considerations. A struggle, between reform-minded lawyers and international organizations trying to strengthen the independence of advocates on one side and the government and Collegium of Advocates interested in keeping the advocatura under governmental control on the other, has led to a state of inertia on the matter of admitting more lawyers to the profession. As a result, the number of advocates, which was already small both in absolute and relative terms, has declined further. A recent estimate puts the current ratio of advocates to citizens at just under 1: 23 000;27 however, the situation is even more dire for persons living outside of the capital, Baku. Of the estimated 350 advocates in the country, approximately 300 practise in Baku. Some areas of the country have no advocates at all and criminal proceedings continue without representation for individuals.28 Third, the presence of ‘pocket advocates’ presents another serious problem plaguing the legal aid systems of all three countries. The role of pocket advocates arises in cases in which an investigator wants to assign an attorney to an indigent defendant, whom the investigator knows will not challenge his

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or her case. In some instances, it has been reported that a pocket advocate will actually provide information to the investigator to the detriment of his or her client.29 The investigator may also assign a pocket advocate to a suspect or a defendant in order to get the latter to waive his or her right to an attorney. In order for an investigator to obtain a waiver, an advocate must co-sign a waiver along with the defendant or suspect and the investigator. However, what typically happens is that an investigator will tell the suspect or defendant that he or she does not need an advocate and have the person sign the waiver without an advocate present. Later on, the investigator will ask a pocket advocate to sign the waiver without the suspect or defendant being present. Two ingredients that feed the existence of pocket advocates are the lucrative aspect of criminal cases and the control that investigators and prosecutors have over the compensation received by advocates. In the first instance, criminal cases tend to be the most profitable from a corruption standpoint for the simple reason that most persons accused of a crime will do almost anything to stay out of prison or at least obtain a reduced sentence. Prison conditions in all three countries are horrid by any standard.30 It is common for the accused to use whatever savings he or she may have and/or to borrow money from relatives and friends to pay a bribe in order to avoid jail or at least to reduce the time spent in prison. Moreover, judges and prosecutors reportedly pay large sums to obtain their positions.31 In order to amortize the cost of their positions and to pay their superiors their due, judges and prosecutors will demand considerable amounts of money for grave criminal cases. Obviously, not everyone can afford to pay substantial bribes. As a result, the unfortunates who do not have the money usually are the ones who end up in jail for significant amounts of time. The control that prosecutors and investigators have over compensation for ex-officio advocates is another lever through which advocates can be controlled. Advocates’ compensation in legal aid cases is based on the amount of time they spend with the defendant in detention, studying the case files at the investigator’s office and representing the client during the trial. However, it is the prosecutor or investigator who approves the number of hours for which the advocate receives compensation, creating an inherent conflict of interest. The advocate’s main function is to challenge the claims, decisions and evidence presented by investigators and prosecutors; however, if the advocate knows that the person whom he or she is challenging determines how much compensation they will receive, there is a possibility that the advocate may not always carry out their responsibilities in the zealous manner required of an independent professional. In this respect, it is fortunate that the fees received by ex-officio advocates are small, thus lessening the incentive to engage in this sort of conflict of interest. Moreover, legal professionals in Armenia and Georgia seem to think that the number of lawyers willing to serve as pocket advocates is decreasing.32

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Professional standards Interrelated with the problems of the status of lawyers and legal aid in the Caucasus are low professional standards that contribute to this state of affairs. Low standards appear in several forms. The quality of law school education is poor and the educational system corrupt. With the exception of Georgia’s recent bar examinations, there have been no or inadequate procedures for ensuring minimum knowledge of the law among practising lawyers. Moreover, bar associations, where they exist, lack the means to provide continuing legal education for their members and meaningful codes of ethics and procedures for disciplining members who violate ethical principles. Law schools throughout the Caucasus graduate too many lawyers, most of whom are woefully unprepared to represent clients.33 For example, in a recent survey of employers of law graduates in Armenia conducted by the American Bar Association’s Central European and Eurasian Law Initiative (ABA/CEELI), the consensus among the survey participants was that law students have a strong theoretical knowledge of the law, but they lack practical experience.34 It is fair to say that this sentiment applies to Georgia, and, as pointed out in Chapter 6, to Azerbaijan as well. There seem to be three major problems with legal education in all three countries. First, the curriculum tends to be very theoretical in nature and involves rote memorization of lectures with little emphasis on legal reasoning, critical thinking or practical lawyering skills.35 Several rule-of-law programme implementers, including the Open Society Institute, ABA/CEELI, and the University of Maryland’s Centre for Institutional Reform and the Informal Sector (IRIS), do support legal clinics to provide practical skills training for students, but they are not yet self-sustainable, nor do they provide enough opportunities for all students who seek practical skills training. Moreover, students typically do not yet receive academic credit for their participation in these programmes. Second, law schools often lack adequate legal resources and materials with which to train students. Textbooks are either very expensive or unavailable to the average law student. Reading materials may be available at the university library, but there are usually not enough books available to meet the needs of students. Assuming the textbooks/legal materials are available, they are often outdated or not in the national language.36 Third, corruption is very rampant in the law schools of all three countries. Typically, students have to pay for admission to law school, for grades and to receive a diploma. Corruption may come in the form of direct payments or it could be a tit-for-tat, in which students are required to purchase a textbook authored by the professor in return for a decent grade. Corruption works in the other direction as well, with some students having a friend or relative pulling strings in order to ensure admission or contacting a professor about the student’s grade.

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An accreditation process is taking place in Armenia and similar processes are now being contemplated in Azerbaijan and Georgia. However, these processes do not assess individual professors or law school infrastructure. Moreover, they are susceptible to corruption as well. Georgia lags behind the furthest in this regard despite attempts to reform legal education.37 There are also initiatives underway to reform teaching methodologies and curriculum, but these are long-term projects.38 With the recent exception of Georgia, once law students graduate there are no meaningful processes in place to ensure that they have a minimum level of knowledge to practise law. Qualification examinations for advocates have not been administered for some time in Armenia and have yet to be administered in Azerbaijan. To be fair, it should be recognized that both Armenia and Azerbaijan are taking steps to rectify the situation for advocates. For example, the amended Azerbaijani Law on Advocates and Advocate Activity requires an advocate to have a law degree, to have three years of work experience as a jurist or in a legal field, and to pass a written and oral examination.39 Moreover, the law envisions the creation of a new advocate’s assistant position. Armenia has a similar law pending. Despite these positive developments, similar standards have not been established for civil practice lawyers in Armenia and Azerbaijan. In fact, persons without any law training whatsoever may represent parties to a civil case. Although better standards for advocates will exist (at least on paper), the distinction between civil and criminal practitioners will remain and, with it, the lack of appropriate qualification/licensing mechanisms and procedures. There has been no study thus far to determine the impact of this state of affairs on the public’s trust in the profession, but it is likely to have a negative impact if bad legal advice is being dispensed, which again anecdotal evidence suggests is the case. With respect to advocates, there are concerns that the oral parts of the Armenian and Azerbaijani examination processes for advocates may be subject to bribery and to candidates passing a political litmus test. For example, the Azerbaijani qualification commission for advocates is supposed to consist of five lawyers (selected by the Presidium of the Collegium), three judges and three legal scholars. Even if the Collegium, which still follows the government’s lead, manages to select independent members, the remaining six members will have been selected by the Azerbaijani Ministry of Justice, leaving the government in control of the admission process to the profession. Georgia has managed to avoid this concern by requiring advocate candidates to pass only a multiple choice test that is both transparent in grading and that has an effective appeal mechanism.40 In addition to the challenges with admission to the profession, continuing legal education (CLE) for lawyers is spotty. In all three countries, there are no requirements that lawyers participate in CLE programmes and an insufficient number of indigenous organizations that provide lawyers with training on a

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regular basis on the most recent changes in the law. There are several international NGOs and organizations, such as the Open Society Institute, ABA/CEELI, the UN High Commission for Refugees, and IRIS that do implement and support training activities through local organizations, but again they are not held on a regular basis nor are they always accessible to lawyers in areas outside the capital. This is a matter of significant importance given the sweeping legal changes that have recently been experienced by all three countries and that will continue at a swift pace if they are to meet their Council of Europe (CoE) commitments and strive for harmonization with European Union law. In the case of Georgia, in addition to its CoE and other international commitments, it is also grappling with another wave of sweeping legal reforms in the post-Shevardnadze era, such as significant changes in the Criminal Procedure Code – including the institution of jury trials – privatization and tax code reform. Even for lawyers in countries with welldeveloped CLE systems, it would be a challenge to stay current. Yet another challenge to professional standards as a whole in all three countries is the lack of meaningful ethical and disciplinary codes and procedures. In Azerbaijan and Georgia, there are no comprehensive codes of professional conduct yet for advocates or for civil practitioners. In Azerbaijan, ethical standards are elaborated in the current Law on Advocates and Advocates Activity; however these are at best guidelines – with no enforcement mechanism and no deterrent effect – and most advocates are unaware of their existence.41 The law does call for the establishment of a disciplinary committee, which is supposed to be appointed by and act in accordance with regulations adopted by a general meeting of the Collegium of Advocates; however, since the Colleguim has not held a general meeting since 1995, the committee was never appointed nor have any regulations been adopted.42 Armenia’s two existing advocate unions have each enacted their own codes of conduct and various laws provide guidance on the professional behaviour of advocates, but the codes and laws are incomplete and vague in many instances. In practical terms, many advocates are unaware that their respective unions have such codes, and enforcement is spotty given the numerous instances of unethical conduct by advocates.43 As regards civil practitioners, the voluntary Bar Association of the Republic of Armenia (BARA) does have a code of conduct, but it only applies to its members and has no enforcement mechanisms, meaning that if a BARA member were in breach of the code, it would have absolutely no impact on his or her ability to practise law.44 In advanced legal systems, it is usually the national or state bar association that is responsible for regulating admission to the profession, for organizing continuing legal education opportunities, for disciplining lawyers for ethical breaches, and for advocating on behalf of professional interests; however, in all three countries, bar associations have fallen short of the mark for various reasons.

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In Georgia, this is the case simply because there is as yet no official bar association to undertake these responsibilities, although the Georgian Young Lawyers Association does provide some training opportunities for its members and has been vigorous in advocating on a number of issues that are pertinent to lawyers. The Collegium of Advocates in theory could have fulfilled this role, but it has been seen as a rather corrupt organization. Moreover, it lost its monopoly over criminal case representation and, as a result, lawyers no longer have to join the organization to practise criminal law. Even if it were to promulgate an effective code of conduct, application would be limited to its members. A new mandatory bar association is due to be organized in the spring of 2005. There is some preliminary discussion about the new association assuming many of the responsibilities described above once it is organized. In Azerbaijan, the Collegium of Advocates is not required by law or by a charter to establish professional standards or to provide CLE opportunities for its members, nor does it seek to do this in practice.45 In truth, the Collegium mostly serves as a mechanism through which the Azerbaijani government can exercise control over activist advocates and for facilitating corrupt practices. Other voluntary associations, such as the Lawyers Forum and the Azerbaijan Young Lawyers Union, do, however, try to fill some of these roles. Both organizations, for example, have been actively involved in the debate surrounding the Law on Advocates and Advocates Activity, and the Forum has proposed the only code of professional ethics for advocates. Both organizations also provide training opportunities for members and other interested parties, but are also dependent on funding from international donors. In Armenia, the advocate unions and other voluntary bar associations seem to have done a reasonable job in promoting the interests of their respective members, particularly as related to the lobbying on the Law on Advocates and Advocates Activity, and in providing CLE opportunities. However, the effect of not having a unified bar association has weakened the voice of lawyers on this and other critical issues. In addition, many of the services provided to its members are largely limited to the capital, Yerevan, and are dependent on support from international donor organizations.46

Conclusion The Introduction to this book suggests that three types, or perhaps more appropriately, three phases of reforms are needed in order to institute the rule of law. These include rewriting or modernizing laws themselves, reforming legal institutions, and requiring government compliance with the law. To a large extent, reforming the legal profession can be seen as microcosm of all three phases of rule of law reform in the Caucasus. Moreover, the state of the profession is also a barometer for the state of rule of law reform in all

92 The State of Law in the South Caucasus

three countries because of the roles they are supposed to play in the legal and democratic systems. All three countries have introduced sweeping changes to their legal frameworks, usually at the insistence of international organizations, such as the Council of Europe, and Western donor governments. The results of these changes, however, have been mixed at best. For example, many laws have been copied wholesale with little public vetting and, as a result, laws that conflict with one another have been adopted; many include vague provisions that are open to interpretation (and corruption); and enforcement sanctions or the appropriate bodies to implement the legislation are lacking. The same holds true for the laws regulating lawyers in the Caucasus. Consequently, it has taken several legislative iterations to correct initial flaws, and, in some cases, flaws still remain. Despite these imperfections, it is fair to say that, on paper, lawyers in the Caucasus have made a significant first step in terms of their independence from the state, though additional reforms in the areas of increased independence, legal aid, legal education, ethical standards and discipline are still needed. Whether deeper reforms materialize will depend on the success in reforming legal institutions and securing government legal compliance. Institutional reform and government compliance are arguably greater challenges for reforming the profession of lawyers and advancing broader rule of law reform. Success in retraining government officials and legal professionals and in restructuring the courts, bar associations and government agencies – with success being defined as changing such things as behaviour and procedures – is largely dependent on changing mindsets. A ‘here today, gone tomorrow’ attitude is still very much prevalent among elites and the population at large, which creates a tendency to refrain from long-term strategic considerations and undermines the development of political will for change. In order to change this, some type of paradigm shift is needed. The Rose Revolution of November 2003 seems to have created an environment that would enable such a shift in Georgia. The questions remain whether reform momentum can be sustained, and, if it can be, whether it will have positive knock-on effects for Armenia and Azerbaijan.47 There are a number of lawyers who are committed to reforming the profession regardless of which way the political winds will blow in Georgia in the near future. However, the new Georgian Bar Association, and most lawyers, will pick up cues from the perceived direction of reform. If the Association and its members begin to move closer to meeting international standards of independence and professional conduct, this will be a good indication that the broader rule of law framework is also moving in that direction. Moreover, if the Georgian experiment succeeds, this will put greater pressure on its neighbouring governments to follow suit and, along with it, expectations on the part of Armenia’s and Azerbaijan’s lawyers of transformation into a modern legal profession. In the absence of that

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success, it is reasonable to expect that the region and its lawyers will continue to muddle through in their efforts to climb out of the communist shadows. Notes 1. T. Carothers, ‘Promoting the Rule of Law Abroad: the Knowledge Problem’, The Carnegie Endowment for International Peace Rule of Law Series, 34 ( January 2003), p. 8. Available at http://www.ceip.org/ files/pdf/wp34.pdf. 2. P. LeGendre, Restrictions on the Independent Legal Profession in Azerbaijan, Report for the International League for Human Rights (September 1999). Available at http://www.ilhr.org/ilhr/reports/legal/restrict.html. 3. Since the so-called Rose Revolution in Georgia in November 2003, a number of critics have charged that the government has demonstrated some anti-democratic tendencies, especially with respect to freedom of the media and the independence of the judiciary. Despite these charges, it is fair to say that the overall commitment to reform remains at this stage. 4. For more comprehensive studies of the legal profession in all three countries, see ABA/CEELI, Legal Profession Reform Index for Armenia (Washington, DC: American Bar Association, November 2003); ABA/CEELI, Legal Profession Reform Index for Azerbaijan (Washington, DC: American Bar Association, November 2004); and C. P. M. Waters, Counsel in the Caucasus: Professionalization and Law in Georgia (Leiden: Martinus Nijhoff, 2004). 5. See J. Merryman, Civil Law Tradition: an Introduction to the Legal Systems of Western Europe and Latin America (Stanford: Stanford University Press, 1990). 6. It should be noted that in all three countries, non-lawyers may also represent individuals in civil cases by obtaining a power of attorney from a claimant or defendant. 7. Armenia is currently contemplating the manner in which advocates are licensed and organized. The draft Law on Advocates and Advocates Activity would reintroduce a bar examination and would merge the two advocate unions into one body known as the Chamber of Advocates. 8. The Armenian Ministry of Justice started administering the bar examinations for advocates in 1999 but stopped in 2001. Since then, no new advocates have been licensed. See ABA/CEELI, 2003, supra note 4 at p. 17. 9. The Law on Advocates and Advocates Activity, which entered into legal force on 27 January 2000, requires advocates to pass a qualification examination, but the examination has not yet been given. 10. See the 2001 Law of Georgia on Advocates, article 12 (1) and (2), article 40, article 42. Two rounds of bar examinations will have been administered by September 2004 by the Georgian Council of Justice with the assistance of ABA/CEELI. Lawyers who have passed the bar examination by September 2004 will be allowed to participate in the formation of a new mandatory bar association. See Law of Georgia on Advocates, article 42 (1). 11. Ibid., article 11 (8). 12. ABA/CEELI, 2003, supra note 4 at p. 1. 13. Ibid. 14. ABA/CEELI, 2004, supra note 4 at pp. 14–15. 15. See article 73.1 of the Criminal Procedure Code of the Republic of Armenia. 16. ABA/CEELI, 2003, supra note 4 at p. 12. 17. Ibid. at p. 2.

94 The State of Law in the South Caucasus 18. According to Waters, supra note 4 at p. 128, ‘[T]he desire to enter the profession, as expressed in applications to law schools, provides another indication of the relatively high prestige with which the legal profession is held.’ 19. See article 85 of the Constitution of Georgia and article 49 of the Criminal Procedure Code of Georgia. 20. ABA/CEELI, 2004, supra note 4 at p. 15. 21. See Waters, supra note 4 at p. 109. 22. ABA/CEELI, 2004, supra note 4 at p. 15. 23. Armenian Constitution, article 40; Azerbaijani Constitution, article 61 (II); Georgian Criminal Procedure Code, article 59 (n) and article 80. 24. ABA/CEELI, 2003, supra note 4 at p. 29. Also see ABA/CEELI, 2004, supra note 22 at p. 24. 25. In the course of conducting the Legal Profession Reform Index in Azerbaijan, some advocates practising for as many as twenty years reported to ABA/CEELI that they never received compensation for legal aid services rendered. In a recent discussion, the head of the Georgian Collegium of Advocates claimed that the government owed advocates working for that organization approximately US$140 000 in service fees. 26. Armenia has two advocate unions: UARA and the International Union of Advocates. The current Law on Advocates specifically mandates that UARA is to provide legal services for the indigent. 27. ABA/CEELI, 2004, supra note 4 at p. 38. 28. Ibid. at p. 38. 29. ABA/CEELI, 2003, supra note 4 at p. 29. 30. In 2003, the US State Department’s Bureau of Democracy, Human Rights, and Labor concluded that ‘[p]rison conditions [in Armenia] were poor. Holding and detention cells were crowded with multiple prisoners and usually did not contain toilets. Legal minimum food consumption levels for prisoners were rarely realized … The Helsinki Association reported that the prison population remained at a high risk for the development of new tuberculosis infections.’ In Azerbaijan it reported that ‘prison conditions remained harsh and life threatening, and some prisoners died as a result of these conditions’, and in Georgia ‘numerous nongovernmental organizations (NGOs) blamed several deaths in custody on physical abuse, torture, or inhumane and life threatening prison conditions. NGOs reported that police brutality continued. Security forces continued to torture, beat, and otherwise abuse detainees.’ See the US State Department’s 2003 Country Reports on Human Rights Practices for Armenia, Azerbaijan and Georgia. Available at http://www.state.gov/ g/drl/rls/hrrpt/2003/c11093.htm. 31. This is more the case in Armenia and Azerbaijan. After passing the judicial qualification examination in Georgia, anecdotal evidence suggests that appointments are obtained more through personal connections, although there are a few reports of judges buying their positions. 32. ABA/CEELI, 2003, supra note 4 at p. 29. 33. According to the Armenian Ministry of Education, there are forty-six law schools for a population of approximately 3 million. See ABA/CEELI, 2003, supra note 4 at p. 14. The Georgian Young Lawyers Association estimated that in 2002 there were more than 100 schools issuing law degrees in Georgia, a country with a population of approximately 4 million. See ABA/CEELI, ‘Georgian Young Lawyers Association Concept Paper on Legal Education’, Assessment of the Draft Law on Legal Education in Georgia (Washington, DC: ABA/CEELI), p. 1. By comparison, the United States, a

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34. 35.

36. 37.

38.

39.

40.

41.

42. 43. 44. 45. 46. 47.

country of almost 290 million, has 187 law schools that are accredited by the American Bar Association. In Azerbaijan, a country with a population of approximately 8 million, there are eight licensed law schools; however, there are an unknown number of universities that award law degrees without approval from the Ministry of Education. See ABA/CEELI, 2004, supra note 4 at p. 24. ABA/CEELI, What Employers Think about Armenian Law Faculty Graduates, survey report produced by ABA/CEELI-Armenia (2004), p. 3. For more information on the quality of law school education, see ABA/CEELI, 2003, supra note 4 at p. 15; ABA/CEELI, 2004, supra note 4 at p. 25; Chapter 4 of Waters, supra note 4. See Waters, ibid., at pp. 83–4; ABA/CEELI, 2004, ibid., at p. 26; ABA/CEELI, 2003, ibid. at p. 16. The Georgian Young Lawyers Association attempted to kick-start reform in 2002 by producing a concept paper on reforming the legal education system and by drafting attendant legislation; however, advocacy efforts failed to get the legislation adopted. For example, ABA/CEELI has launched a pilot legal education reform project in Azerbaijan that focuses on teaching methodology, curriculum and administrative reform. ABA/CEELI is currently working with two law schools on the project and hopes to expand its activities in the future. See article 8 (1) of the Amended Law on Advocates and Advocates Activity of the Republic of Azerbaijan. Actual implementation of the law is likely to occur in late 2004 or early 2005. The current examination consists of 100 questions randomly drawn from a pool of some 5000 possible questions in front of the examination candidates. Immediately after the examination, the answers to the questions are displayed. If a test taker believes the answer to a particular question is wrong or may have more than one correct answer, he or she can appeal to the Council of Justice to review the question. The appeals process has proven effective in that test takers have successfully challenged some official answers and have thereby received a passing grade if they were just below the threshold. For more information, see ABA/CEELI, 2004, supra note 4 at pp. 36–7. The Lawyers Forum, an unregistered association of lawyers, has drafted a comprehensive code of professional ethics, but it has not been adopted by the Collegium of Advocates. See article 21, Law on Advocates and Advocates Activity of the Republic of Azerbaijan. ABA/CEELI, 2003, supra note 4 at p. 25. Ibid. at pp. 24–5. ABA/CEELI, 2004, supra note 4 at p. 34. ABA/CEELI, 1003, supra note 4 at p. 33. Many observers are beginning to view the Rose Revolution with increasingly guarded optimism based on the government’s tendency to act out of political expediency rather than democratic principles. In the context of the one-year anniversary of the 2003 Rose Revolution, fourteen civil society leaders and representatives from the Georgian expert community wrote an open letter to President Saakashvili, expressing their concerns over perceived limitations of freedom of expression and political opposition and the failure to deliver on key political promises. See ‘Civil Watchdogs Blow Whistle’, Civil Georgia (18 October 2004). Available at http://www.civil.ge/eng/detail.php?id⫽8106.

6 Legal Education in Azerbaijan: Past, Present and Future Challenges Charles Robert Davidson and Nancy Sharp Nti Asare

A primary method for creating and strengthening the rule of law and improving justice is to increase professionalism in the legal community. As the previous chapter suggested, one of the ways this may be achieved is by instituting structural reform of the legal education system. Azerbaijan has experienced a series of sweeping changes in its infrastructure and legislation in the past decade; nonetheless, entrenched attitudes and practices in legal education continue to hinder the development of an effective law-based system. This article looks at the history of legal education, current reform efforts and its future prospects.

Introduction: from law and development to rule of law reform Most well-funded donor-driven legal reform programmes in the developing world include a legal education component. While the specific focus of contemporary programmes may vary from its predecessors, the general notion that education and training of legal professionals play an important role in legal reform and socioeconomic development is not new. Law reform endeavours dating back to the ‘law and development movement’ of the 1960s and 1970s have explicitly contemplated the important role that legal education could play in ‘modernizing’ and rationalizing legal systems in the developing world.1 Central to the law and development movement was the optimistic but empirically untested proposition that law could act as the driving force of change. As a result, legal professionals were thought to occupy a unique vantage-point from which they could engineer societal reform. Adherents of this ‘social engineering through law’ model saw legal education as a critical juncture for instilling zeal for the instrumental use of law as a means of spurring development. This view was reasonably predicated upon legal education’s fundamentally formative role in the acculturation 96

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and professional socialization of future practitioners. By reforming the structure and content of legal education, future generations of lawyers would be intellectually and ideologically equipped to carry out the task of bringing the force of largely American-inspired legal models to dysfunctional local legal systems. Parties on both sides of the transaction seemed to accept the fiction of law’s value-neutrality, which would allow for its easy export and transplantation into foreign soil. Imported legal norms, when properly promoted by well-trained cadres of legal professionals would, it was believed, thrive, ultimately displacing development-hindering laws. It was taken as virtually a matter of course that socioeconomic development would be galvanized by the newly implanted exogenous legal frameworks. Unfortunately, in the missionary zeal to export Western legal models, short shrift was given to conditions on the ground, causing variables such as indigenous cultural norms, social stratification, class cleavages and intergroup politics to be wilfully ignored or seen as merely surmountable obstacles to be overcome by the juggernaut of law-driven progress. When the anticipated reforms failed to materialize, donor organizations and scholars alike abandoned the project, often leaving in their wake greater dysfunction, bastardized legal institutions, and a devalued sense of law’s potential role in promoting socioeconomic development. Donor focus gradually shifted away from law (and legal education) towards a strictly economic approach to development. Although the law and development movement was ultimately declared unsuccessful by its erstwhile proponents with many of its underlying assumptions falling into disrepute,2 it seems the movement – albeit under a different name – has enjoyed a rebirth of sorts, particularly in the tumultuous period following the demise of the Soviet Union. Operating under the broad aegis of democratization, governance and rule of law reform, a multitude of donor organizations – some veterans of the law and development movement and some newcomers – have instituted a new wave of legal reform projects, with a special focus on the former constituent republics of the Soviet Union, Central and Eastern Europe. While America-centric legal paradigms have not permeated the new legal reform projects to the same degree as those in the law and development movement, a review of these programmes reveals that many of them share significant commonalities with their precursors.3 As in previous decades, a wide variety of public4 and private donors are currently involved in promoting law and legal education reforms in the developing world. USAID remains a key donor to a vast array of rule of law programming worldwide, while the European Union and individual European governments have sponsored a growing number of law reform initiatives. Organizations such as the World Bank, the Soros Foundation and the German Technical Cooperation Agency (GTZ), have also weighed in with various law-related reform initiatives. While the range of programming

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sponsored by these organizations is expansive, there is once again a strong programmatic focus on legal education in various formulations – clinical legal training, continuing legal education, judicial training – as a core part of rule of law reform packages. Moreover, the substantive elements of legal education reform closely mirror those proposed at the height of the law and development movement in the 1960s.5 Improving teaching methodologies and updating curricula and teaching materials, along with strengthening institutional support for education reform, remain core objectives of most legal education reform packages. Unlike the law and development movement, however, most contemporary legal education reforms at least implicitly acknowledge the inherent and institutional limitations on the ability of lawyers to implement and administer a programme of sweeping legal reforms. Despite warning signs that today’s democracy promotion and governance programmes are quietly suffering from the same malaises of the law and development movement,6 the importance of reform of legal education cannot be ignored, even if its ultimate quantifiable influence on development remains disputable. Many scholars agree that in most settings, law (when properly crafted and enforced) can play an important role in promoting and sustaining reliability, predictability, accountability and other characteristics thought to foster the market and consequently economic development.7 If this assumption is taken to be valid, then attention must be devoted to the training of legal practitioners who will play integral roles in the creation, implementation and enforcement of these laws. Recent research has demonstrated that rigid, formalistic legal training inappropriate to contemporary realities may actually hinder legal and social efforts at reform.8 This chapter will assess the legal education reform programmes currently underway in the Republic of Azerbaijan, with the aim of providing a snapshot of the progress of reform in the former Soviet republic. Making use of student input, personal classroom experience and documentary resources, this chapter will provide an overview of legal education in Azerbaijan, examining issues of legal curricula, teaching methodologies and clinical education, as well as other topics relevant to contemporary legal education. Before doing so, however, it may be useful to cast a brief glance at legal education in the Soviet Union, for as we shall see, Soviet teaching methodologies and pedagogical philosophies persist well after the dismantling of the USSR.

Legal education in Soviet Azerbaijan Overview of education in Azerbaijan under the Soviet Union After a series of Russian–Iranian (Safavid) wars, Azerbaijan came under Russian control in the nineteenth century, but declared its independence from Russia in the aftermath of the Bolshevik Revolution of 1917. An independent Democratic Republic of Azerbaijan thus came into being in the early twentieth century.9 The fledgling republic proved ephemeral, however, as

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Soviet forces invaded and occupied it in 1920. In 1922, Azerbaijan, along with Armenia and Georgia, was subsumed into the Transcaucasian Federated Soviet Socialist Republic (TSFR); sixteen years later, with the dissolution of the TSFR, Azerbaijan became a republic of the Soviet Union. History provides abundant evidence of the depredations of seventy years of Soviet rule of Azerbaijan, in virtually every area of social activity, including the realm of education. Incrementally suppressing traditional forms of schooling,10 the Soviet leadership substituted its particular form of education, which in many respects amounted to little more than indoctrination in the precepts of the Communist Party. Because of its crucial indoctrination value in creating the ‘new Soviet man’, the government placed enormous emphasis on the broad reach of education: universal education was introduced in Azerbaijan as early as 1928. Local literacy rates, which amounted to only 10 per cent before the Bolshevik Revolution, would grow steadily, reaching nearly 99 per cent in recent statistics.11 Compulsory eight-year primary schooling was instituted in 1959, and in 1966 universal secondary school education was introduced. Importantly, the language of instruction underwent several transformations reflective of larger political realities: the Arabic script of the Azerbaijani language was replaced by a Latin one in 1928, but shortly after Azerbaijan’s incorporation into the Soviet Union, the script was changed to a modified Cyrillic one. Interestingly, Soviet educational reforms were most progressive in the area of language policy, which provided that a student could receive all of his or her education in his or her native language, such that a native speaker of the Azerbaijani language in Georgia ‘could attend school in Azerbaijani, study Russian as a second language, French as a foreign language, and have classes in Georgian’.12 Moreover, unlike its Central Asian counterparts, higher education in Azerbaijan was, for the most part, conducted in the Azerbaijani language, although Russian would remain an important language of instruction.13 If Soviet education contained progressive elements, it was quite conservative in its pedagogical goals and methods, as the discussion below of Soviet legal education reveals. Legal education in the Soviet Union Traditional Marxist doctrine maintained that with the ultimate realization of a classless society, law (and, by extension, legal education) would become superfluous and would eventually disappear altogether.14 Until the realization of the ‘dictatorship of the proletariat’, however, law would be a regrettable but nonetheless important reality in the creation of an egalitarian social order. One might imagine that law, given an ideological prognosis that called for its eventual disappearance, played a peripheral role in the Soviet Union. On the contrary, as Igor Grazin, an Estonian law professor notes, it would be a grave misperception to view the Soviet-style system as inimical to a lawbased state; according to Grazin, ‘almost all Communist states … developed

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into law-governed states to the extreme’.15 Seen as a tool to be wielded in the forging of a communist society, law became a prime method of social ordering and control.16 Education in the law would be no different. The Soviet Constitution mandated a ‘uniform system of education that … serves the communist education and intellectual and physical development of the youth, and trains them for work and social activity’.17 The ultimate goal of Soviet legal education was to create ideologically, if not intellectually, adept servants of the state, who would dutifully apply the law without questioning. Ideological loyalty and purity were prized far more than was intellect or capability. During the Soviet era, there were essentially two principal types of higher education establishments. First, each republic had at least one university with law programmes offered in a five-year course of study culminating in the award of a masters degree equivalent. The universities were supplemented by specialized institutes, which offered four- or five-year programmes leading to the equivalent of a bachelors degree. The study of law was closely controlled with regard to subject matter, teaching materials and faculty research. Legal education was, like nearly all forms of socioeconomic activity, centrally directed from Moscow. Ostensibly coordinating education with national industrial needs, central planners determined ‘both the numbers of students to be trained in over 7,000 specializations and their placement after graduation in positions throughout the USSR’.18 Charged with the funding and oversight of every aspect of the country’s educational system, the Soviet Ministry of Education implemented a uniform, country-wide legal curriculum, which in close keeping with Marxist orthodoxy, focused heavily on politicized, theoretical aspects of law and its role in furthering communist society.19 For instance, every Soviet law faculty contained a department of Theory of State and Law, in addition to the more prosaic departments of Criminal and Civil Law and Procedure.20 Typically, the Soviet legal curriculum included ideological offerings such as Political Economy, Marxist Philosophy (dialectical and historical materialism) and Scientific Communism.21 Teaching methodologies, which largely consisted of a recitation by the professor of his or her notes, were passive, rigid and unidirectional. Professors were simply responsible for imparting information to students, without concern for the synthesis or integration of this information into a meaningful whole. In this pedagogical paradigm of passive information transfer, little or no emphasis was placed upon applied knowledge: the primary responsibility of the Soviet law student was to ingest and memorize copious amounts of information, and to faithfully repeat it, undigested and unaltered, in an oral examination.22 Skills typically associated with legal education, such as critical analysis, problem solving and analogizing were discounted, as these skills were unnecessary and undesirable in students being trained to be administrators not problem-solvers or advocates.23

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The highly politicized nature of law in the Soviet Union gravely undermined the social prestige of legal professionals who were seen as mere technical agents of the party. Tainted in the public eye because of the ideology-bound and inherently political nature of their work, and occasionally viewed with some suspicion by politicians,24 legal professionals were generally poorly regarded. As a result of this political taint, ‘young people with a sense of moral responsibility and self-respect avoided the study of law’, entering less ideologically driven fields like engineering, music, physics, and medicine.25

Legal education in post-Soviet Azerbaijan The economics of higher education in contemporary Azerbaijan Immediately upon gaining independence, it became self-evident that broad systemic reforms would need to be made in the educational systems of the former republics. Marxist-Leninist ideological instruction would have to give way to a curriculum that would reflect local history and values, while preparing students to emerge into an increasingly competitive world marketplace. Translating widespread (but by no means universal) support for this goal into practice has proved extremely difficult in all of the former Soviet republics, and Azerbaijan has proved no exception. The Soviet educational legacy to Azerbaijan is at best a chequered one. While access to education was greatly enhanced and general levels of education improved, the primary focus of Soviet education was never the intellectual development of students, but rather a state-centred, information-transfer objective that did not seek to maximize student capabilities. Citizens were nominally well-educated, that is, they had received copious amounts of information about a given subject, but lacked training in the critical analysis and synthesis of this body of information. Soviet-era learning would quickly reveal itself unsuited to the demands of an independent, market-oriented state. Despite its shortcomings, Azerbaijan inherited a well-developed, much-used educational system, as evidenced by the country’s comparatively high levels of educational attainment with regard to its neighbours.26 Economic hardships following independence, however, have had a devastating impact on the country’s educational infrastructure. Between 1990 and 1995, the country’s gross output fell by over half (58 per cent) and real wages declined by more than 80 per cent.27 Although economic conditions began to improve from 1996, real wages in 2003 remained fully 64 per cent lower than in 1990.28 Such weak macro- and micro-economic performance directly contributes to the difficulties of the education system in Azerbaijan. Education at all levels in Azerbaijan suffers from the precipitous decline in educational spending as part of GDP: between 1992 and 1995, the education budget as share of GDP decreased by half (from approximately 7 per cent to 3.5 per cent), and in 1995, government spending on education was still only 27 per cent of 1992 levels.29 More recently, education accounted for 4.8 per cent

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of GDP; for purposes of comparison, this figure is approximately 2.7 per cent for low income countries, and 3.8 per cent for middle income countries.30 In constant prices, however, public spending on education still remains just a third of earlier expenditures, causing the entire educational sector to be underfunded. The consequences of education’s financial crisis are far-reaching, affecting the quality of instruction provided to students of all educational levels. At the same time, the numbers of students available to pursue higher education are dwindling. This reflects a concerning decline in education at all levels in Azerbaijan: in 1990, 68.5 per cent of population aged between 6 and 32 was enrolled in an academic programme but by 1999, that figure was 61.3 per cent.31 In 1991, higher education enrolment totalled 105 000; today enrolment has declined slightly to 101 676.32 Contemporary legal education in Azerbaijan Even at its height, the Soviet Union did not produce a large number of law graduates: prestige was lacking, instruction stultifying, ideology crushing, corruption and bribery for limited places ran rampant, and chances of professional advancement were small. Despite a decrease in overall numbers of students in its educational system, one of the first major shifts in legal education in independent Azerbaijan was a rapid increase in the number of students choosing to study law. This increase stands in stark contrast to the actual decrease of the total number of students enrolled in higher education. At the country’s largest institution of higher learning, law has become the single most popular field for students, with 39 per cent of all students opting to study law.33 According to Ministry of Education figures, there are currently 2594 bachelor students in law, 566 masters students, and 54 doctoral candidates.34 This upsurge in interest in the study of law, which closely replicates a tendency throughout the South Caucasus,35 reflects several intersecting factors. The changing public perception of law in Azerbaijan has greatly fuelled student interest in the study of law. Law is increasingly coming to be seen as a means of securing and defending individual and collective rights; in an informal ABA-CEELI survey of law students, a majority of students indicated that they chose to study law to ‘protect the rights of others’, ‘remove the injustice and corruption in our state’ or to prevent violation of one’s own rights.36 Law’s popularity is such that there is a growing concern among law faculty and administrators about attracting serious students, who have more than a passing commitment to the law. Some observers have noted this shift to law (and economics) with concern since, as was previously noted, there has been a concomitant decrease in numbers and competence of those studying other important subjects for Azerbaijan such as engineering and agriculture.37 Moreover, the shift to a privatized, market economy has created a demand for legal specialists in areas that fell outside the purview of a Soviet legal

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education. Courses in business-related topics, ranging from intellectual property and banking to contracts and property, continue to count among the most popular with law students. Law’s new-found popularity after 1991 naturally strained the increasingly limited resources of the state universities, which was only partially alleviated by the emergence of a spate of new private institutions offering legal training. Emerging in nearly all of the former Soviet republics, private establishments have proliferated at exponential rates. By 1996, there were more than 100 private post-secondary institutions operating in Azerbaijan,38 although many of them failed to achieve legal status and folded in the ensuing years. Today, approximately thirteen accredited private institutions operate alongside twenty-three state-run institutions. Of these thirteen, four private universities offer law degrees (compared to three public institutions).39 Despite persistent concerns about quality of education provided in some of the private universities, it is widely agreed that they have played a key role in energizing the education sector as they ‘managed to efficiently shoulder the demand for education from a growing number of students … [and] rekindle[ed] competition for potential students amongst private and state universities’.40 Statistics underscore the popularity of these private institutions: according to 2002 United Nations Development Programme (Azerbaijan) figures, enrolment in state-run universities and institutes grew by a respectable 5.4 per cent; enrolment at private institutions during this same period grew by an astounding 43 per cent.41 Furthermore, in 1999, more than half of the students at private institutions were studying law, while more than a quarter pursued degrees in economics.42 The popularity of legal education at these burgeoning private institutions underscores some of the pervasive problems besetting legal education in Azerbaijan today. To understand why so many students opt to undertake legal studies at private institutions necessitates an examination of the state of legal education at the public institutions, although, to be fair, many of the same ills (and some peculiar to private establishments) blight legal education in all sectors of Azerbaijan’s institutions. As a threshold matter, legal education in Azerbaijan today generally retains considerable continuity with its pre-independence, Soviet-era predecessor. Although legal education is now available in both public and private establishments, and there have been some curricular modifications, much remains fundamentally the same. While institutions are granted certain autonomy by Azerbaijan’s law on education, legal education remains closely controlled by the Ministry of Public Education, which, like its Soviet-era counterpart, is charged with the oversight of virtually every aspect of education. According to the Law on Education – the legal basis of Azerbaijan’s educational system – the Ministry, among other monumental tasks, develops state education policy and guarantees its implementation, supervises the implementation of Law on Education. Further the Ministry

104 The State of Law in the South Caucasus

designs appropriate documentation concerning activities of educational institutions as well as the curricula, basic syllabi, and ordering of textbooks. In addition to determining rates of funding for educational institutions, the Ministry abolishes, reorganizes and establishes new educational institutions together with implementing licensing and registration of educational institutions.43 Legal education in Azerbaijan continues to be an undergraduate programme, as it is in much of the world. Students who complete a four-year (as opposed to the five-year Soviet programme) degree course in law receive a baklaver or Bachelor’s degree in law. An additional year or occasionally two of graduate legal studies earns one a magister or Master’s degree in law; in some (mostly private) establishments, this degree is known as an LLM. Some faculties (usually state-run) offer a doctorate in law that can be pursued upon completion of a Master’s programme in law. A hold-over from the Soviet era, currently under discussion by the Ministry of Education, is the kandidat degree. This degree was offered in the Soviet programme after completion of the five-year undergraduate degree and prior to doctoral studies. The new law of education does not address the kandidat degree and it has not been decided where this degree fits in to the new paradigm. Since 1992, undergraduate admission procedures in Azerbaijan have been determined by the Azerbaijan State Students Admission Commission (SSAC), which reports directly to the President of Azerbaijan. Each year, SSAC administers a nationwide examination to all secondary school students desiring to continue their education. Students take exams tailored to their chosen field: those contemplating law studies will take an examination targeted towards related subjects. The SSAC further establishes minimum entrance scores for each university, as well as the number of places available for each law school. The number of places is not fixed and may vary from year to year.44 The SSAC has established a very high score on the examination as a prerequisite to admittance to a law faculty. Students obtaining the highest scores on this exam are ensured places at the universities of their choice, while those obtaining average or poor marks must attend such schools that will accept their score. While education during the Soviet era was free, today both private and public institutions charge some form of tuition. The amount of tuition at state law faculties is often correlated to one’s performance in the national examination. Students achieving top scores are guaranteed spots and are exempt from payment of tuition fees, while lower-scoring students are required to pay their own tuition fees. In practice, the lower the score received on the national exam, the greater the amount of tuition that must be paid. Prospective law students with top exam results may thus be guaranteed a tuition-free place at Baku State University’s Law Faculty, widely considered the nation’s pre-eminent faculty of law.45 Students with lower scores are not barred from law study at Baku State, but must pay tuition to enrol.

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As a result, law classes at Baku State Law Faculty are an eclectic mix of the highest-scoring students from around the country and lower-scoring students with the ability to pay the tuition fees.46 Students and educators alike have criticized this system that does not differentiate among the country’s brightest students and its lowest performers. Moreover, because of the introduction of a two-tiered paying structure, a fresh round of criticism has erupted, causing charges of corruption to be frequently levelled against educators, administrators and students. The issue of corruption in higher education remains at the fore of discussions of legal education reform in Azerbaijan, as it does in Armenia and Georgia, particularly as places in law faculties are increasingly becoming the most sought after places in higher education.47 A recent article in the independent press suggested that bribes for admission to Baku State University’s law faculty can amount to an astonishing US$30 000.48 The problem of corruption, which debilitates higher education throughout the developing world,49 has become serious enough during Azerbaijan’s transition phase to warrant significant concern. Official teacher salaries remain extremely low, averaging between US$20 and 50 per month,50 well below the amount needed for subsistence.51 Instructors’ salaries at private universities (and foreign-funded programmes in state institutions) can range from US$100–200 per month. Secondary and university teachers – particularly in foreign languages – routinely take on outside students to supplement their incomes: many law professors take on second jobs to supplement their salaries, causing them to teach below capacity, and depriving them of time that could be used towards scholarship and planning. Moreover, students speak openly of the existence of professors who demand payment for passing grades, regardless of one’s actual performance.52 Students complain about the need to pay bribes for admission to graduate programmes (which are not subsumed under the SSAC’s mandate) and grades. At the same time, because of the enormous financial outlay by families for education and the cost of retaking courses, there is significant pressure on students to seek out compliant professors who will give a passing grade in exchange for money. The increasing pressure to achieve perfect grades and to have a prestigious law degree also fuel the cycle of corruption. Among students, the pervasive notion that the diploma is more important than the knowledge it represents encourages the more well-to-do and less ambitious to approach amenable faculty and administrators. Moreover, where the choice is fulfilling military service in a remote region or paying a bribe to enrol in school, many families choose the latter. The prevalence of corruption in state institutions – perceived or actual – has been central to many students’ decision to attend private schools where corruption is thought to be less common. The fact remains, however, that the vast majority of students lack the wherewithal to attend private schools and are enrolled in public educational institutions (Baku State and the State Oil Academy have combined

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enrolments of between 40 000 and 50 000 depending on sources) and are thus often faced with the spectre of institutionalized corruption. Law school curricula While students at private universities may have greater flexibility in supplementing their course of study with elective offerings, both public and private students have a fairly rigid academic programme, with little room for specialization or personal interest. Many law faculties, both public and private, offer courses in a variety of departments, the largest of which are Theory of State and Law (Theory of State and Law courses are a staple of the curricula throughout the South Caucasus in both public and many private establishments), Criminal Law and Procedure, and Civil Law and Procedure. Some schools have separate international law departments within the faculty, while at other institutions it falls within the competence of either the public or private law department. Although the Law on Education speaks of ‘expanding the independence of educational institutions’,53 central control over the broad legal curricular framework robs law teachers of the flexibility to modify the content or direction of required courses, and deprives students of innovative course offerings. While all law schools today offer some courses that are designed to reflect the needs of the market economy, there is a dearth of course offerings truly relevant to Azerbaijan’s unique position in world affairs. Students, no doubt, are enthusiastic about business law and international business transactions, but there is far less interest (and fewer course offerings) in areas like constitutional, environmental and human rights law. It is often argued that the bulk of students will likely end up practising in the area of business law, and that academic specialization is useful preparation for future practice. Unfortunately, this argument fails to contemplate what may be the most serious curricular weakness of legal education in Azerbaijan. To the authors’ knowledge, no law faculty in the country teaches courses in basic lawyering skills as part of its core legal curriculum. No courses are offered in legal research and writing or oral advocacy. There are very limited course offerings in legal and professional ethics (which are most often taught by visiting foreign faculty), negotiation and dispute resolution. Students may be specializing but they lack basic skills needed by all lawyers, regardless of the nature of their day-to-day work. Lawyering skills as a core part of legal curriculum take on even greater importance in light of the very limited continuing legal education (CLE) programming available to practising professionals. Fortunately, clinical law programmes are increasingly taking hold in private and public universities, giving law students an opportunity to acquire and hone their lawyering skills before leaving the university. Currently, Baku State University, Khazar University and Azerbaijan University have functioning legal clinics.54 Additional clinical legal education programmes are being sponsored across the country by a variety of organizations; increasing

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numbers of students are taking advantage of these opportunities, which allow them to gain a valuable, practical skills set, while allowing the indigent and needy access to legal aid. It has also been suggested that clinical education can help promote democratic transition, ‘by empowering law students, law faculty, and their clients to advocate for legal reform and to promote greater access to justice’.55 Law teaching methodologies Current methodologies for teaching law retain significant similarities with Soviet teaching methods. Given that many law teachers were educated in the Soviet system and have had little exposure to alternative methodologies, the prevalence of Soviet-style teaching is hardly surprising. Moreover, although there is much discussion in academic quarters of the need for ‘new’ teaching methodologies, there is little widespread knowledge of what these methodologies are and how they can be brought to the classroom. While concepts such as ‘interactive teaching methods’, ‘student-centred education’ and ‘independent and critical thinking skills’ have become the mantra of many educators and reform-promoting organizations, there is no clear consensus on the meaning of these phrases or even their relevance to legal education in Azerbaijan. Many professors with whom the authors have talked recognize the need for improved training of law students, yet are unsure how to go about making these improvements. The task of institutionalizing improved law teaching methods is complicated by the fact that it is often left to younger faculty members who have studied abroad, but who tend to lack the academic experience and institutional clout to make penetrating and lasting reforms in methodology. In both private and public establishments, law students today continue to be instructed in the theoretical aspects of law to the virtual exclusion of practical aspects. Teaching methods are generally conservative, focusing on rote memorization of lectures delivered by professors. Student grades are typically based on one evaluative exercise at the end of the semester, which requires the faithful repetition of the lectures. Examinations are not created to test the application or synthesis of information but are designed solely to assess information recall. Oral examinations, once the norm, are increasingly being phased out (not without much dissension from their proponents), although they continue to be used in some, primarily state, establishments. Where examinations are written, law students are often provided with a list of potential questions from which the examination questions will be drawn, verbatim. Students are wholly unfamiliar with fact patterns and case-based examinations in which they are required to apply the law to facts; initial results from the authors’ international law classes reveal, however, that students actually enjoy this type of exam and find it far more challenging than typical exams on ‘theoretical-scientific’ aspects of law. Few classes are truly interactive, with student participation being a focal aspect of the learning environment. This can hardly be surprising given the

108 The State of Law in the South Caucasus

fact that even today, there is a preponderance of Soviet-educated law teachers, some of whom display a marked reluctance to modify their teaching styles, despite indicators that students are poorly prepared to practise law. Teaching methodology reform programmes, particularly in state universities, are greatly hindered by professorial intransigence and hostility to outside interference. One analyst has described the attitude of many professors with regard to proposed methodological and substantive reforms: ‘[Professors] do not know what it is they do not know. And they are proud. The idea of importing foreigners … to teach disciplines they cannot teach nearly as well, if at all, on their own is frankly too much.’56 While a certain degree of wariness of outside assistance is clearly warranted, and a careful assessment should be made regarding the comparative merits of the present system, wholesale rejection of external advice is counterproductive, especially in light of the important societal transformations occurring in Azerbaijan today. The projected increase in developmental revenue from the ‘Contract of the Century’ (signed on 20 September 1994 by the government of Azerbaijan and a consortium of foreign oil companies to exploit Azerbaijan’s oil and gas reserves, variously estimated at 30–50 million tons) will obviously demand local attorneys who are able to think critically and independently, problem-solve and negotiate. Failure to create lawyers with these skills will ensure that the country’s economic and, by extension, political fate remains largely in the hands of foreign lawyers and consultants. Other social problems such as advancing and protecting civil rights, environmental protection, and the rule of law for all citizens will equally require creative, analytical and independent-minded legal professionals to formulate innovative solutions to these challenges. Law teaching resources Compounding the problem of teaching methodologies that are unsuited to producing lawyers equal to the tasks before them is the limited availability of legal teaching materials. In fact, the lack of teaching materials heavily reinforces outdated teaching methodologies, as professors themselves have little other than their own notes to rely upon. Accessible legal teaching materials are in short supply, prohibitively expensive or simply non-existent. Partly as a result of the shift from Cyrillic to Latin script in the 1990s, a shortage of local language legal materials has ensued. While Soviet-era Russian language texts do exist, they are outdated and inaccessible to Azerionly speakers. Russian-speaking students often use these texts as references for want of more current material. Furthermore, law libraries have extensive Russian language collections, but because of the condition of facilities and the outdated nature of the books, libraries often operate more as storage facilities than places of learning. Reference materials are limited and few libraries can afford to subscribe to international journals. Complete new Criminal Law and Procedure, as well as Civil Law and Procedure codes were

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adopted in 2000, yet four years later, no texts or teaching materials have been devised to teach students these new codes. Information technology (IT) remains weakly integrated into educational programmes at all levels. Although there are a variety of donor-assisted IT programmes, computers remain uncommon in the classroom and libraries. Students and faculty alike lack the basic tools needed for independent research and curricular support. Underfunding greatly impacts the physical environment of legal education. With the exception of some of the private universities, and a few state institutions, the majority of educational facilities in Azerbaijan were built to Soviet (or even pre-Soviet) standards of education, which tend to be ‘rigid and inefficient compared to generally recognized/international norms for education facilities’, and ‘[s]ome schools fail to meet even the prescribed Azerbaijani norms’.57 Conditions even at the premier law faculties around the country, while not extraordinarily substandard, still detract from the overall learning experience. University classrooms are often cold in the winter and unbearably hot in the summer. Overcrowding and poor facility design affect both teaching staff and students. Faculty members often lack office space, which hinders opportunities for individualized attention and the development of faculty–student interaction outside of the classroom. Overcrowding in university classrooms presents both learning and behavioural challenges – students routinely lack desk space, sitting four and five at hard wooden benches designed for three and four – promoting inappropriate classroom behaviour and academic dishonesty. The government of Azerbaijan, UNDP, GTZ and others are investing considerable amounts in trying to improve the physical setting of education, though much of their efforts are focused on primary and secondary institutions.

Conclusion Despite remarkable changes in nearly every sphere of social activity in the past decade, the Soviet legacy has been nothing if not enduring in the field of legal education. Whereas Soviet legal education placed enormous emphasis on training law students to work mainly in the administrative service of the state – as reflected in the curriculum – this training is unsuited to today’s law students who desire to practise law after graduation. One must be mindful of overstating the need for legal education to be precisely tailored to practice. It must be acknowledged that the role of legal education in creating legal professionals is a source of continual academic debate in many jurisdictions, and lawyers perform a wide variety of legal and non-legal tasks. However, the skill set acquired in a law faculty should provide a basic set of analytical tools appropriate to a wide array of professional endeavours. Emphasis on rote memorization and recall, theory and ideology does not equip students – irrespective of their intended professional sphere – to handle the challenges faced by a society going through the often agonizing transition from a

110 The State of Law in the South Caucasus

centralized to a market economy. To thrive in the globalized market economy that Azerbaijan is poised to enter – particularly as it becomes an important exporter of oil and natural gas – future legal practitioners will need practical lawyering skills, such as advocacy, negotiation and ethics training. Failure to incorporate these skills into legal education – and to make them available as part of a continuing legal education programme – will allow outside lawyers, experts and consultants to play an inordinately dominant role in the public and economic direction of Azerbaijan.

Notes 1. The law and development movement can be traced back to the 1960s, when a unique blend of optimism, a deep belief in social change, Cold War politics and other factors coalesced to create a loose movement of legal scholars and aid workers committed to promoting legal and judicial reform in the developing world. On the rise and demise of the movement, see J. H. Merryman, ‘Comparative Law and Social Change: On the Origins, Style, Decline and Revival of the Law and Development Movement’, American Journal of Comparative Law, 25 (1977), p. 457. 2. Some scholars challenge the prevalent notion that the movement was a failure. In an excellent law review article, Maxwell Chibundu speaks of the movement’s revival. See M. O. Chibundu, ‘Law in Development: On Tapping, Gourding, and Serving Palm Wine’, Case Western Law Journal of International Law, 29 (1997), p. 167. 3. This point is well made in Julio Faundez’s introductory chapter in Good Governance and Law: Legal and Institutional Reform in Developing Countries (New York: St. Martin’s Press, 1997). Notwithstanding the similarities between the law and development movement and the current ‘governance’ trend, Faundez finds that the crucial distinction between the two is to be found in the differing conceptions of the state’s role in promoting development. For law and development adherents, the state was seen as the primary locus of reformist activity (as would be expected perhaps in the 1960s). By contrast, current rule of law and governance programming sees the state as important, but more peripheral to the reform process. The state’s role should be circumscribed, limited only to promoting those forces and institutions that support ‘the market process’. 4. In 1999, it was estimated that within the US government alone, some twenty-six agencies were administering law-related reform projects within the Russian Federation. See S. Holmes, ‘Can Foreign Aid Promote the Rule of Law?’, East European Constitutional Review, 8 (1999), p. 71. Holmes notes that the multiplicity of programmes – irrespective of donor – gives them ‘a miscellaneous quality’ and causes them to ‘overlap with each other, creating redundancies’. 5. See for example, J. H. Merryman, ‘Law and Development Memoirs I: the Chile Law Program’, American Journal of Comparative Law, 48 (2000), p. 481. 6. See for example, T. Carothers, Aiding Democracy Abroad: the Learning Curve (Washington, DC: Carnegie Endowment for International Peace, 1999), pp. 98–113. With specific reference to American democracy promotion efforts, Carothers makes many of the same critiques that were made of the earlier law and development movement. For instance, he suggests that democracy promotion endeavours are far too culturally bound to American models (whose exportability and ultimate desirability have largely escaped rigorous scrutiny) and that there is an

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7.

8.

9.

10.

11. 12.

13.

14.

15.

16. 17.

inordinate ‘pseudoscientific’ formalistic focus on political change that ignores the substantive aspects of change. See for instance, J. M. Picker and S. Picker, Jr., ‘Educating Russia’s Future Lawyers … Any Role for the United States?’, Vanderbilt Journal of Transnational Law, 33 (2000), p. 19: ‘A well-developed legal system based on the rule of law underlies and supports every post-modern, sophisticated, fully developed state in the world.’ Whether law is the sine qua non of this development and sophistication, however, remains to be empirically demonstrated. For an excellent critique of the articles of faith of the law reform movement, see F. Upham, Mythmaking in the Rule of Law Orthodoxy, Working Paper 30 (Washington, DC: Carnegie Endowment for International Peace, 2002). See J. A. Couso, Book Review of Lawrence M. Friedman and Rogelio PerezPerdomo, eds, Legal Culture in the Age of Globalization: Latin America and Latin Europe (Palo Alto: Stanford University Press, 2003), in Law and Politics Book Review, 14 (2004). On this point, see A. Alstadt’s ‘Azerbaijan’s First and Second Republics: the Problem of National Consciousness’. Available at http://ourworld. compuserve.com/homepages/usazerb/345.htm. In the initial period of Russian control, from 1828–1918, educational policy was jointly crafted by Azerbaijani intellectuals and Russian educators; the result was a system comprising three types of schools. In this hybrid system, there were ‘religious schools, with introductory courses in secular subjects; secular [schools] but with compulsory religious subjects; [and] Russian-Tatar schools, secular and bilingual [that] contributed to the rise of the modern Azerbaijani intelligentsia’. See H. Isaxanli, ‘Current Trends in Education in Azerbaijan’, Belfer Center for Science and International Affairs, Harvard University (April 2001), event summary by E. Van Buskirk. Available at http://www.ciao.net. World Education Forum, The EFA 2000 Assessment: Country Reports, Azerbaijan (UNESCO). Supra note 10. However, it must also be noted that by the 1950s the Soviets were aggressively promoting Russian language schools for the local populations, in a bid to Russify the republics. According to Isaxanli, ibid., ‘for every 100 students majoring in Mathematics and studying in Azerbaijani, there would be a group of 25 or 50 math students studying in Russian’. It was widely believed by Soviet leaders of the 1930s that law could be eliminated and replaced by central planning. By 1936, however, there was growing recognition that a law-less society was an unattainable goal. The period preceding this revelation witnessed a significant decline in law schools, a trend that began to reverse itself in the late 1930s. See Picker and Picker, supra note 7. I. Grazin, ‘On Essential Traits of Post-Communist Revolution in Legal Education’, available at http://www.aals.org. According to Grazin, the challenge of the post-Soviet state is not to ‘move towards a law-governed state but away from it!’ See also J. Burman, ‘The Role of Clinical Legal Education in Developing the Rule of Law in Russia’, Wyoming Law Review, 2 (2002), pp. 89, 97. Burman notes that law as a tool of social control and repression has extensive historical (i.e. pre-Soviet) antecedents in Russian history. See C. Osakwe, Book Review of W. Butler, Soviet Law (London: Butterworth, 1983) in Tulane Law Review, 59 (1985), p. 858. Burman, supra note 15 at pp. 101–2, citing Preamble of the Constitution of the Soviet Socialist Republics (1977).

112 The State of Law in the South Caucasus 18. J. L. Bess, ‘The Dilemmas of Change: Higher Education in Belarus’, International Higher Education (Winter 2000). Available at http://www.bc.edu/bc_org/avp/ soe/cihe/newsletter/News02/textcy2.html. Because of time lags in the system, educational central planning created, according to Bess, ‘egregious under- and overproduction’ of specialists, though it did provide for a certain employment security and a well-educated workforce. 19. Burman, supra note 15 at p. 102. 20. C. Turturica, ‘Law School Accreditation in the New Independent States of the Former Soviet Union: What Steps for the Future?’, Central European and Eurasian Law Initiative (CEELI), Discussion Paper Series (6 November 2003), p. 3. 21. Burman, supra note 15 at p. 102. 22. Burman, ibid., notes that students ‘were simply vessels into which the teacher poured prescribed, ideologically correct lectures’. 23. According to Grazin, supra note 15, the system did not require ‘lawyers per se, but rather ideologically loyal, creative and tough administrators-managers ready to follow the Party instructions and able, only if needed, to provide the legalistic cover to actually purely administrative (i.e. non-legal) decisions’. 24. See for instance, P. Krug’s review of P. H. Solomon’s Soviet Criminal Justice under Stalin (Cambridge: Cambridge University Press, 1996) in Law and History Review, 18 (2000), p. 673. In the 1930s, Soviet leaders sought to create a more professionalized core of legal officials by requiring greater professional development – previous reliance on untrained, poorly educated administrators had yielded poor results – and by explicitly linking their career advancement to quantifiable indices of performance. 25. M. B. Zimmer, ‘Judicial and Legal Systems in the Republic of Azerbaijan: a Preliminary Analysis’ (2002), p. 7, unpublished report prepared for the American Bar Association. 26. Azerbaijan fared well with regard to the other former Soviet republics in terms of educational attainment. According to 1989 Soviet statistics, 12.5 per cent of Azerbaijan’s population (age 15 and older) had received some form of higher education. Only Russia (13 per cent), Estonia (13.5 per cent), Latvia (13.8 per cent), Armenia (16.1 per cent) and Georgia (17.5 per cent) had higher levels of higher educational attainment in the Soviet Union. See World Bank Country Studies, Moldova (Washington, DC: 1999), p. 50. 27. United Nations Development Program (UNDP), Azerbaijan Human Development Report (2000), p. 14. This report, as well as all other UNDP–Azerbaijan Human Development Reports, is available at http://www.un-az.org/undp/HDR2000_en.pdf. 28. Ibid. 29. See World Bank, Project Information Document No. PID11492, Azerbaijan–Education Sector Development Project (Washington, DC: World Bank Group, 2003), p. 1. 30. Ibid. 31. Supra note 27 at p. 19. 32. Ministry of Education of the Republic of Azerbaijan website, http://www.min.edu.az. 33. Supra note 27 at p. 20. 34. Ministry of Education official statistics, released June 2004. 35. See for instance, C. P. M. Waters, Counsel in the Caucasus: Professionalization and Law in Georgia (Leiden: Martinus Nijhoff, 2004), p. 75. 36. ABA-CEELI, Core Curriculum Reform Programme, Student Questionnaire, Khazar University (May 2004). Results on file with authors. 37. UNDP, Azerbaijan National Human Development Report (2003), Chapter 1. 38. J. S. Catterall and R. McGhee, Jr., The Emergence of Private Postsecondary Education in the Former Soviet Republic of Azerbaijan, Newsletter on International Higher

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39.

40. 41. 42. 43. 44.

45.

46.

47. 48.

49. 50.

51.

52. 53.

Education, Center for International Higher Education, Boston College (1996). Available at http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/News05/text2.html. There are approximately twenty-three state higher educational institutions. Ministry of Education Official Statistics, released June 2004. The four universities are Azerbaijan University, Azerbaijan International University, Odlar Yurdu University and Tafakkur University. There is a fifth private university, Khazar, which also offers law degrees, but is not cited by the Ministry because of its unique admissions procedure. The three public universities are Baku State, Nakchivan and the State Academy of Public Administration. Supra note 20. UNDP, Azerbaijan Human Development Report (2003), chapter 1, section 1.2. UNDP, Azerbaijan Human Development Report (1999), p. 43. Law of the Republic of Azerbaijan On Education (enacted 7 October 1992), article 31. The number of university places set by SSAC for 2002–3 was 27 577 divided between twenty-five state universities (24 458) and twelve private universities (3119). There were 51 069 applicants for these spaces. See ‘Heidar Aliyev Dissatisfied with the Level of Education’, Baku Today (9 September 2002). As in Georgia and Armenia, while some private establishments have made national and regional names for themselves (such as Khazar and Western Universities in Baku and the American University of Armenia in Yerevan), positioning themselves at the forefront of legal education reform, it is remarkable that in all three countries, the law faculty at the main state university (Baku, Tbilisi and Yerevan) tends to retain the greatest appeal and prestige among potential candidates and future employers. See World Bank, Project Information Document (March 2003), p. 2. Available at http://web.worldbank.org/external/projects. A World Bank analysis of higher education provides some insight into the level of preparation of students beginning undergraduate studies. According to the World Bank report, only 800 of the nearly 80 000 candidates who recently took the annual Student University Entrance Examinations scored the maximum 700 points, while more than half of all test takers scored below the failing mark (300 points) and another third were unable to achieve a score of 100 points. Since the pool of candidates for law study is quite small based on examination scores, there is concern that students buy admission to law programmes. On the situation in Georgia, see supra note 35 at pp. 74–6. Turan News Agency, citing Azadliq newspaper (7 July 2004). See also ‘Con Woman Taking Bribes from Students Sentenced to 10 Years’, Baku Today.net (23 June 2003). According to this article, Hagigate Nuriyeva swindled nearly US$70 000 from students, including US$15 000 from a student who sought a transfer to Baku State’s law faculty. See Transparency International’s web portal (CORIS) at http://www.corisweb.org/ for documentation on corruption in the education sector worldwide. US Embassy Baku, Azerbaijan, Public Affairs Section, Tertiary Education Overview, available online at http://www.usembassybaku.org/usis/culture/teduc.htm. Law instructors’ salaries tend to be higher in Baku, ranging between US$40 and 70 per month. In June 2004, President Ilham Aliyev raised the monthly minimum wage from 60 000 to 100 000 manats, US$12–20.25, effective as of 1 July, as reported in Azerbaijan Daily News Digest, available at http://www.eurasia.net.org. Discussions with students at Baku State and Khazar Universities, 2003–4. Law on Education, supra note 43, article 2.

114 The State of Law in the South Caucasus 54. As do several universities in Georgia and Armenia, with a particularly active clinic at Yerevan State University. 55. See ABA-CEELI Proposal to US Agency for International Development (2003), p. 2 (on file with authors). For a more complete treatment of the role of clinical education in fostering a ‘culture of law’, see Burman, supra note 15 at pp. 106–17. 56. T. Klumas, ‘Legal Education in the New Europe and the USA: Shall the Twain Ever Meet?’, The German Law Journal, 5 (2004), p. 2. Regarding the challenges posed by traditional faculty, it has been stated that ‘[a]gainst expectations, the old, unqualified, and xenophobic professors did not die out. They reproduced themselves through inbreeding, selecting future teachers from among their students according to criteria of loyalty and lack of intellectual challenge to the current incompetent professorate.’ See A. Tucker, ‘Reproducing Incompetence: the Constitution of Czech Higher Education’, East European Constitutional Review, 9 (2000), p. 94. 57. UNDP, Project Information Document (1998). Approximately 72 per cent of all school buildings in Azerbaijan were not originally intended for educational use and nearly half of all buildings are in need of ‘substantial renovation’. Moreover, according to UNDP, there is considerable reluctance to modernize established construction norms: all building plans require the approval of the State Construction and Architectural Commission (SCAC). Apparently, the building norms can only be modified with presidential approval or decree. In February 2003, the President allocated 34 billion manat for the construction of new schools, rehabilitation of existing buildings, and the addition of new classrooms to old buildings.

Part III Regulation

The regulatory reach of any modern state is pervasive and, while many citizens will never experience the inside of courtrooms, avoiding regulation is impossible. In Chapter 7, Marina Guledani looks at the regulatory framework for business in Georgia, with a focus on tax, company and security laws. She suggests that while the rudiments of modern business legislation are in place – albeit with flaws – implementation of the law will be key to improving the business environment in Georgia following the Rose Revolution. Karen Andreasyan in Chapter 8 then turns to the regulation of the telecommunications sector in Armenia, Azerbaijan and Georgia. He looks at the process of privatization and liberalization and compares the three countries’ experiences. He suggests that the public interest will not be served unless regulators who are at arm’s length from government have authority over the implementation of privatization and liberalization policies. In Chapter 9, Allison Morrill Chatrchyan and Amanda Wooden consider environmental regulation by focusing on the protection of water and forest resources in Armenia and Georgia. They conclude that without greater democratic consolidation and improvements in the rule of law – courts have to date played a negligible role in environmental protection – progress towards sustainable development will be hampered.

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7 The Legal Basis for Business in Georgia Marina Guledani

Introduction A healthy business environment is central to the creation of wealth in emerging markets such as those of the South Caucasus. The business environment includes a range of factors associated with the functioning of the state that influence the profitability and predictability of economic activity – from tax systems to regulatory hurdles, official corruption, responses to organized crime and the enforcement of business contracts and property rights. Apart from the content of legislation which must be adapted to a market economy, the rule of law is itself a primary determinant of the business environment. This chapter will consider the development of the legal environment for business in Georgia through the prism of the rule of law. The introduction of market principles in Georgia has proven a difficult aspect of the transition experience, not only on paper, but also in state structures and even the mentality or culture of its citizens. Attitudes and views on business are carried from generation to generation through family values and patterns of behaviour. Having lived under the system of a planned economy, familiarity with regulated market capitalism never evolved in Georgia by independence in the early 1990s (though it should be pointed out that a sizeable informal market did exist in Soviet Georgia).1 As a result, for more than a decade the country has been lacking the necessary legal culture for the establishment of the market economy and a legal system satisfying its demands. After the dismantling of the Soviet Union certain laws establishing market economy principles were introduced. However, speculation turned into the main source of income for some of the most successful businessmen. Advantage was taken by those persons who held public offices during the Soviet era (or had close ties with such persons) and organized crime groups that wielded influence during the first years of Georgian independence.2 Cultural attitudes towards capitalism were shaped by the former crime of spekulatia under which individuals engaged in the sale of unrecorded 117

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goods through private illegal deals. The logical outcome was a disregard of business-related legislation and further, failure to consider such practice as unethical. Thus business discipline as a necessary component of market economy culture did not automatically ‘kick in’ even after the dissolution of the Soviet Union. The legacy of a lack of business culture continues to be felt and is reflected in every aspect of business law discussed in this chapter.3 In an extraordinary statement made shortly after the Rose Revolution and the electoral endorsement of that election in early 2004, President Saakashvili seemed to grapple directly with the problems facing Georgian business:4 We will drive away criminals and provide your security; we shall simplify tax legislation; in approximately three to four months we will introduce a tax amnesty – but will not call it an ‘amnesty’ as you were not guilty in that the state was offering you shady rules for the game; we will cut down controlling agencies and the frequency of their visits to you; we will endeavour to set up a good investment climate and international background for you. The Rose Revolution-born government is well aware that revival of business is a prerequisite for the prosperity of the state. A necessary condition of any revival is forcing the shadow economy into a legal framework. While it remains to be observed whether the promises of the new government will be fully kept and the business culture reshaped, this chapter elaborates on business law and law enforcement in Georgia in what can be termed the early days of the post-Rose Revolution era. More precisely this chapter shall review the most important business-related laws, the policy behind those laws and their implementation through the judicial system.

Business-related legislation Legislation and the legislative process After a decade of transition it could be acknowledged in the early 2000s that Georgian legislation contained most of the laws indispensable for regulation of business activities in market economy conditions. Local lawyers, together with Western experts financed by different development agencies and banks, have attempted to introduce regulatory legislation commensurate with Georgia’s stage of transition. Nonetheless, while the legislation covers the field, broadly speaking, each and every piece of business-related legislation has its faults. Many acts contain provisions which the legislators have had to acknowledge are unenforceable, leaving a large space for discretion, arbitrariness and corruption. Many provisions that were supposed to regulate overlapping domains were written in an uncoordinated manner, drawing on different

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legal and economic systems (for example, the Law on Entrepreneurs was based on a German model while the Securities Law is largely based on US practices) thus causing a large number of collisions and subsequent amendments. The current and future Parliaments will have to work hard to cure these inconsistencies. Much regulatory mischief was caused by corruption, one-sided lobbying and simply a lack of strategic overview. Often amendments to laws and the introduction of new legislation were dictated by private interests that disrupted the whole regulatory system. Such moves were plainly visible to the public due to the small size of the wealthy business community and very easy to detect in timeframe and circumstances: the demands of a dominant businessman were sometimes quickly reflected in legislative changes. This, of course, was detrimental to the economy and skewed competition. Another factor contributing to the patchwork legislative regime is the looseness of and lack of discipline in the legislative process which persists after the Rose Revolution. This process is uncoordinated and lacks transparency and the participation of stakeholders, especially as a result of time shortages which the new authorities experience in their drive to demonstrate ‘postShevardnadzian excellence’. This can also be accounted for by several other factors including lack of technical means, human resources and competence in the field. The legislative process is rushed and naturally fails to envisage all necessary nuances and amendments to be made to other laws. Often the drafts are not coordinated between ministries eager to retain control of a particular field, as is also the case with environmental regulation considered in the next chapter. With the basic body of laws enacted and courts in operation, the immaturity of the legal system remains an obstacle to business. It is a matter of adaptation and further refining it to synchronize with the market’s evolution in Georgia. Initially some of the laws were intentionally simplified so as not to overwhelm the as yet rudimentary nature of the market. However, the time has come for business law to mature. Indeed it is crucial for three major legal domains which shall be further assessed in this chapter; namely, tax law, company law and securities regulation. Tax law The World Bank reported that 67 per cent of GNI was in the informal market in Georgia in 2004, a far larger proportion than the East European and former Soviet average of 34 per cent.5 Without enquiring into the accuracy of these particular figures, it is well known that most if not all businesses in Georgia engage in double accounting. The so-called ‘white books’ show a modest taxable profit while ‘black books’ show much larger actual profit that is secured from taxation. When a company’s black book is uncovered by tax authorities, the owners find it cheaper to attempt to bribe a tax official than to pay the overdue taxes and fines.6 As long as cheating on taxes takes place,

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the mafia has cover since it is impossible for businessmen to rely on the government’s help in combating the use of krisha (protection or, literally, ‘roof’ in Russian). And as long as businessmen perceive the need to bribe officials in order to do business, black books will be needed to conceal the cash with which to make bribes (cash that is not traceable to a bank account thus contributing to an unbreakable circle of tax evasion).7 The business environment is further aggravated by the mentality of businessmen who perceive tax evasion as a morally acceptable practice, shifting ‘responsibility’ for such misconduct on to the government and the tax authorities for implementing wrong tax policies in the first place. In fairness, were companies to abide strictly by all the laws, they would be taking themselves off a version of the level playing field and might face business failure. The last Tax Code of Georgia, which contributed to the situation described above, ended on 5 January 2005. The Code had been adopted by Parliament in 1997 and aimed at consolidating rules which had been fragmented and contained in different instruments prior to that time. However, the 1997 Code did not ‘revolutionize’ the existing tax regime. And despite an overwhelming number of subsequent changes effected over seven years,8 the Code has always been perceived by the stakeholders and experts as both unfair and an obstacle to business development. Apart from the Code’s heavily politicized tax policy, its enforcement was arbitrary and inconsistent.9 These two factors in combination led to wide differences between tax rates and the tax yields that would have resulted from proper application.10 Hence for several years not only the business sector but also the state budget has been suffering from the existing gap provoked by inappropriate tax law and implementation. Furthermore, tax exemptions, deferrals, write-offs and arrears that companies received or extracted from the state were widespread in Georgia. In a broader sense, these tax concessions were the very manifestations of a politicized tax system. The result was a low level of tax compliance combined with a high incidence of tax avoidance and tax evasion.11 The former, legal tax avoidance, was implemented by stronger businesses through skilful interpretations of defective legislation. One result of all of this was unfair competition between entrepreneurs active in the same field or sector. Under the 1997 Code, all legal entities engaged in economic activities in Georgia paid 20 per cent profit tax. Value Added Tax (VAT) rate was also set at 20 per cent and VAT registration was compulsory for firms with an annual turnover in excess of GEL 100 000. Calculating the VAT under the relevant formulae was itself a formidable task and posed a problem for Georgia’s relatively underdeveloped system of accountancy. Payroll taxes were very high, amounting to about 30 per cent of the payroll funds. There were also a number of so called ‘nuisance’ taxes (property tax, advertisement tax, road tax, several local taxes, etc.) payable at different rates.12 Overall, the Georgian Tax Code was complicated, arbitrary and difficult to administer. At the same time, due to its complicated nature the Code often

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served as a coercion instrument for corrupt tax officials. This would lead to helpless arguments on the part of experienced lawyers or managers in attempts to defend their business from the imposition of ungrounded penalties. The need for major changes in the tax system has long been apparent; however, until recently there has been a deficit of political will to tackle the issue. There are only a limited number of mechanisms through which the government can motivate taxpayers to move away from the shadow economy: by increasing the cost of non-compliance or modifying rules which have proven to be the most burdensome to taxpayers. Imposing non-compliance costs is a necessary component of any tax system. However, penalties will only be an effective deterrent when the underlying tax system is perceived as roughly equitable. The desire to achieve such equity resulted in a move towards tax reform, accelerated by the newly endorsed Georgian government of President Saakashvili. Aware that its ‘honeymoon’ would not last for long, and yearning to gain support of the business community, the government introduced a new Tax Code on 22 December 2004, with effect from 1 January 2005.13 This was a first and most important step through which the government unveiled its vision of the relationship between the state and business. The new Tax Code of Georgia is definitely simpler than its predecessor. It comprises two books: general and special provisions. Innovations introduced in the general provisions of the Tax Code include: strict tax enforcement measures; tax examination and control procedures such as alter ego ownership and comprehensive invigilation procedures; the possibility of extension for payment of tax for three or six months; reduction of penalties; a new mechanism of dispute resolution (tax arbitration); and taxpayers’ rights to offset overpaid amounts to the budget against other tax liabilities. Special provisions of the new Tax Code provide for only seven particular taxes compared to twenty-one in the old code. These include income tax, profits tax, social tax, VAT, excise tax, property tax and gambling tax. Despite the changes in the new code, there is not much that can be called exceptional with respect to reducing tax rates. For example, the profit tax rate was left intact at 20 per cent and the VAT rate was reduced by only 2 per cent to 18 per cent. Rather, hope is vested in the uniform enforcement of the Code, improved government revenues and the creation of fair grounds for competition. A significant reduction in the shadow economy also requires the adoption of a forgiving attitude towards those who have not – due to previous inequities in the tax law – fully disclosed and paid past liabilities, as well as the creation of a more equitable tax policy environment. Although the new Code reduced the rate of the penalties that apply to non-compliant taxpayers, the issue of already accumulated debts concealed by the businesses and their enforcement (which for many would mean suspension or liquidation of their activities) is still outstanding. In other words, concurrently with

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the Tax Code, a tax amnesty should be effected in the near future so that the companies start from a clean slate and are motivated to comply with new rules without the fear of paying for past deeds to which there were no alternatives. Taxpayers who have chosen to operate in the shadow economy will base any decision to legalize their operations on how both past and future tax liabilities will be treated. Some work is being undertaken in this direction and, while it remains to be observed how the government handles the issue, it is hoped that an integrated strategy will be pursued; one which not only enables previously non-compliant taxpayers to smoothly exit from the shadow economy but also removes barriers to their continued compliance in the future. Finally, another innovation to note is the creation of an additional avenue for settlement of disputes related to taxation. The new Code permits taking disputable tax issues to any arbitration court in Georgia. The idea of allowing an independent judicial entity to decide tax disputes may have a positive and accelerating effect on improving relations between the state and entrepreneurs; however, it remains to be seen how the mechanism will be applied in practice. Company law Together with the Civil Code,14 the Law on Entrepreneurs15 holds an important place in regulating business activities in Georgia. The law was adopted by Parliament in October 1994 and was seen as the first significant piece of legislation drafted to international standards which corresponded to the principles of a market economy.16 The law endeavoured to keep regulation to a minimum, making it easy to comprehend and apply – an essential boost to economic development in the early stages of transition.17 Most importantly the law unified all the legal forms of entrepreneurial activities under one normative Act reflecting the codification tradition of continental Europe. The structure of the law comprises a general part where common rules for all organizational forms are unified, and a special part providing for individual regulation of entrepreneurial forms which include sole proprietorship, partnership, limited liability companies, joint stock companies ( JSCs) and cooperatives. Of these business forms, the most commonly used types in Georgia are sole proprietorship, limited liability companies and JSCs. While the Law on Entrepreneurs provides for modern regulation – patterned broadly on the German equivalent – ten years after its adoption the time has come to synchronize it with the evolved needs of Georgia’s economy. In particular, the interests of minority shareholders, creditors and other business partners need to be strengthened in order to decrease transaction costs and increase the efficiency of the Georgian economy. At the same time it has to be kept in mind that the law is not buttressed by wellestablished court practice or analytical research which is ‘vital to fully unfold the regulatory power of the law’.18 Partly this is caused by the deficiency of

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the court system, discussed below, as well as the need for further development of the law itself. Since its inception the Law on Entrepreneurs has been heavily amended. Some of these amendments did not work, some work very well and some have simply not been used.19 The main challenge facing users is that it does not embrace all essential details which are necessary for conducting business activities. While originally drafted close to provisions in the German model, the Georgian version contained fewer detailed rules due to the difference in levels of sophistication of the economic and legal environment in the two states. However, together with the development of the market economy, the need for more sophisticated provisions has emerged. This particularly applies to the norms regulating JSCs. The time has come to switch to a law better oriented towards capital markets, one which can better accommodate the protection of shareholders’ rights and be harmonized with EU Directives. The reform of the corporate governance sector will be an important determinant for attracting foreign investments. In light of the fact that foreign investment remains marginal at present, internal sources of finance are crucial; indeed entrepreneurs perceive the lack of access to finance as one of the main obstacles to doing business in Georgia. The private sector is dominated by small and medium-sized enterprises, with a majority of them established as JSCs. Debt finance as an alternative – or the only – source of finance for most of the businesses in Georgia, is burdensome and inflexible and interest rates are very high, often leading to default. In light of the absence of adequate financing, JSCs are particularly important.20 Discussions are currently taking place in Georgia around better accommodating the needs of JSCs through the Law on Entrepreneurs.21 The issue is problematic, since on one side of the scale there are ten years of court practice and stability and on the other the need to contribute to the acceleration of financial market development through elaboration of a better regulatory regime for corporate governance. It remains to be seen to which of these factors the legislature assigns priority. Meanwhile a brief overview of securities regulation and the securities market in Georgia, directly linked to the sophistication of the rules governing JSCs, is provided below. Securities regulation Large JSCs, either with more than 100 shareholders or listed at a stock exchange, are called Reporting Companies and are subject to additional regulation by securities law. In particular, specific requirements are set for the company prospectuses and reporting standards. To be listed at a stock exchange companies may also be required to conform to the specific exchange regulations. A functioning securities market is an important factor in attracting foreign and local investors.22 The Georgian Stock Exchange was established in January 1999 after adoption of the Law on Securities Market in late 1998.23 Before the passage of that law, norms regulating securities

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issuance and trade were scattered in various acts issued by different governmental bodies. The 1998 law draws on American experience but, similarly to company law, it also lacks specificity in certain areas. While on the one hand it establishes the Georgian Securities Commission and vests it with the authority to further issue normative acts for regulation of specifics of securities trading, the normative base for fully-fledged development of the market is far from perfect. At present the Georgian securities market is weakly developed.24 Liquidity of the market for 2003–4 was very disappointing,25 though hopefully rising foreign interest in Georgian financial markets will improve the situation over time. Such interest, of course, is linked to a satisfactory regulatory regime for securities markets and a stable business environment in Georgia generally. Much remains to be improved and steps that should be undertaken for the improvement of the market and development of its liquidity include perfecting market regulation, namely, by harmonizing the legislation on capital markets, privatization and corporate law, creating legislation on investment funds, establishing legislation on private pension funds, and maximal compliance of corporate governance norms with the OECD corporate governance principles and best practices.26 These steps would contribute to winning the trust of business people and the investing population. Conclusion on legislation Theoretically the list of Georgian laws contains most of the pieces vital for business development. However, at a more advanced stage of development compared with the early to mid-1990s, many have to be revised. At the same time such revision should be both more participatory and, to avoid placing extra burdens on the part of judicial and enforcement systems, genuinely needed. The constant changes that have occurred throughout the years of transition have been reflected in deficient litigation practices detrimental to all parties. The simplicity and clarity of legislation are particularly relevant in the light of the need to restrict the power of judges operating in a socially vulnerable environment. The lack of these qualities further aggravates the situation where the judicial system is found to lack expertise. All of this leads to a discussion of law enforcement and the judiciary’s role.

Law enforcement A basic principle of contract law, without which the existence of modern business is not possible, is that an aggrieved party to a contract has a right to claim damages. Georgian legislation embraces this principle, but the real question is whether the Georgian court system functions as a mechanism for effective contract enforcement and to what extent entrepreneurs rely on this mechanism. The latter can be deemed a criterion for the measurement of the

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effectiveness of the judicial system. A properly functioning judiciary decides matters within its competence impartially, on the basis of facts and in accordance with the law without any restrictions, improper influences, inducements, pressures, threats or interferences, direct or indirect, from any quarter or for any reason.27 These are international standards met on paper but not observed in reality in Georgia. As noted in the book’s Introduction, the reform of the Georgian judiciary was a major development initiative of the late 1990s.28 It was meant to tackle several problems including competence, impartiality and independence of the judges, as well as the effectiveness of the court system. In order to accommodate such an important transformation, extensive legislative and institutional reform was undertaken, including a reorganization of the court structure. Also judges were required to pass qualification exams and be appointed to office through a competition.29 But did the reform establish a court system that meets the needs of market economy? After the adoption of the Constitution and Georgian Law on Courts of General Jurisdiction,30 courts are no longer administrative organs of the state but an independent branch of the state whose primary function is to protect legal rights and interests. Independence is viewed in the context of the doctrine of separation of powers: the judiciary must not be subject to the control or influence of the executive or the legislature. However, genuine independence and impartiality are hampered by several factors, including Georgian legal culture, especially distrust of the law and rampant corruption. While the reformers deem the era of ‘telephone justice’ over,31 practising business lawyers in Georgia perceive partiality in the court system as a bigger problem than the competence of judges.32 Apart from procedural inflexibility and the time-consuming nature of Georgian civil procedure,33 cases are artificially stretched out depending on their nature and the interests involved. It is a popular notion in Georgia that judges are not immune from outside influence, which may be exercised through bribery or coercion or personal relations. The susceptibility of judges to outside influence, both in general and in relation to a particular trial, is conditioned by the grave social economic conditions of judges. Further, as to their accountability, the system is not wellregulated and flexible enough to accommodate effective sanctioning of judges’ misdeeds. At the same time, it should be pointed out that improvement in the judiciary has been made since the court reforms of the late 1990s.34 One of the key factors impeding the effectiveness of the judicial system is the competence of judges.35 The system lacks judges properly trained to accommodate the needs of the business community and market economy. Judges have to keep abreast of not only the rapidly changing and growing legislation regulating business activities but also the principles of conflict of laws and norms of international law that govern international trade. All of this requires considerable knowledge in different areas of commercial law, ideally including knowledge of foreign languages and arbitral practices.

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At the same time, in practice judges must cope with the imperfections in the laws. This work is impeded by the fact that laws are vaguely worded, inconsistent and may contradict other legislation or regulations. No law is sufficiently drafted to offer norms applicable to all the situations which arise and, since a judge is obliged to settle any dispute whether directly regulated by the norms of the law or not, the necessity of judge-made law becomes evident. Interpretation of laws and normative acts thus becomes a professional task of the court, though unlike their common law cousins, Georgian lawyers are unaccustomed to this task. With wide interpretation and the use of legal analogies, the court enters dangerous territory between the legislative and judicial powers, and competence takes on even greater importance.36 However, with limited understanding of new market-oriented developments and business law, the competence of Georgian judges leaves much room for improvement. As a result, deficiency of legislation is further extended by incompetence of judges. Furthermore, to avoid apparent failures of justice, judges often fail to spell out legal bases for the decision rendered and their judgements lack detailed analysis of legal issues. Inaccuracy and carelessly issued opinions in the course of litigation diminish the prestige of judges and the public’s trust in them.37 Of course, decisions in other civil law countries, notably France, may be brief, but that model may not be appropriate here. Law is often cited by lawyers as ‘evidence’ before the judges who are reluctant to look into the legislative acts themselves,38 and there is also very limited opportunity to consult academic resources when interpreting Georgian legislation. No tradition of travaux préparatoire exists and comments on certain major normative acts like the Civil Code or Law on Entrepreneurs are of limited help since they are often not updated and at any rate are uncritical. Explanatory notes attached to the draft laws submitted to Parliament39 are also difficult to access and are similarly of little help. Decisions of the Supreme Court are published and are binding on lower courts; however, the reasoning provided in such decisions is limited due to the deficiencies of the law itself. The Georgian court system is often considered to be ineffective at enforcing contracts. This is unfortunate since the protection of rights and interests arising out of contracts is vital for business. And, as the judiciary fails to meet the needs of the business community in this regard, informal elements fill the gap. These include criminal groups who function to enforce legal rules and resolve economic disputes, and reliance on political connections and networks. As long as such relations remain in place, the law and legal mechanisms for the protection of legal interests will remain of marginal importance.40 If the impartiality and competence of the court are improved, the ability of courts to lure business people back into formal dispute resolution will be improved. Another drawback of the judicial system is procedural inflexibility and a backlog of cases. The principle ‘justice delayed is justice denied’ is not properly

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embraced in procedural legislation, thus constituting another element of the judiciary’s ineffectiveness. Furthermore, the enforcement system is rudimentary because it is difficult to get the bailiffs to carry out the court’s judgements; bailiffs rarely find any significant assets in the hands of losing Georgian parties and their bank accounts seldom contain any money by the time judgement is confirmed. Judicial ineffectiveness and violation of the impartiality principle undermine the development of the rule of law in Georgia and give rise to the public and business scepticism about laws and courts noted in several chapters. The economic costs of the poor judicial system are enormous as the unstable legal environment increases risks for business transactions, undermining the business environment and discouraging investment. Hopefully new ‘revolutionary’ waves will breathe new life into the judiciary and improve the productivity of reforms currently being implemented.

Conclusion Convincing potential investors that with new political developments, Georgia is the country to invest in, requires much work to be done. Liberalization of the business environment, eradication of corruption, improvement of lawmaking and enforcement are very much on the agenda of the new government. However, it remains to be seen how the Rose Revolution reshapes business mentality in Georgia. A sophisticated legal structure aimed at the protection of property rights and the sanctity of contract, and which offers viable mechanisms for contract enforcement, also requires a high level of legal awareness among the potential users of the legal system. We are not there yet.

Notes 1. See G. Mars and Y. Altman, ‘The Cultural Basis of Soviet Georgia’s Second Economy’, Soviet Studies, 35 (1983), p. 546. 2. I. Aravidze, ‘How One Clan Took Over a Large Business Sector’, 24 Hours (3 March 2004). 3. Much of the story can also be laid out in numbers. Although caution must be exercised in relying too heavily on somewhat arbitrary rankings, the Index of Economic Freedom – an annual ranking of the freedom of the world’s economy co-produced by a conservative US think-tank and the Wall Street Journal – is useful in this regard. Georgia is ranked 100 among 161 states sampled and positioned under the category of Mostly Unfree Economies. By comparison, Armenia is ranked at 42 and Azerbaijan at 103. Factors used to calculate positions on the index include the fiscal burden of the government, government intervention in the economy, capital flows, foreign investment, regulation and the size of the informal market. See M. A. Miles, E. J. Feulner and M. A. O’Grady, ‘2005 Index of Economic Freedom’. Available at http://www.heritage.org/research/features/index/. 4. Cited in T. Khorbaladze, ‘New Rules for the Game for New and Old Business Leaders’, 24 Hours (8 March 2004).

128 The State of Law in the South Caucasus 5. The World Bank Group, Snapshot of the Business Environment (2004). Available at http://rru.worldbank.org/DoingBusiness. 6. N. Loladze, ‘Business Environment in Georgia: Selected Discussion Topics’. Available at http://www.worldbank.org/wbi/devdebates/ECA2/georgia_topics_eng.pdf. 7. R. D. Billings, ‘Why Business Fails in Russia’, International Lawyer, 35 (Spring 2001), p. 123. 8. Approximately 100 packages of changes have been made to the Tax Code since its adoption. Electronic Database Codex 2001, C/S SP1.5.4. OE. 9. Supra note 6. 10. M. E. Schauffer and G. Turley, Effective versus Statutory Taxation: Measuring Effective Tax Administration in Transition Economies, EBRD Working Paper No. 62 (May 2001). 11. Ibid. 12. Z. Rogava, Fundamentals of Tax Law (Tbilisi: Elf, 2000). 13. S. Saradzhyan and L. Pronnina, ‘Bendukidze Handed Georgia’s Economy’, The Moscow Times (2 June 2004). For the Tax Code see Electronic Database Codex 2001, C/S SP1.5.4. OE. 14. The Civil Code of Georgia (Tbilisi: Bakur Sulakauri Publications, 2001). 15. Law of Georgia on Entrepreneurs – Desktop Book (Tbilisi: Bona Causa, 2003), pp. 7–69. 16. L. Chanturia and Ninidze, Comments to the Law on Entrepreneurs (Tbilisi: Samartali 2002), pp. vi–xiv. 17. K. Betaneli and M. S. Masbaum, ‘Company Law in Georgia’, Georgian Law Review, 6 (2003), p. 279. 18. Ibid., p. 325. 19. N. Patsuria, ‘Treating Entrepreneurs’ Law with Joint Efforts’, Georgia Today (23–29 July 2004). 20. E. Falcetti, P. Sanfey and A. Taci, Bridging the Gaps? Private Sector Development, Capital Flows and the Investment Climate in South-Eastern Europe, EBRD Working Paper No. 80 ( June 2003). 21. Supra note 19. 22. Some studies, however, question whether the relative failure of a securities market negatively impacts on transition counties’ economies to any great extent. See Z. Kominek, Stock Markets and Industry Growth: an Eastern European Perspective, EBRD Working Paper No. 81 (October 2003). 23. Law of Georgia on Securities Market – Desktop Book (Tbilisi: Bona Causa, 2003), pp. 257–314. 24. T. Djibuti, ‘Securities Market of Georgia in 2002’, Georgian Economic Trends 2003 (2003), p. 2. 25. JSC Galt & Taggart Securities, Georgia Weekly Stock Market Commentary (December 2004). 26. T. Akhobadze, ‘Compliance of Securities Industry Operation in Georgia with International Norms’, Quarterly Review – Georgian European Policy and Legal Advice Centre, 1 (2004), p. 109. 27. Adopted by the Seventh United Nations Congress on the Prevention of Crime and the Treatment of Offenders held at Milan from 26 August to 6 September 1985 and endorsed by General Assembly resolutions 40/32 of 29 November 1985 and 40/146 of 13 December 1985. 28. V. Chachua, ‘On Some Institutional Deficiencies of Judicial Reform’, Georgian Law Review, 6 (2003), p. 419. 29. Law of Georgia on Courts of General Jurisdiction, Electronic Database Codex 2001, C/S SP1.5.4. OE. 30. Ibid.

The Legal Basis for Business in Georgia 129 31. The term ‘telephone justice’ well describes the ills of the Soviet judiciary, as cases were often decided not in the courtroom but in telephone conversations between judges and officials. K. Halverson, ‘Resolving Economic Disputes in Russia’s Market Economy’, Michigan Journal of International Law, 18 (1996), p. 59. 32. Interviews with Z. Bibilashvili (Director, E & Y Law firm) and L. Gogiberidze (Head of Corporate Practice, E & Y Law firm), 27 July 2004. 33. T. Liluashvili, Conduct of Civil Proceedings in the Court, 2nd edn (Tbilisi: GCI, 2001). 34. C. P. M. Waters, Counsel in the Caucasus: Professionalization and Law in Georgia (Leiden: Martinus Nijhoff, 2004), pp. 55–61. 35. S. Papuashvili, ‘The Role of Judge-Made Law in the Development of Law and Access to Justice’, Georgian Law Review, 6 (2003–4), p. 457. 36. Ibid. 37. Ibid. 38. Supra note 32. 39. Article 30 of the Law of Georgia on Normative Acts, Electronic Database Codex 2001, C/S SP1.5.4. OE. 40. This has also been termed a question of ‘demand for law’. See K. Hendley, ‘ “Demand” for Law in Russia – A Mixed Picture’, East European Constitutional Law Review, 10 (2001), p. 73.

8 Regulation and Reform in Telecommunications Karen Andreasyan

Introduction One of the sectors that has been the object of a drastic programme of reform and has given rise to a huge amount of new legislation in each of the South Caucasian states is telecommunications. The following comparative analysis of legal reform in the telecommunications sector shows that the quality of the reforms implemented can have an important influence on the growth and development of a particular sector. The painful failure of Armenian telecommunications reforms demonstrates that unreasonable policies and regulations can seriously harm the sector in question and can have a very negative impact on the overall economy of the state. Although the laws and legal practices in existence in each of the South Caucasian states are far from ideal, the experience of Georgian telecommunications reform suggests that, if well-structured policies are introduced in a proper fashion, legal mechanisms do work in the region. And they yield positive results, as evidenced by the significant growth in the telecommunications sector in Georgia.1 This chapter is divided into three sections. Section two addresses the forms of privatization experienced by the three South Caucasian countries. Section three considers the question of who should regulate the sector – and how – following privatization. Section four then examines a particular area of regulation, namely price regulation, and finally some general conclusions are offered.

Liberalization of the sector Reform of the telecommunications sector varies fundamentally according to the region and country in which it is carried out, yet certain common trends may nevertheless be identified.2 By and large, reforms aim to increase investment and encourage the introduction of new technologies and services, as well as raise the effectiveness of the telecommunications sector in terms of quality, availability and affordability of services on offer. The widely accepted 130

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policy model, which is generally considered to meet these goals and objectives, consists of several regulatory steps: (a) the privatization or commercialization of the public operators; (b) the introduction of competitive operators into the telecommunications market; (c) the introduction of transparent regulatory processes; (d) the mandatory interconnection of competitors and the unbundling of local loops in the telephone network; (e) price regulation (using Price Cap or Rate of Return regulation mechanisms to prevent excessive pricing); (f) the introduction of targeted universal access funds; and, (g) the removal of barriers to international trade in telecommunications. In other words, reform comprises privatization or commercialization, liberalization and the introduction of competition, and efficient regulation. Privatization can be defined as the transfer of a state enterprise into private sector ownership, i.e. the shifting from public to private hands of the ownership of the productive assets, the right to take elective decisions and the entitlement to residual profit flows. The state enterprise may be privatized as either a monopolistic or competitive entity. The prototypical ownership reform is to convert a ministerial telephone service provider into a joint stock company that is privately owned and, therefore, controlled by private investors. In principle, the government could decide not to influence the structure of ownership by simply converting the state-owned enterprise into a joint stock company and selling the stock wherever and to whomever it can. It is more common, however, for a large proportion of the ownership to be sold to one investor or a few large ones. Over the last two decades, the privatization of state-owned telecommunications operators around the world has been taking place at an astonishing rate. In the mid-1980s, privatization was rare in the developing world. However, by 1999, one-quarter of the countries of sub-Saharan Africa, about half of the countries in Asia and two-thirds of the countries in Latin America and the Caribbean had at least partially privatized their incumbent phone operators.3 In some countries, attempts to privatize state-owned telecommunications enterprises have failed because of insufficient preparation or poor timing. Other countries have successfully privatized public telecommunications monopolies, but have postponed opening up the sector fully to competition. As a result, they have experienced slower sector growth and higher prices than countries where companies were privatized without a monopoly guarantee. Those countries that still have private telecommunications monopolies are faced with similar problems – high prices, slow-paced innovation and limited opportunities for new entrepreneurial initiatives. Several countries have opened up the market to new providers, but have neglected

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certain key elements of the relationship between the new entrants and the incumbents.4 The communications industry is on the threshold of enormous changes: the monopolistic telecommunications structures that date back to around the turn of the nineteenth century are disappearing. In many countries liberalization, or rather the partial abolishment of monopolies, has led to greater competition amongst the telephone service providers and the basic network operators. Numerous state-owned telecommunications operators have been privatized, and a wave of pro-competitive and deregulatory telecommunications policies has swept the world. New market-based approaches to the supply of telecommunications services have been introduced in scores of countries. Monopolies are being eroded, competition is burgeoning and opportunities for private business are multiplying. Over the last decade the most dramatic progress in liberalizing telecommunications markets has occurred in Europe and other OECD countries. By the end of the last decade, over 96 per cent of the OECD market, measured by total telecommunications revenues, was open to competition.5 The extensive reforms in the telecommunications sector worldwide have extended, at least in part, to the states of the South Caucasus, although the implementation of these reforms has been hindered by problems specific to this region. The three South Caucasian states suffered significantly from the break-up of the Soviet Union and the collapse of the centralized planning system. Regional conflicts and the absence of export markets have worsened the situation. The majority of industrial entities have stopped functioning and the general infrastructure has become dilapidated. GDP has decreased by approximately 50 per cent since 1991, poverty levels have reached 60–80 per cent and unemployment has skyrocketed.6 Nevertheless, since 1994, all three of the South Caucasian republics have shown signs of macroeconomic recovery and there is evidence of some progress in implementing structural reforms, including in the telecommunications sector. At the time of the collapse of the Soviet Union, all three of the South Caucasian republics inherited relatively extensive, but poor quality and inefficient, fixed telephony networks. In 1990, the teledensity (the number of main telephone lines per 100 inhabitants) was eighteen in Armenia, nine in Georgia and ten in Azerbaijan, which is relatively high when compared with countries with a similar income level in other regions. By comparison, in the same year, the average telephone penetration rate was about forty-three main telephone lines per 100 people in OECD countries, only slightly lower than in the European Union. There were approximately 1.5 telephone lines per 100 people in South Asia and sub-Saharan Africa, compared to sixty-four per 100 people in the United States.7 For the states of the South Caucasus, one legacy of the non-commercially driven network extension was the misallocation of lines and resultant low call volumes. This, coupled with extremely low revenues per line due to

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politically driven low local tariffs, which were cross-subsidized by high international tariffs, led to chronic underinvestment in the sector. As a result, equipment was outdated, network quality poor and digitalization stood well below the level attained by other countries of similar income. In recent years the states of the South Caucasus have all launched sector reforms, the scope and focus of which vary. Whereas Georgia opened up its telecommunications sector to competition prior to the privatization of its fixed network and Azerbaijan allowed for competition among several of the authorized private–public joint ventures, Armenia concentrated its efforts on privatizing the incumbent and securing the proceeds of this deal, utterly failing to liberalize the sector.8 Privatization is the only reform to have been implemented in the telecommunications sector in the Republic of Armenia. Privatization of the telecommunications sector was part of a broad, often turbulent, programme of privatization, in which the ownership of many sectors was transferred from public into private hands following the collapse of the Soviet Union. The privatization of the telecommunications sector in Armenia was not accompanied by the introduction of competition, contrary to the widely accepted model of telecommunications sector reform mentioned above, or efforts to promote growth in such an important field. The process of telecommunications reform in Armenia has been hindered by the government’s reluctance to open up the sector to competition. Privatization of the incumbent telecoms operator was made a priority, as was ensuring the continuation of its monopoly as a private operator. The phases of this process can be divided as follows: (a) In 1995 the Ministry of Communication of the Republic of Armenia founded a joint venture, Armenian Telephone Company (ArmenTel), 49 per cent ownership of which was given to American Trans World Telecom Limited and 51 per cent to the Government of the Republic of Armenia. In the international telecommunications market ArmenTel operated as a regulated monopolist. (b) In 1996 the state enterprise, Yerevan Telephone Network, merged with ArmenTel with the aim of creating, developing and operating new Armenian domestic and international fixed and mobile telephone networks. (c) In 1997 the state enterprise, Armenia Telephone Network, merged with ArmenTel with the aim of ensuring the stable development of the telecommunications networks in Armenia and the establishment of unified telecommunications systems. (d) In 1998, the Greek telecommunications company, Hellenic Telecommunications Organization (OTE), paid US$142.47 million for a 90 per cent stake in ArmenTel, the Armenian government retaining the residual 10 per cent. ArmenTel was granted Licence # 60, which

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endowed the company with the exclusive right to provide a wide range of telephony services. In addition to being the sole provider of local, long-distance and international services in the country, ArmenTel was allowed to monopolize a range of other commodities such as cellular telephony services, paging services, personal communication services (PCS), special mobile radio services (SMR), global system of mobile communication services (GSM) and mobile satellite services (MSS). According to the terms of the licence mentioned above, the licensing body was obliged not to allow any party other than Armenian Telephone Company to provide any of the services set out in the licence. In fact, the government was obliged actively to take measures to prevent anyone else providing any of the services set out in the licence. The licence was to be valid for fifteen years and on its expiry (in 2013), was to be automatically renewed for another fifteen years, unless the Ministry of Communication of the Republic of Armenia sent written notification to the effect that an application should be made in order to reaffirm the licence. Such written notification was to be given twenty-four months prior to the expiration of the validity term. The granting of a licence with such favourable conditions to the incumbent operator would suggest that the Armenian government was strategically committed to promoting a ‘natural monopoly’ in the telecoms sector. Questions were asked at the time, however, about ‘irregularities’ and ‘ambiguities’ surrounding the privatization of ArmenTel. The Constitutional Court ruled in 1999 that article 24 of the Telecom Law (which sanctioned the monopoly) was unconstitutional and recommended that ArmenTel should lose its monopoly within five years.9 That this ruling was never implemented and that the original legislation allowing the privatization of ArmenTel was (deliberately?) ambiguous is a discouraging indicator of both the weakness of the laws in Armenia and the failure to implement them. Disturbing too is the suggestion that ArmenTel disregarded the obligations, responsibilities and restrictions placed upon it in Licence # 60 and was not penalized for this. There is much documented evidence that after it was privatized ArmenTel continuously infringed the law, neglected its duties and operated unlawfully: there are indications that ArmenTel broke the law when procuring equipment10 and violated its own company charter and regulations approved by the Board of Directors;11 evidence of bribery at ArmenTel has been uncovered, on the basis of which a criminal case was instituted against the company;12 based on media reports and customer complaints it would appear that ArmenTel committed offences relating to the introduction of a credit card payment system which allowed customers to connect up to the cellular telephone network;13 according to media reports, in 2001–2 ArmenTel waged an unlawful struggle against Internet operators which substantially harmed the development of the

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Internet in Armenia;14 and numerous customer complaints have been lodged regarding the quality of ArmenTel’s services.15 Furthermore, it was announced at the extended board hearing of the Ministry of Post and Communications of the Republic of Armenia held in February 2002 that, at the end of the first stage of the investment programme (1998–9), a mere US$25 million, instead of the agreed US$100 million, had been invested.16 At the same hearing it was stated that a number of the obligations assumed under the licence had not been fulfilled, in particular telephone digitization and the introduction of a cellular system, and network renovation work in rural regions. Finally, ArmenTel’s tariffs were found to be too high and its services substandard.17 Thus, according to evidence amassed by Armenian journalists and the Ministry of Communications, ArmenTel had not adequately fulfilled its responsibilities, investments had not been made in full, and the technology employed by ArmenTel failed to deliver satisfactory telephony services. Customers in Armenia were enduring poor quality communication services and high tariffs, certain services were unaffordable for a large part of the population and the country was lagging behind the times in terms of the provision of new and innovative technologies. Increasing calls for the Armenian government to force ArmenTel to improve its performance and fulfil its investment obligations led to the unprecedented decision in November 2004 to allow some competition in the telecommunications sector. ArmenTel’s licence no longer gives the company exclusive rights to provide GSM, satellite, mobile radio communications services or Internet access.18 The licence to provide GSM services has been awarded instead to K-Telecom, which is affiliated to Karabakh Telecom, the sole telecoms operator in Nagorno Karabakh. While the move to open up the sector to competition has been welcomed in some quarters, grave concerns have been expressed regarding the transparency of the tender process and the alleged political motivation for the decision.19 By contrast to Armenia, both Azerbaijan and Georgia have for some time permitted a certain level of competition in this market segment. However, even in these relatively liberalized environments, public ownership of the main networks is undermining their ability to invest and to compete, and full privatization is overdue. In Azerbaijan control over the sector has thus far been assured by a law which states that any telecommunications venture must be at least 50 per cent state-owned. The Ministry of Communications (MoC), through its full ownership of the major network operators, Baktelecom, Aztelecom and the Nakhchevan Communications Department (NCD), which cater to around 835 000 subscribers, dominates the telecommunications industry of Azerbaijan. In 1998 the MoC developed a strategy to modernize the entire telephone network by 2004 at the cost of an estimated $500 million. With the realization that it may not be able to secure all of the necessary financing itself, in March 1999 the MoC submitted to the Cabinet of

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Ministers a list of telecommunications enterprises to be privatized. Among these were Aztelecom and Baku City Network, which would be first converted into joint stock companies.20 Joint ventures have been established in order to attract the necessary capital to gradually digitalize the network and to upgrade and/or operate automatic telephone exchanges in a bid to boost local network access. The most notable of these has been the Azeri–UK–Russian joint venture AzEuroTel, which, despite the dominance of the state-owned operators, has managed to introduce some degree of competition in the sector. AzEuroTel was originally licensed by the MoC for the provision of all types of telecommunications services, with the exception of cellular and international telephony. AzEuroTel today provides the whole spectrum of telephone and data services to its 20 000 subscribers in Baku, many of which are oil companies and government agencies. Another joint venture, Ultel, partially owned by Turkey’s equipment vendor Netas, offers basic local telephone service to some 10 000 subscribers. Caspian American Telecom (CATel), partially owned by the US’s Metromedia, has been given a licence to provide local telephony via a wireless local loop (WLL) network, which it is already operating with around 8000 subscribers.21 In Georgia, two vertically separated state-owned companies dominate the fixed telecommunications market: GEC (Georgia Electrical Communications – also known as Elektrokavshiri), which is a provider of local telecommunications services, and Georgia Telecom (GT – also known as Sakartvelos Telecomi), a majority (51 per cent) state-owned provider of domestic and international long-distance services. GEC currently operates some 340 000 telephone lines and GT has a subscriber base of 250 000. The process of privatization of Georgia Telecom and GEC has recently begun, the exact details of which are still being worked out by the appointed financial adviser, Kommerzbank of Germany, which was awarded the tender following an international competitive bidding process. The government claims its intention is to privatize them separately, as evidenced by a presidential decree on competition, which confirms GT’s right to a licence to serve the local market and GEC’s right to provide long-distance and international services. In effect, two national full-services providers will be established. Despite the market dominance of the state companies, some private firms have managed to make significant inroads into the Georgian communications market. Two such pre-eminent private operators in the local and long distance markets respectively, are New Net, serving some 120 000 subscribers in Tbilisi alone and with a presence in other markets, and Egrisi, considered Georgia’s second long-distance carrier. In addition, FOPNet, which operates the country’s largest fibre optic network, with about 150 000 subscribers, is becoming Georgia’s third long-distance carrier.22 In Georgia, twenty-six companies provide telephony services, of which ten provide long-distance and international services. Competition in the

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market is assured by legislation which contains a number of monopoly prevention provisions. One of these obliges operators to interconnect their networks. The state, when developing a tariff policy, ought to take into consideration the fact that a monopoly or a dominant market position may entail a low quality of services and high tariffs. The National Commission of Georgia on Telecommunications, reacting to the monopolization of the domestic telephony services in certain of its cities and regions, set a maximal price for these local telephony services, in order to protect the consumers against high tariffs.

Telecommunications regulators With the increase in privatization, the liberalization of various market segments and the change in the nature of services offered, the need for a regulator, as an independent referee, becomes a necessity. During the 1990s, regulators emerged as key players. By 1999, half of the countries of Asia and sub-Saharan Africa, one-third of Middle Eastern and North African countries and three-quarters of Latin American and Caribbean countries had independent regulators. In a little over a decade their number worldwide has grown from a mere twelve to 102.23 The role of government intervention in this sector is to enforce competition and act as a surrogate for the marketplace, where actual competition cannot, or does not, exist. Regulators are an integral part of the new economy and, in particular, the communications environment. It is generally accepted that the regulator has a legitimate role in correcting market imperfections, by regulating the prices and quality of service offered by a natural monopoly or by using regulation and anti-trust measures proactively to promote competition. There are several approaches for regulating the telecommunications sector. The current standard institutional structure for the telecommunications sector worldwide includes a separate regulator. There is a view that the convergence of the markets requires a merger of the sectoral regulators to form a single communications regulator within a country. While the majority of countries have established an independent regulator, the role of the competition authority has nevertheless grown as competition has developed in the telecommunications market. In general, the telecommunications regulator is responsible for technical regulation: spectrum allocation, number allocation, type approval, standard setting as well as economic and social regulations specific to telecommunications (for example licensing, universal service, price regulation, the interconnection regime and rights-of-way).24 The trend today is towards deregulation. The goal of deregulation is to free companies from the bonds of regulatory conveniences and to allow them to experiment in the marketplace with more efficient technologies and joint products. Most arguments now levied against regulation are based on the contention that it is inefficient and unnecessary, not that it is improper per se.

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Proponents of deregulation claim that, as technologies converge, the removal of controls will produce competition and if, by any chance, this does not occur, the deregulators will be ready to step back in and regulate.25 The arguments made against deregulation are that it enables companies to raise prices and overcharge customers; that communications, as an essential part of the infrastructure of everyday life, should be closely regulated or even owned and operated by public agencies; that it encourages industrial concentration, leading to an undesirable growth of corporate power; and that it does not adequately protect the interests of the poor and others who might be left behind in a race to embrace new technologies.26 A core problem in designing regulatory institutions is how to deal with the fact that regulators are unlikely to know as much as the company about demand, cost and technology, and, by extension, the true efficiency and profitability of the company. Furthermore, regulation in telecommunications requires the regulator to have professional knowledge of the industry, which is technology oriented. Therefore, although a regulator is powerful in law, in practice it can be very weak in relation to the companies it supposedly regulates. An independent regulator is the most effective option. The term ‘independence’ does not imply independence from government policy, or the usurping of power to make policy, but rather independence to implement policy without undue interference from politicians or industry lobbyists.27 An independent regulator is a body legally distinct and functionally independent of telecommunications organizations. More effective regulation can result where there is a certain degree of structural independence allowing the regulator to implement its mandate without political intervention. In Armenia, policy-making relating to the telecommunications sector, and the regulation thereof, is currently carried out under the auspices of the Ministry of Transport and Communications. However, a new regulatory system is in the process of being introduced in Armenia. The draft legislation states that the regulation of the telecommunications sector will be overseen by two entities, a Commission on Public Services and by a ‘Competent Body authorized by the Government’.28 Regulatory powers are to be divided, with the Competent Body responsible for the more technical aspects of the sector and the Commission responsible for ensuring competition and effectiveness of the services on offer to customers in terms of choice, price and quality. A management system such as this is already in place in Georgia and the Armenian draft law is a step in the right direction in terms of avoiding a concentration of power and the potential for abuse. According to the Law on Communication and Post of Georgia, the policymaker for the telecommunications sector is the Ministry of Communication and Post, while regulatory functions are given to the National Commission regulating the area of communication and post.29 The Commission is an independent body consisting of three members who are appointed by the country’s President.30 The major difference between the two bodies lies in the assignment

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of policy-making and regulatory operations. The institutional structure of the Georgian National Commission is the guarantee of its independence. The Commission is not under the control of a ministry, nor is it financed by the state. It has its own budget, with income generated from licensing fees and from the so-called regulation fee, which amounts to 1 per cent of the annual turnover of a licensed operator. A proportion of the revenue gained from the licensing fee (20 per cent of the amount paid for each licence granted) is allotted to covering the Commission’s expenditure, while the remainder (80 per cent) is allotted to the Universal Access Fund founded by the Finance Ministry. Revenue gained from the regulation fee is also divided between these two beneficiaries. In addition, the independence and accountability of the activities of the Commission are guaranteed by means of open and transparent operating procedures: all documents received must be published on the Commission’s website and all the sittings of the Commission must be open. The Georgian Ministry of Communication and Post of Georgia implements national policy in the area of communication and post. It does this by, among other things, developing and implementing medium- and long-term strategy for communications networks, developing technical and environmental standards and ensuring that these standards are met, and managing communication masts. Licensing, however, falls under the auspices of the National Commission on Telecommunications. The Commission also defines and regulates tariffs for the services of communication networks, allocates radio frequencies, ensures competition, resolves – within the limits of its authority – disputes arising between licence holders as well as between licence holders and consumers; and ensures that conditions and requirements relating to licences are respected by licence holders.31 Unlike in Georgia – and what is currently contemplated in Armenia – the management and regulation of Azerbaijan’s communications sector is undertaken by a single body: the body authorized by the executive power. Under the Law of Azerbaijan on Communication, the Ministry of Communications (MoC) is at the same time policy-maker, regulator and owner/operator of the main telecommunications networks in the country. In addition, the President and the Cabinet both enjoy powers which allow them to adjust the composition of the MoC. The State Commission on Radio Frequencies of the Azerbaijan Republic (SCRAR) is responsible for frequency management. Despite some interest in creating one, there is currently no association of independent telecommunications operators, although the Confederation of Azeri Entrepreneurs has amongst its members some telecommunications operators.32

Price regulation There are several major issues for regulators in competitive marketplaces, including interconnection (the principle that any service provider should be

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able to connect with the network of any other service provider) and price regulation. The latter, price regulation, is an issue for regulators in a monopolistic as well as competitive market, and will be the focus of this section.33 There are several ways of regulating price, all of which are complicated and none of which can be implemented without causing some harm to consumers. Competition is largely considered to be the best substitute for any price regulation system; it is the quickest, cheapest and easiest way of achieving the two most desired objectives of high quality and low price. There are two types of competitive markets: the first is when a fair and balanced competition has taken place, with the result that there are several service providers in the market, all of which have had more or less equal and fair access to the network facilities and which have comparable numbers of customers. In this market structure, reasonable prices and high quality are secured by competition and there is no need for regulatory intervention. The second competitive market structure is the market with one service provider, an incumbent operator, which has a significant market share, constant control over access to essential facilities and a disproportionately high number of customers. In this case, the primary objective is to introduce full competition so that the market evolves into one which requires almost no regulation, like the first market structure described above. Full competition is considered the best means of achieving optimum customer service and the best network infrastructure.34 Tariffs are extremely unbalanced in all three countries of the South Caucasus. This is evidenced by low monthly fees for residential subscribers, relatively high ones for businesses, as well as extremely high international rates that may hamper international trade. This situation exposes the existence of massive cross-subsidies from long distance to local and from business to residential subscribers, which are not sustainable in a competitive environment. Tariff rebalancing and increases in line with costs are a necessary part of the overhaul of basic fixed-line services. In accordance with article 16 of the Law of the Republic of Armenia on Telecommunications, tariffs for telecommunications services must be approved by the Ministry of Transport and Communications, and should be stated in the licence granted for the implementation of activities in the telecommunications field. Tariffs should be set based on the costs of utilization, service delivery, the upgrading and replacement of antiquated equipment, the development of the telecommunications networks, the restitution of capital investments, a provision for profitability, as well as on other economic market requirements, which should also be stated in the licence. In accordance with the licence granted to ArmenTel CSC, the proposed tariffs for basic services should aim to: promote the effective utilization and expansion of the basic combined network; cover direct and indirect costs and provide for a stable rate of return in comparison to comparable telecommunications markets; be

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non-discriminatory towards the users of similar services; and avoid crosssubsidies for services. The licence defines the tariffs for basic services – local basic telephony services, basic in-country long-distance telephony services and basic international long-distance telephony services – which are agreed between the Armenian Ministry of Transport and ArmenTel. In accordance with a 1998 decision (No. 658 of the Government of the Republic of Armenia on the Order of Approval of Tariffs for the Telecommunications Services Provided by Exclusive Right), the draft tariffs for telecommunications services provided by exclusive right shall be proposed by the telecommunications operators. The proposed tariffs, and the calculations underpinning them, shall be presented to the Ministry of Transport and Communications of the Republic of Armenia at least sixty days prior to the date on which the proposed tariffs will enter into force. The Ministry shall consider the proposals presented and, should it disagree with the proposed tariffs, shall return them back to the telecommunications operators within one month to have them recalculated and finalized. The Ministry shall approve the tariffs after having them agreed with the Ministry of Finance and Economy (Clause 3 of Decision No. 658). In what is clearly an overdue move, under the Draft Law of the Republic of Armenia on Electronic Communication, the Commission on the Regulation of Basic Services shall regulate the tariffs set by the operators. The Commission is obliged to adopt rules regulating the equalization of tariffs: the tariffs shall be set strictly according to the kind of service being offered, may be expressed in any currency, though with the obligatory indication of the dram equivalent, shall be differentiated and separated from any costs relating to substructures or equipment, and shall be based only on the permissible costs relating to the basic electronic communication services provided at the request of the final consumers. In Georgia, before the creation of the National Telecommunications Commission, tariffs were set by the Ministry of Economy. These tariffs were mandatory for all companies, especially when the state owned 100 per cent of the stake. This was an unfavourable situation for the companies to be in, as far as generating profits was concerned: tariffs were set in advance for long periods of time, without taking into consideration changes that had been taking place. This also made competition in terms of price impossible. At present, the limited tariffs for the services of the communication networks are set by the National Telecommunications Commission and aim, among other things, to protect consumers against monopolistic prices and budget for licensees to receive a reasonable income from capital investments.

Conclusion In terms of liberalization and the effectiveness of regulators, the practices of the three South Caucasian countries vary. There is a growing consensus in

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the region, however, that certain aspects of globally accepted practice are the only way forward. This includes privatization, competition and the establishment of independent regulators with authority over, among other things, price. The Georgian experience shows that the telecommunications sector can perform well in the South Caucasus where laws are well designed and the implementation of the laws is carried out by an independent regulator and not the government of the day.

Notes 1. See T. Bruckner, ‘Telecom Grows Leaps and Bounds’, available at http:// www.amcham.ge/magazine/2004/june/6.htm. 2. See generally, R. W. Olufs III, Making of Telecommunications Policy (London: Lynne Rienner Publishers, 1999) and D. M. Lamberton, ed., Communication and Trade Essays in Honor of Meheroo Jussawalla (Cresskill: Hampton Press Inc, 1998). An examination of the process of policy-making, however, reveals that important decisions have often been based on factors other than economic considerations. See G. Wang, P. Chen and C. Liu, ‘Deregulating Telecommunications Services in Greater China: Political Shadow over Economic Decisions’, in Lamberton, ed., Communication and Trade Essays. 3. C. Fink, A. Mattoo and R. Rathindran, An Assessment of Telecommunications Reforms in Developing Countries, World Bank Policy Research Working Paper 2909, (Washington, DC: World Bank, 2002), p. 4. 4. B. Wellenius, Factors of Successful Reform in the Telecommunications Sector, World Bank Group, p. 1. Available at www.worldbank.org/mdf/mdf1/factors.htm. 5. H. Intven, J. Oliver and E. Sepulveda, Telecommunications Regulation Handbook (Washington, DC: World Bank, 2000), p. 23. 6. SIDA/Cornell Caspian Consulting, The South Caucasus: a Regional Overview and Conflict Assessment Overview (2002), pp. 1–2. 7. R. Mansell, The New Telecommunications: a Political Economy of Network Evolution (London: Sage Publications, 1993), p. 1. 8. World Bank Group, Regional Study on Telecommunications in the Caucasus, pp. 1–2. Available at http://lnweb18.worldbank.org/eca/eca.nsf/0/ 3b66d94159dfd968852568fc005d7716?OpenDocument. 9. Ibid. 10. ‘Money Laundering’, Aravot (20 February 2002), p. 2. 11. ‘Slap in the Face of ArmenTel’, Aravot (13 March 2002), p. 2. 12. ‘Bribery at ArmenTel’, Aravot (27 May 1998), p. 1; ‘The ArmenTel Case in the Chief Prosecutor’s Office’, Aravot (5 March 2002), p. 1. 13. RA, Information Service of the State Commission of the Republic of Armenia on Economic Competition, Assessment of the New Service of ArmenTel (16 March 2002), p. 2. 14. R. Arshakyan, ‘If It Is Not ArmenTel, It Is “D-z-z-z” ’, Aravot (22 August 2002), p. 4; ‘The Internet is Not the Monopoly of ArmenTel’, Aravot (26 September 2002), p. 3. 15. Republic of Armenia (4 August 1995), p. 2; N. Movsisyan, ‘Large Family’, Aravot (24 February 1998), p. 7; L. Ghazaryan, ‘The Telephone is Still Switched Off’, Aravot (8 October 1998), p. 7; G. Armenyan, ‘The Satanic Telephone’, Aravot

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16.

17. 18.

19. 20. 21. 22. 23.

24. 25. 26. 27. 28. 29. 30. 31. 32. 33.

34.

(10 October 1998), p. 5; S. Isahakyan, ‘Until the Minute??? Payment Introduction’, Aravot (5 December 2001), p. 4. Conclusion of the Interim Commission of the National Assembly; ‘Communication That Had Cut the Links’, Republic of Armenia (11 September 2002), pp. 1–3. It should be noted that other media publications cited an investment of US$35–40 million. G. Sardaryan, ‘What Does ArmenTel Think?’, Republic of Armenia (9 February 2000), p. 2. ArmenTel will, however, retain the exclusive rights to some services, such as Internet telephony and the use of fibreoptic cables. See ‘Armenians Get Mobile Phone Choice’, IWPR’s Caucasus Reporting Service (25 November 2004). Available at http://www.iwpr.net. Ibid. World Bank Group, supra note 8 at p. 5. Ibid. Ibid. A. Baudrier, Independent Regulation and Telecommunications Performance in Developing Countries, ISNIE Conference: Institutions and Governance, Berkeley, California, USA (2001), p. 2. Telecommunications Regulations: Institutional Structures and Responsibilities (Paris: OECD, 2000), pp. 8–9. L. S. Etheredge, ed., Politics in Wired Nations: Selected Papers of Ithiel de Sola Pool (New Brunswick, NJ: Transaction Books, 1998), pp. 351–6. Olufs, supra note 2 at pp. 2–3. W. Melody, ‘On the Meaning and Importance of Independence in Telecom Reform’, Telecommunications Policy, 21 (1997), pp. 195–9. Draft Law of the Republic of Armenia on Electronic Communication. Available at http://www.parliament.am/drafts.php2sel⫽onagenda&ang-arm. Article 7 of the Law on Communication and Post of Georgia. Ibid., article 22. Ibid., articles 8 and 20. Article 14 of the Law of Azerbaijan on Communication. For more on this see R. G. Noll, Telecommunications Reform in Developing Countries, Stanford Institute for Economic Policy Research Discussion Paper No. 99-31 (Stanford: 2000), pp. 32–7; and J. H. Rohlfs, ‘Regulating Telecommunications: Lessons from US Price Cap Experience’, Public Policy for the Private Sector, 65 ( January 1996), p. 1. J. J. Laffont, P. Rey and J.Tirole, ‘Network Competition’, The Rand Journal of Economics 29 (1) (1998), p. 1.

9 Linking Rule of Law and Environmental Policy Reform in Armenia and Georgia Allison Morrill Chatrchyan and Amanda E. Wooden

Introduction The environment has historically been an important cultural issue in the three countries of the South Caucasus. The land and its resources have played a critical role in defining these nations’ identities, in relation to one another and in light of constant invasion and colonialization at this continental crossroads of major powers. During the Gorbachev era of the late 1980s, the environment was a prominent issue in the unfolding politics of the Soviet Union’s breakdown, emerging nationalist expressions and eventual moves towards independence. In 1988, the Greens Union of Armenia was instrumental in organizing protests against continued operation of the Medzamor nuclear power plant and a demonstration of 150 000 people against operation of the polluting Nairit chemical plant, forcing the closure of both in 1989 and 1990 respectively.1 In Georgia, the environmental movement coalesced around a weapons-grade nuclear power plant in Mtskheta, just thirty miles outside of the capital, Tbilisi. This movement was effective in forcing the closure of the plant, and from these actions, the Georgian Green Party was formed. With independence from Moscow in 1991, and the move towards capitalist democracies, came the hope of an improved environment in the South Caucasus. Unfortunately, for the most part, the environment in these countries has not improved, and in some cases, has become further degraded. This chapter examines the state of environmental law and policy in the South Caucasus, focusing on changes in Armenian and Georgian environmental law and policy since independence from the Soviet Union in 1991. We ask several key questions: to what extent have Armenia and Georgia reformed their environmental laws, institutions and policies? Has the impact of the legal and institutional reforms been meaningful in practice – in essence, do we see improvements in environmental protection over the transition period or do we see stagnation or further degradation of the 144

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environment? What factors contribute to this improvement or decline in environmental protection in the South Caucasian countries? What do differences in environmental policy between these two countries tell us about the democratic transition process and what does democratic consolidation mean for effective policy-making? To answer these questions, we first lay out a theoretical framework of the relationship between democratic consolidation and environmental protection. We argue that countries with stagnating democratic transition processes (such as Armenia) have less will to protect the environment than countries that are consolidating democratically, and less political capacity than either fully democratic or authoritarian regimes to implement effective environmental policies. Once these ‘hybrid regimes’ or ‘false-front democracies’ begin to consolidate the elements of democratic society substantively, as is beginning to occur in Georgia due to recent major political changes in 2003, we would expect their environmental protection efforts to improve. The next section will discuss the relevant literature and theoretical underpinnings of the chapter. We then discuss the general political environment and institutional structures in Armenia and Georgia, and the changes in environmental laws, bureaucracies and civil society in each country, with a detailed focus on the water and forestry sectors. Finally, we evaluate the relative impacts of these political and institutional characteristics on the effectiveness of environmental protection, testing our theoretical hypotheses.

Political will and capacity to protect the environment in democratizing countries The debate about the environment and political change has focused on the issue of whether or not it is better protected under a democratic or authoritarian regime. Early scholars posited that democracies, which emphasize individual rights, were inherently incapable of preventing environmental degradation. They argued that strong, albeit enlightened, authoritarian governments were required to protect the environment. Other scholars challenged these assumptions and argued that democracies were better protective of the environment due to greater openness and free flowing information, interaction with civil society forces, responsiveness to the electorate, international cooperation, and forces of the market economy. The end of the Cold War exposed the extent of environmental destruction in former authoritarian countries, and scholars and development practitioners have since championed the virtues of democracy as a means to better protect the environment.2 However, a focus on the authoritarian–democratic dichotomy alone ignores the important elements of the continuum of governance forms in the real world, from authoritarianism to full democracy, including the varied forms of governance of ‘hybrid regimes’ that exist between the ends of the spectrum.3 It also ignores important aspects of the political and policy

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process; that is, the political will that is necessary in any system of governance for effective environmental policy-making to take place, as well as the political capacity to implement reform. Both are necessary in order to provide for effective environmental protection. Authoritarian regimes may have strong capacity for environmental protection, if political will exists. Consolidated democracies may have strong capacity, yet the greater openness of the political process and space for competing interests may also hinder capacity by slowing down the decisionmaking process and implementation of environmental protection measures, as opposed to a top-down authoritarian political structure which can make decisions quickly.4 However, where political will to protect the environment is lacking in democracies, greater responsiveness to the electorate and civil society can provide the impetus and pressure for change, an element missing in authoritarian nations. The really interesting phenomena, however, exist in hybrid regimes in the middle zone between authoritarian regimes and consolidated democracies, which may have neither the political will, nor the capacity, to implement effective environmental policy.5 According to Carothers, Hybrid regimes have some attributes of democratic political life … Yet they suffer from serious democratic deficits, often including poor representation of citizens’ interests, low levels of political participation beyond voting, frequent abuse of the law by government officials, elections of uncertain legitimacy, very low levels of public confidence in state institutions and persistently poor institutional performance by the state.6 These hybrid regimes, which represent the great majority of the 100 countries in the ‘third-wave of democratization’, may be some of the weakest regarding environmental protection. In light of the great number of hybrid regimes in the world and the intensification of global environmental problems, it is important to examine further how shallow democratization affects environmental protection and discern ways to improve management given limited democratic governance. In identifying how changes in regime affect environmental management, it may be easier to identify what factors are most important for effective policy-making. The variations within regime types in the ‘middle zone’ between authoritarianism and democracy may indicate to us what these changes in political institutions will produce in terms of environmental outcomes.

Consolidating democracy and implementing environmental protection A major research agenda in comparative politics since the 1970s has addressed the breakdown of authoritarian regimes, the conditions and steps

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that could be followed to reach democracy, how institutions could be crafted, and how democracies could become consolidated. An important work by Linz and Stepan developed a theoretical framework to understand the process of democratic consolidation, based on the argument that democracies need to have five major interrelated spheres firmly in place in order for consolidation to occur, including: (1) rule of law; (2) bureaucratic state structures; (3) civil society; (4) political society; and (5) economic society.7 Linz and Stepan’s framework disaggregates democracy into its constituent elements and is valuable for examining how each element changes during democratic transition and consolidation, and how the process affects policy outcomes, including environmental protection efforts. The first three aspects – rule of law, bureaucratic state structures and civil society – are analysed in this chapter for each country, and the fourth and fifth aspects, political and economic society, are combined and dealt with in the general background sections for both countries. Linz and Stepan argue that if all of these elements of society are in place, a democracy can be considered consolidated. But they also assert that ‘democracy is more than a regime; it is an interacting system’ and ‘No single arena in such a system can function properly without some support from one, or often all, of the other arenas.’8 From this standpoint, there is a need to examine how environmental policy outcomes are affected when all of the elements of democratic society are not consolidated, as in the hybrid, transitional countries of the South Caucasus. It is important to understand what consolidation in a particular sphere, but not others, means for the process of democratization and environmental policy effectiveness. Given the need for all of these elements of democracy to function together, the specific institutional characteristics which link them are especially important. How do we determine which is the most important sphere for instigating environmental policy reform? Which specific institutional characteristic linking these spheres is most relevant for effective environmental policy reform in transitional countries? Keohane and Levy’s work on environmental institutions and aid provides insight to these questions, especially regarding situations where international actors play an influential role in attempting to assist state actors in environmental decision-making, as they do in Georgia and Armenia.9 They develop an analytical framework for understanding and evaluating international actors’ and national actors’ effectiveness in creating and implementing environmental aid. This framework focuses on three characteristics of institutions for environmental aid, termed the ‘Three C’s’: (1) Concern, (2) Contracting, and (3) Capacity.10 Wooden adds the fourth crucial national institutional characteristic: (4) Political Constraints, to Keohane and Levy’s analytical framework to better explain national level natural resource policymaking.11 This combined analytical framework can be referred to as the ‘Four C’s’ of political institutional characteristics – a set of informal and formal rules and governmental characteristics that determine changes in the

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Political and economic society

Rule of law

Contracting capacity concern/will constraints

Civil society

Bureaucratic state structures Figure 9.1 Theoretical framework of democratic consolidation and environmental policy-making institutional characteristics

environmental policy process and link the five broader Linz and Stepan aspects of democratic consolidation. The general spheres of democratic consolidation are linked together by the specific institutional elements of environmental policy-making, governmental contracting with international donors and organizations, political capacity to implement policy priorities, public concern and political will about environmental issues, and the political constraints that limit the misuse of natural resources.12 Figure 9.1, the graphic representation of the theoretical framework for this chapter, demonstrates this interaction between these specific environmental policy institutional characteristics and the general spheres and processes of democratic consolidation. Our theoretical framework highlights the importance of the interaction between the institutions of democratic governance and the specific elements of environmental policy-making. We utilize this framework in comparing environmental policy reform in Armenia and Georgia to ascertain which elements are most crucial for effective policy change.

Environmental protection in two hybrid regimes: Armenia and Georgia An analysis of similarities and differences in environmental policy-making in Armenia and Georgia highlights the problem of focusing on the democracy–autocracy dichotomy as well as the need to study the specifics of democratization. We argue that shallow democracies such as Armenia and Georgia have lost some of the ‘benefits’ of the strong, centralized state to make and implement decisions to protect the environment – political capacity.13 At the same time, these countries have not deeply institutionalized the

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elements of advanced democracies, such as the freedom of association, freedom of information and the media, and rule of law (political constraints), which would allow for environmental improvements through increased pluralism, information sharing and environmental learning. Thus, concern for the environment, and political will to address such issues, is not likely to be high. Environmental protection in shallow democracies is then a consequence of the worst of both ends of the political spectrum; during the difficult transition period, the state and its capacity for environmental protection is weakened, while democratic elements of civil society remain too weak to counterbalance the state or provide non-state mechanisms for environmental protection. Furthermore, during the transition period, shallow democracies become increasingly open to contracting and cooperation with international actors, which can have mostly positive benefits in terms of funding of projects with the state and civil society organizations. This element of contracting is an important one for understanding the ways in which donors and other international actors can both augment political and financial capacity of a recipient government, yet also cause serious pitfalls in policy change. International organizations often drive the process, determine the agenda and the projects that will be funded, and import Western models of environmental protection that may not suit local traditions. Likewise, these projects may be based on assumptions that confuse the issue of capacity with the issue of will and interest in reforming. Finally, we argue that these institutional characteristics of political capacity and will are crucial factors in environmental policy-making that need to be differentiated. Environmental outcomes will be negatively affected when the capacity of the government and civil society is weak, or when there is limited political will to reform the rule of law and corrupt environmental practices. In this chapter, we assess our arguments about the impact of democratic stagnation, the differences between political will and capacity, the influence of international organizations, and the impact of democratization on environmental policy reform. In order to analyse these arguments, we test the democratization hypothesis that environmental protection should improve in hybrid regimes as the elements of democracy become more consolidated. This hypothesis points to the importance of transparency and openness of political-bureaucratic agencies and the strength and access of civil society to influence political will for environmental policy reform.14 Accordingly, we examine whether or not there is greater environmental reform and greater environmental protection outcomes in Georgia as compared to Armenia, due to greater relative democratization previously – especially regarding plurality of politics – and recent major political changes in Georgia in 2004 that have consolidated democracy’s hold in the country.

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Methodology, case studies, comparability and generalizability The methodology of the chapter is based on the in-depth study of environmental policy in Armenia and Georgia, from 1991 to the present time. We track the change in policy and management of two key national environmental issues: (1) water resources and (2) forestry resources. There are a number of important structural influences on water and forestry policy in these two South Caucasian countries that provide a similar setting. Comparison is possible given similarity in Russian and Soviet colonial influences, post-Soviet economic decline, political instability, and late-Soviet to early post-Soviet armed conflict. Both Armenia and Georgia share the impact of these factors on natural resource management, especially given the reduction of available and affordable energy sources. These two nations are also the largest recipients in the former Soviet Union of international aid per capita (especially from the United States), which impacts environmental policy-making, both beneficially and negatively.15 The lessons of Armenia and Georgia’s struggles with democratization and environmental protection provide a lens through which we can understand the adaptation of other post-communist countries, and democratizing countries in general, with similar political regimes. Certainly, the environmental policy phenomenon of increased degradation seen during transition-era Armenia and Georgia can also be seen in other hybrid post-communist countries, from the lack of effective policy-making in dealing with the Aral Sea catastrophe in Central Asia to sidelining of environmental protection in Russia through Putin’s abolishment of the Russian State Committee for Ecology in 2000. The next section will provide the general political society setting in Georgia and Armenia in order to clarify the variations in democratization between the two. Following this section, we will examine the changes in management of environmental issues in Armenia and Georgia (particularly forestry and water resources) over the last decade, applying the interactive framework of the elements of democratic consolidation and the ‘Four C’s.’ State of democratization in Armenia and Georgia The Republics of Armenia and Georgia (before 2004) have been described as shallow or ‘false-front democracies’, where democracy remains unconsolidated due to the weakness of the state, legislature and political party system, and because of tainted elections, weakness of the rule of law, and the demoralized and demobilized civil society.16 According to Fairbanks, false-front democracies claim to be democratizing, but have not made substantive steps along the democratic consolidation continuum.17 Both Armenia and Georgia have a low to medium level of democratic consolidation, rated ‘partly-free’ by Freedom House in its reports from 1997 to 2004. However, in the most recent Freedom House Nations in Transit

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Report, while Armenia’s overall democracy score fell and it slipped to a ‘Semi-Consolidated Authoritarian Regime’, along with Azerbaijan, Georgia is still categorized as a ‘Transitional Government or Hybrid Regime’.18 Recent major political changes in Georgia (the forced resignation of President Shevardnadze following a fraudulent election by the opposition-led popular ‘Rose Revolution’) are reflected in optimistic evaluations of this nation as moving further along the continuum in the direction of democratic consolidation. The democratic transitions in both Armenia and Georgia that began with independence from the Soviet Union in late 1991 have certainly been affected by ongoing conflict and a series of political crises.19 The consolidation of democracy in both Armenia and Georgia has also been difficult due to a series of institutional choices that have tended to accumulate power in the executive and weaken the power of other branches of government. Like Russia, Armenia adopted a semi-presidential system upon independence, consisting of a head of state, elected by popular vote, who shares executive power with a prime minister, who heads the government and is the leader of the largest party in the Parliament.20 Armenia’s political institutional choices have had a negative effect on the country’s prospects for deepening democratic governance, and produced a situation where ‘elected authorities have no real authority to govern and do not advance alternatives that will improve governance or the situation of the populace’, a situation similar to current-day Russia.21 While Georgia’s system has included a strong legislative branch, recent steps have been taken by the new reformist government in Georgia to consolidate power and reformulate the bureaucracy, through constitutional amendments passed by the holdover Parliament in February 2004. While the popular power change and more democratic elections, as well as the reformist agenda of the new administration, are all harbingers of progression and moves towards democratic consolidation in Georgia, the further strengthening of the executive over other branches (in amendments to the Constitution passed in February 2004) as well as the current dominance of an essentially one-party coalition could prove problematic.22 As a result of these amendments, the political system came to reflect more closely the semi-presidential system of Armenia. The post of prime minister was created, to which President Mikhail Saakashvili appointed the late former speaker of Parliament, founder of the Green Party, and ally in the Rose Revolution, Zurab Zhvania. Yet this post is not independent from the President, and the independence of Parliament, which can be abolished more easily, is also reduced. The political party system in Armenia and Georgia remains weakly institutionalized. As of 2001, there were nearly 100 political parties registered in Armenia, but only a dozen play an active role in the political life of the country, and only six exceeded the 5 per cent threshold required to win

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parliamentary representation.23 There is also a tendency to form ruling party cliques and harass opposition parties (as in the case of the banning and persecution of opposition political parties, including the Dashnak party, from 1994–8 by President Ter-Petrossian). In Georgia, the political party system is now essentially dominated by a one-party coalition (the National Movement and New Democrats, opposition leaders of the ‘Rose Revolution’).24 Only one opposition bloc, the Rightist Opposition – combining the New Rights and Industry Will Save Georgia parties – managed to achieve the 7 per cent threshold of votes in the March 2004 irregular partial parliamentary elections for proportional seats. Emerging differences between Georgia and Armenia are highlighted by the most recent elections, levels of media independence, and plurality of politics in general. The popular reaction in Georgia to insufficient democratic reforms centred on a series of fraudulent elections, culminating in the ousting of Shevardnadze following the November 2003 parliamentary elections. Georgia’s most recent elections were a considerable improvement on previous elections.25 Yet political competition was minimal to non-existent in both elections, thus indicating that future elections should test more clearly how democratic elections have become. The recent presidential and parliamentary elections in Armenia again fell short of international standards for democratic elections, resulting in a decline in Armenia’s 2004 rating for free and fair electoral processes.26 The leader of the People’s Party, Stepan Demirchian, lost against the Republican Party’s Robert Kocharian in the second round of the March 2003 presidential elections by a margin of 67.5 per cent to 32.5 per cent. With the May 2003 parliamentary elections, a new ruling coalition of the Republican party and other pro-presidential parties retained a majority in Parliament, together maintaining more power than the most powerful opposition party, Justice. There were serious irregularities noted in both the presidential and parliamentary elections in terms of the voting and counting and tabulation of votes, including widespread ballot box stuffing.27 While civil society in general in Armenia remained weak, there were recent examples of its growing capability to influence policy-making.28 However, freedom of the independent media suffered numerous setbacks in 2003, where independent broadcasters failed to regain their broadcast frequencies, and incidences of violence and intimidation against journalists were reported.29 The independence of the press is an aspect of civil society that distinguishes Georgia to a great extent from both Armenia and Azerbaijan.30 This reflects what Jones describes as the important steps taken in the mid to late 1990s in Georgia to pluralize society, allowing for greater press freedom, support and coordination with non-governmental institutions, and existence of a healthy political opposition.31 Georgia has a greater degree of pluralism of politics than other states in the region, yet it is this pluralism coupled with de-statism (or rather plurality

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because of de-statism) that causes serious problems for the country.32 The new Saakashvili regime will be measured by the degree to which it can ‘re-state’ the country – build up its political capacity.33 As Chapter 1 has shown, pervasive and rampant corruption remains one of the most problematic aspects of political and economic life in both Georgia and Armenia.34 Yet there are interesting differences between the type of corruption in each country, with more ‘anarchic’ corruption in Georgia that is beyond state control, and more state-centred corruption in Armenia. This difference may demonstrate variation in state capacity, with Armenia more able to implement the laws that it sees fit to implement, and the Georgian leadership less able to implement laws where there is a high degree of corruption, as in the sector of natural resource policy-making.35 Overall, despite hopes for a progressing democratization process in Armenia, especially among the politically powerful Armenian diaspora, certain issues remain highly problematic, including limitations to free and fair elections, freedom of the independent media, power of civil society organizations in the political process, weakness of the rule of law and high levels of corruption in the country. Political changes in Georgia from 1995 onwards were markedly more democratic leaning than other Caucasus and Central Asian nations. Yet problems of economic decline, inability to resolve territorial integrity issues, rampant corruption, limited political capacity, and lack of will to reform continued and led to decreased support for the Shevardnadze regime. There is now cautious optimism that the new Saakashvili administration will improve rule of law in a concerted reform drive and general political will to democratize, with early steps taken in a variety of sectors, including addressing corruption in the police force and balancing development interests with some environmental concerns. Yet other steps taken by the administration, such as slowness in the pace of dealing with corruption, have led to some healthy pessimism about the ability of this new administration to use its much greater political will to improve what is lacking in state capacity. Environmental transition in Armenia: degradation of Lake Sevan and forestry resources Lake Sevan, regarded as the jewel of Armenia, has a catchment basin that represents one-sixth of the territory of Armenia.36 Sevan was thoroughly degraded during the Soviet rule of Armenia, when its waters were used for hydropower to fuel the industrialization and to irrigate fertile agricultural lands in the Ararat Valley. Over the period from 1930–79, overuse of the water from Lake Sevan led to a drop in the water level by 19 metres (about 55 feet), and a decrease in volume of 44 per cent.37 Armenia is a mountainous country, which in ancient times was richly forested, with estimates of 35–40 per cent forest cover in the first millennium BC.38 Unfortunately, due mostly to human activity, the forest cover of

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Armenia has declined dramatically. According to the last registration in 1993, forests covered only about 11 per cent of the total territory of Armenia.39 Unlike the management of Lake Sevan, state forests in Armenia were quite well protected during the Soviet period, more so than in other Soviet republics. The Soviet Armenian government also implemented extensive reforestation and aforestation programmes in the country.40 Unfortunately, the condition of both Lake Sevan and forest ecosystems deteriorated during the 1990s upon independence from the Soviet Union. Despite high hopes that Lake Sevan would be better protected and restored under a newly democratic regime, degradation of the lake actually accelerated during the early transition period. And for the first time in decades, the forests of Armenia were being stripped of trees. During the early transition period from 1992–4, the degradation of Lake Sevan and forests was primarily caused by the severe energy and economic crisis in the country, when there were limited fuel supplies and almost no electricity supplied to industry or the population.41 As a result of the crisis, the government was forced to rely heavily on the outflow of waters from Lake Sevan to fuel the Sevan–Hrazdan hydropower cascade, and the lake’s water level and quality continued to decline. For most of the 1990s through to the present time, the water level of the lake continued to drop to an all-time low of almost 21 metres below its natural state.42 The decreased water level has contributed to increased eutrophication of the lake, while uncontrolled point source and non-point source pollution continues to degrade the water quality. The crisis was equally or more devastating to forestry resources, since the population was forced to clear-cut trees in public areas to provide firewood for cooking and heating homes during the cold winters from 1992–4. It has been estimated that illegal cutting averaged 600 000 m3 per year and the forest cover of the nation declined by at least 10 per cent during the energy crisis years from 1992–4.43 In addition, state reforestation projects came to a halt.44 Starting in 1995 after the worst crisis years were over, and as the democratizing government was again able to address less urgent needs of the population, there should have been improvements in protection of Lake Sevan and Armenian forests. With the reopening of the Medzamor nuclear power plant in 1995, there was less demand for hydropower and the huge outflows from the lake were cut back. However, the water level and quality of the lake have continued to decline throughout the 1990s, and there has been a failure to rehabilitate the lake. This continued decline in the water level has been caused by reliance on Lake Sevan’s water for hydropower production up until 1999 (when a ban went into effect), further reliance on the cascade to irrigate agricultural fields of the Hrazdan Valley (and the inefficiency of the irrigation system)45 and small-scale illegal withdrawals of water.46 Despite the end of the energy crisis, deforestation has continued unabated throughout the transition period. Corrupt networks for the illegal extraction

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of timber were established, and much of the impoverished population in Armenia has continued to rely on illegal timber extraction for firewood, which remains less expensive than electricity and gas for heating and cooking. It is estimated that the annual damage to the state forests amounts to 15 000 hectares, and annual loss of wood amounts to 13 000 m3, or 2.9 per cent of annual growth. The rate of forest rehabilitation is very low, at least ten times less than the pre-independence level.47 Since the degradation of Lake Sevan and forestry resources has continued past the economic and energy crisis of the early transition period, there is a need to look at the development of laws and legal institutions, reform of administrative agencies, and strengthening of civil society for explanations. Armenian environmental rule of law Following independence from the Soviet Union, there was a flurry of environmental law writing and an impressive number of new Armenian environmental laws were passed by Parliament since 1991. These include a Forest Code (1994), a Law on Lake Sevan (2001) and roughly a dozen other pieces of legislation. However, most of these new environmental laws were based on the old laws of the former Soviet Union, which were formulated for an entirely different socioeconomic system.48 Many of the laws passed in the early independence period can be seen simply as ‘declarations of intent’, since they often lack clear legal definitions, and fail to provide proper incentives or controls over polluting entities or to clarify enforcement mechanisms and implementing responsibilities.49 A further problem is that most of the regulations or mechanisms to implement these new laws have not been updated, so the regulatory agencies are relying on very old and outdated Soviet regulations.50 While the Soviet environmental laws were often based on very strict standards, it is becoming increasingly difficult to implement and enforce the laws due to lack of political will and capacity in the implementing agencies.51 Several problematic features of environmental law in Armenia have to do with the failure of the National Environmental Action Plan (NEAP) to provide an overall framework for environmental law or policy-making,52 the failure of the Republic’s Constitution to provide for the right of an individual to enjoy a favourable environment,53 the increasing use of ‘soft law’ through presidential decrees over ‘hard law’, the lack of transparency and sharing of information,54 and the weakness of the judicial system in general.55 The court system has yet to play an active role in environmental protection in Armenia. Although several environmental NGOs have filed lawsuits against the government and polluters/extractors, an important action, the outcome of these lawsuits has been poor. For example, Armenian environmental NGOs such as the Environmental Public Advocacy Centre (EPAC) and the Association of Investigative Journalists have filed lawsuits demanding public information about pollution from plants, and to stop the deforestation of

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public city parks in Yerevan, with little success.56 Finally, it should be noted that corruption affects all levels of the government’s enforcement apparatus, so the latter does not stand as a real alternative to courts.57 The Armenian government and international community focused a great deal of attention on the degradation of Lake Sevan during the early transition period, since the issue was a well-known and well-understood problem from the late 1980s. As a result of contracting between the World Bank and Armenian government, the Lake Sevan Action Plan was finalized in 1998, and the government and international organizations began to implement recommendations to reform both the legal and institutional structures in the water sector. With significant involvement of international organizations and consulting firms, a new law specific to Lake Sevan was passed in 2001, and a new, entirely Western-style water law was passed in 2002. A critical improvement is that the new water code specifies both environmental and economic values of water, and ends the practice of a free water supply by putting in place a tariff system for water consumers.58 It remains to be seen, however, whether the administrative agencies will have the political will or capacity to implement these comprehensive and detailed water laws, which are entirely different from the Armenian tradition of free water use. In the forestry sector, the critical issue of deforestation did not get on to the international agenda and there was less contracting with the Armenian government until much later, in 2000 and 2001.59 The issue of deforestation involved a much greater degree of corruption of state agencies at all levels. Top politicians own timber processing plants and top administrators receive kickbacks for covering over the extent of deforestation taking place by the government’s own forestry agency.60 Obviously, corrupt networks between the government and private interests, and the lack of rule of law, affected political will to change. However, as the grave extent of deforestation became known, the World Bank also took a multi-pronged project to address the issue through the Natural Resources Management and Poverty Reduction Project, and there will likely be a similar pattern of rewriting the forestry law and altering forest institutions as in the water sector. Armenian environmental administration The creation and implementation of environmental laws and policies is in large part determined by the political will of the government and capacity of bureaucratic agencies to carry out their mandate. In democratizing Armenia, the principal agency responsible for environmental protection (primarily pollution control) since 1991 has been the Ministry of Nature Protection (MNP), a carryover from the State Committee of Environment of the Armenian SSR created in 1986.61 However, like in the Soviet Union, the MNP has had to share its environmental protection mandate with numerous other departments and agencies, creating a confusing web of bureaucratic agencies and overlapping responsibilities.

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On a basic level, environmental protection in transitional Armenia has been hindered by both a lack of political will and capacity. The lack of political will to reform environmental policies can be seen in the government’s failure to appoint ministers educated and experienced in environmental issues to lead the MNP, or to allocate appropriate levels of funding for the Ministry. The President has often appointed officials with little training or experience with the environment, who have enacted detrimental environmental policies, and had a ‘squander and run’ attitude.62 The official operating budget of the MNP has fallen dramatically from funding levels during the Soviet period, and is much lower than other government ministries.63 This low budget has negatively affected the capacity of the organization and meant that the work of the main MNP is carried out by a staff of approximately 110 people as of 2000. There has been only a small budget to undertake projects, maintain facilities, or purchase and maintain modern office equipment. The MNP has also been hindered by low government salaries (approximately $40 per month, often paid sporadically) and few benefits or incentives to help recruit younger, welleducated personnel. The lack of funding has been somewhat compensated by the influx of international aid to implement international environmental projects, but these contractual arrangements are largely determined by the international agenda and do not necessarily reflect Armenian priorities. In the case of water protection, the MNP’s Water Protection Department, with a staff of six people, shared responsibility with three other departments and at least five other government agencies throughout most of the transition period. Compared to the powerful Ministries of Energy and Agriculture, the MNP was the weakest agency and had little power to limit the use of Lake Sevan’s waters for hydroelectric power or irrigation. In the case of forest protection, the Armenian forestry agency (Hayantar) was a direct carryover from its Soviet predecessor. Upon independence, the Armenian government inherited one agency that was in charge of both forest use (timber extraction), and protection and reforestation, with no checks and balances in the system. Hayantar’s status was also weakened when the formerly independent industry association was put under the jurisdiction of the Ministry of Agriculture, and then the MNP.64 In 1995, Hayantar’s status was changed to a joint stock company under the Ministry, implying its motivation should be a for-profit agency in charge of using the state forests, not protecting them. In January 2004, Hayantar was withdrawn from the MNP and placed under the jurisdiction of the Ministry of Agriculture, despite protests from environmental organizations that this would lead to less protection of forests. Without pressure from civil society or international organizations to reform these institutional structures, few reforms to the forest management agencies have been carried out to date.

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In the water sector, international organizations were involved earlier on, and began to pressure the Armenian government in the mid to late 1990s to make changes to institutional processes.65 Following recommendations in the World Bank-funded Lake Sevan Action Plan, a new Lake Sevan Commission was formed in 2001 to review all government or industry proposals affecting the lake before they proceed, although many believe the Commission has been co-opted by pro-energy and irrigation interests. As a result of World Bank and USAID water resource management projects, international organizations put increasing pressure on the government to adopt new water institutions instead of trying to work to build the capacity of the MNP’s Water Resource Protection Department.66 A new Committee on Water Economy was created in 2001, followed later by a new Water Resource Management Agency in 2002. It remains to be seen if these agencies will be able to implement the complicated new water law passed in 2002 and begin to improve the protection of water resources, including Lake Sevan. Although there has been a delay in international organizations’ involvement in the forestry sector, there will likely be a similar pressure put on the government to reform state administrative agencies in charge of forestry management in the future.67 Armenian environmental civil society As we have seen in the above discussion, the political will of the state and its capacity for environmental protection were weakened during the difficult transition period in Armenia, while independent environmental civil society was being strengthened. Armenia also became increasingly open to cooperation with international organizations, which had mostly positive benefits in terms of learning and funding for the state and civil society organizations to carry out projects. One critical feature of Soviet environmental politics in Armenia was the strong pre-independence environmental movement that existed from the late 1980s, led by NGOs such as the Greens Union of Armenia. This Soviet Armenian environmental movement was instrumental in closing down the Medzamor nuclear power plant and several polluting factories, and was one of the key actors in the Armenian independence movement.68 With the cold realities of independence, these same polluting industries and the nuclear power plant took on a different significance, in supporting the independent state, and the environmental movement lost much of the early ground it had gained.69 The power of the pre-independence environmental movement declined due to several factors. First, Armenian society has been unable to support civil society organizations financially due to the severe economic difficulties in the newly independent Republic, where the main focus of the people has been on their sheer survival. In addition, many of the leaders of the early environmental movement were tapped by political society to become

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government officials, and this left civil society organizations weakened.70 Finally, the pre-independence environmental movement has had a difficult time making the transition from an oppositional movement to a strong NGO sector, which is autonomous from the government but an advocate for the environment. Armenian NGOs have often painted a drastic, all-ornothing approach to environmental protection in order to gain attention and funding, while less drastic/more realistic alternatives may be available. As a result, society and the government have viewed NGOs as novices that are too extreme and unrealistic, and shut them out of the process.71 Following 1991, international contracting agencies such as the US Agency for International Development (USAID), and diaspora organizations such as the Armenian Assembly of America began programmes to strengthen democracy and civil society by building the capacity of local NGOs operating in Armenia. With the influx of international support, and the loss of other employment opportunities, many new NGOs were formed in Armenia, to the point where there were officially 1700 registered NGOs in the country in 2000.72 There are only about a dozen viable NGOs in the environmental field, which have been supported by ongoing international grants or distinct projects.73 There is little long-term international funding for the NGOs themselves since funding is usually given on a project basis, which leads to an ad hoc approach to environmental protection and non-sustainability of projects once they are completed. It has also caused a lack of stability for the NGOs, making it harder to recruit and maintain trained personnel.74 One downside of this foreign assistance is that the NGO agenda is primarily driven by international, not national, priorities. NGOs are simply implementing the mandates from foreign governments and their tactics may be at odds with national priorities. However, international efforts to build the capacity of Armenian NGOs have had a positive effect which can be analysed in terms of their influence in a number of spheres. For example, the Greens Union of Armenia was active early on in the transition period in proposing and writing the new forestry code enacted in 1994.75 Armenian NGOs have continued to work to influence public opinion about environmental issues, and raise public awareness of key issues such as deforestation, which has increased since the late 1990s due to greater media attention. The main constraint to the effectiveness of civil society in the environmental sphere is the lack of NGO influence and access to government officials to affect the policy-making process. One positive advance in formalizing the relationship between administrative agencies and NGOs is through Armenia’s ratification of the Aarhus Convention (Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters) in 1998. Following its ratification of the Convention, Armenian NGOs and international organizations have pushed

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the government to live up to commitments to greater openness and access to policy-making, although this has yet to become a reality as can be seen in the cases of Lake Sevan and forestry management. There was little NGO action to address either the degradation of Lake Sevan or deforestation in the early transition period, since pre-independence environmental NGOs were regrouping during the crisis years and new ones were just being formed. Things changed in the mid-1990s, however, with the influx of international support to strengthen the NGO sector. Despite this influx of aid, NGO action on Lake Sevan has been limited to small-scale clean-up programmes, awareness raising, and participation in conferences and steering projects. This lack of activity is not due to a lack of awareness or interest in this critical national environmental issue, but rather a lack of long-term institutional support of NGOs by the international aid organizations that would allow them to carry out projects, and lack of influence in the powerful circles that influence policy decisions about the lake.76 In the forestry sector, there has been a greater degree of small-scale NGO activity, and Armenian NGOs such as Tapan EcoClub have organized treeplanting, clean-ups and annual ‘March for Park’ events activities.77 An Armenian American diaspora-funded NGO, the Armenian Tree Project (ATP) was formed in 1994 to carry out small-scale community reforestation, coppicing, and nursery and fruit drying projects.78 However, ATP’s small-scale community projects have done little to curtail large-scale deforestation taking place in state forests through the corrupt black market for illegal timber. The ATP has not engaged the government in trying to improve their institutional or legal framework to end illegal timber extraction until very recently, instead focusing on working around broken government institutions.79 However, the cumulative build-up of NGO activity to end the deforestation of green spaces and state forests, and increasing coverage of deforestation by independent media and attention by international aid organizations, seems to be having an effect on raising awareness and will hopefully bring increased pressure on the government to reform its policies in the future.80 Despite recent improvements, the civil society sphere has not yet been sufficiently developed to counterbalance the state or provide sufficient non-state mechanisms for environmental protection. Environmental NGO activities have been limited to working around the edges of both the Lake Sevan and deforestation issues, making minor contributions to environmental protection through small-scale projects. One cause for hope is that international aid organizations such as USAID and the World Bank have begun to address some of the root causes of the continued degradation of Lake Sevan and deforestation, namely the deteriorating irrigation systems that require inefficient use of the lake’s waters, and the continued reliance of the population on timber for firewood. For these projects to be effective in the long run, there will need to be continued reform of environmental laws

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that are in line with national traditions, and continued pressure on the government to reform environmental institutions and agencies. Environmental transition in Georgia: water and forestry linked by energy policy Georgia is a heavily forested country, yet there are competing figures of forest coverage and the extent of deforestation. The official figures range from 38–39.9 per cent by 2008 (Georgia National Assessment) while NGO figures are closer to 32 per cent.81 Much of the forested areas are inaccessible and located on steep slopes, which then contributes to soil erosion and harvesting difficulties. Some of these forest resources were heavily taxed in the Soviet era, but many were managed for protection.82 Deforestation has certainly become an important issue in the last decade in Georgia, given the decline in available energy sources, the economic crisis, and a number of territorial conflicts and civil war and thus political instability. Import and export balances have also contributed to the rapid change and extent of deforestation. Whereas Russian wood imports previously dominated, Turkey and Russia have become major markets for exported Georgian forest products, often through illegal deforestation.83 This rapid deforestation has in turn led to serious problems of soil erosion and landslides, further contributing to water quality problems.84 There is a popular suspicion that illegal logging is happening on a massive scale and that ‘the majority of timber has simply been exported to Turkey, Armenia and Azerbaijan as the nation’s cheapest product’.85 Illegal logging by individuals and enterprises ‘has increased to a threatening rate’ and the extent is ‘undoubtedly very high’, yet there are no reliable data as to the exact amount or rate.86 The World Bank has indicated that the perception of high levels of illegal logging is inaccurate, and that only about 6 per cent of the total estimated harvest is illegal. They note that the fuelwood harvest is the most serious threat.87 Overall, it is clear that rapid deforestation is occurring, that illegal deforestation is a problem, and that imprecise data collection hampers a clearer understanding of what is happening in the forestry sector. Georgia has a vast network of rivers, lakes and wetlands, and is considerably more water wealthy than Armenia in this regard.88 The distribution of water resources is an issue as the majority of freshwater resources are located in western Georgia and the dominant irrigated agricultural areas and heavily populated areas are in the east. Yet overall, water quality is certainly the larger issue, as is municipal supply infrastructure. Hydroelectricity and its importance for energy supply in the country is also an issue relevant to a discussion of water resources; approximately 80–89 per cent of electricity in Georgia comes from hydroelectric power plants.89 Hydroelectric dams are not the only linkage between energy and water quality issues, but also the impact of high energy costs on municipalities’ waste-water and drinking

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water treatment systems management. Groundwater is also important to the discussion of water policy, as 90 per cent of municipal water supplies are groundwater.90 Finally, other important water resources include the transboundary water of the Black Sea and Kura River basin, and wetlands of environmental importance like the Kolkheti wetlands in western Georgia. Waste-water management and drinking water treatment are the most problematic aspects of water policy in Georgia. The impacts of these problems include serious industrial pollution (predominantly from food processing, but also mining and some other industrial outputs), disease outbreaks, and interruptions in supply. During the Soviet era, while municipal water treatment was maintained better than it is today, there were serious problems of pollution, with discharges directly to river basins and more severe industrial pollution with higher levels of industrial activity and poorly enforced standards.91 Georgian environmental rule of law Environmental policy was not of major concern in the early post-Soviet period given the political crises of three wars and the ousting of the first President Zviad Gamsakhurdia, but it was an issue that still resonated with the public given the late-Soviet period nationalistic concern with Soviet environmental degradation in the Republic. During this early post-Soviet period, the Green Party, following their establishment and successes surrounding the Mskheta mobilization event, gained a number of seats in Parliament. In 1995, a new Constitution was written which included important provisions on environmental protection, including a direct reference to sustainable development in discussing the importance of environmental protection for future generations.92 It also refers to an active role of government in environmental protection, which differs from most former Soviet constitutions, including Azerbaijan’s and Armenia’s, which include simply the substantive right to a healthy environment.93 As is typical in many countries of the former Soviet Union, the first and most important problem with environmental legislation in Georgia is that it contains weak to no enforcement mechanisms and thus is not implemented. Unlike many of the countries of Central Asia, in Georgia ‘the environmentrelated legislation is comprehensive, but, in many instances, it lacks the necessary implementation mechanisms. Among the most important are regulations that clearly translate framework provisions of laws into competenc[i]es, functions, obligations, practical measures, and procedures.’94 For water policy, there are approximately ten major laws affecting the sector, the primary one being the 1997 Law on Water, which was amended in 2000. While this law establishes the EU type of polluter-pays principle, it lacks specific guidelines, the key enforcement mechanism of water and pollutant permitting is extremely weak and does not feed back into funding

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for environmental agencies. The Forest Code, the most important forestry sector legislation, suffers from similar problems. Overlapping jurisdictions included in these pieces of legislation (as well as the related 1996 Law on Protected Areas System) is noted as the biggest problem with Georgian environmental legislation, according to the United Nations Economic Commission for Europe (UNECE), such that protected areas policy is faced with ‘lack of coordination and [an] intersectoral approach to biodiversity’.95 There was political will in the late 1990s to early 2000s to address some of the policies encouraging forestry product exports, including a draft law to ban timber exports, but this was vetoed by former President Shevardnadze. He later compromised with an export tax, but this was subsequently revoked.96 An important part of enforcement for these pieces of legislation regards environmental permitting, taxes and fines. These environmental taxes were introduced in several administrative resolutions and laws, beginning in 1993 and culminating in the Tax Code of 1998 and subsequent amendments to these laws.97 Permitting for pollutant and water discharges is discussed in the Water Code. There are several causes for this tax and permitting system not working, including: these revenues are not used for environmental protection; a fuel tax has been extended (further pressuring other energy resources such as wood for exploitation); monitoring is weak; the tax system is complex; there are severe data collection issues; separate decisions taken on permitting and problems with permitting procedures lead to inefficiency; and there is a separate system for facilities operating before 1999 and self-reporting by users is the basis of regulation.98 An additional problem with environmental legislation in Georgia is that the judiciary is very weak and environmental NGOs have little confidence in the courts. As a result few environmental laws find themselves tested in the court system, though NGOs are beginning to use this route. There has, for example, been litigation over the route of the Baku–Tbilisi–Ceyhan pipeline.99 The problem is one of serious pessimism for the viability of the judicial branch; as noted in several chapters, the court system in Georgia is seen as one of the most corrupt aspects of society.100 Other problems in the environmental legislative framework are an ‘incomprehensive legal framework currently in force’, incompatible legislation, irregular privatization and insufficient funding.101 These problems in environmental legislative framework are manifested by the weakness of agencies mandated to implement the laws. Georgian environmental administration Administrative agencies in Georgia have suffered from many of the same problems as state agencies in other former Soviet nations and those highlighted in Armenia. In particular, low levels of capacity – financial,

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experiential, etc. – the absence of enforcement mechanisms, overlapping responsibilities, problems of coordination, and lack of a comprehensive plan for sustainable development are the main problems facing Georgian agencies. However, the question of whether or not there is political will to address environmental protection is not as clear in Georgia as it is in Armenia. The political will to address environmental issues seems to be somewhat stronger in Georgia. Additionally, the reformist moves of the new Saakashvili administration underline the possibility of stronger political will to address environmental protection.102 However, it is crucial to keep in mind competing policy priorities, such as economic development, which could trump environmental policy concerns. The capacity and will of the Georgian government to address environmental policy can be more clearly understood by assessing the work of the Georgian Ministry of Environment and Natural Resource Protection (ENRP). An important problem is that there are a number of other institutions involved in environmental policy-making, which may often override ENRP decisions given the latter’s low policy prioritization.103 Overlapping responsibilities amongst these institutions leads to problems of coordination between agencies and ministries and insufficient cooperation between these governmental bodies at the central level and those at the local level.104 These problems of overlapping responsibilities and lack of coordination are exemplified by those agencies responsible for forestry and water policy. The main administrative body dealing with the forestry sector is the State Department of Forest Management, but the State Department for the Management of Protected Areas and the Mountain Forest Institute also have responsibilities over protected forest areas; often these responsibilities overlap with related ministries’ responsibilities. For example, the Ministry of Environment and the State Department of Forestry share responsibility for forestry policy in the Forest Code, yet the latter reports directly to the President, not to the Ministry of Environment.105 Along with overlapping responsibilities, there is the problem of coordination between levels of governance, as the ENRP and other agencies have decentralized regional administrative bodies. The regional bodies of the various agencies and state departments in the country play an important role legislating, implementing and enforcing environmental law and are responsible for permitting and standard violation monitoring. The problems include weak cooperation between the central authorities and local agencies, regional bodies’ lack of capacity, and overlapping and vague functional definitions and the inability to consistently conduct environmental inspections for suspected violations (the courts only granted orders for unannounced environmental inspections in four out of ten situations). Not surprisingly, compliance is low.106 Despite these problems, the Ministry of Environmental Protection has demonstrated on a number of occasions some political will to improve

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environmental policy through openness and access to environmental NGOs in writing legislation and enforcement of regulation, highlighted by the Baku–Tbilisi–Ceyhan pipeline controversy of 2002, which gained major media coverage in Georgia and international notoriety. Minister Nino Chkobadze announced her Ministry’s agreement with the NGO criticisms of the BTC pipeline routing through Borjomi-Kharagauli National Park, as a violation of Georgian environmental law.107 An important coalition developed between environmental NGOs, communities affected by the pipeline route, and an important business, Georgian Mineral and Glass Company (which bottles Borjomi Mineral Water – Georgia’s largest export – from the mineral field that the pipeline traverses). At the heart of the controversy was the contract negotiated by the Georgian government with British Petroleum (which heads the Georgian International Oil Consortium – GIOC) and the Environmental and Social Impact Assessment (ESIA) process conducted by the government.108 By the end of the controversy, with pressure from President Shevardnadze, minister Chkobadze retreated from her earlier statements, due to political exigencies.109 Even more recently, the changes in the ministerial post in the wake of the regime change in Georgia led to a reassessment of the BTC Borjomi routing, and a temporary hold on the BTC pipeline section through Borjomi, presumably until all the Georgian environmental and social concerns about this pipeline section were addressed. This was an attempt either to more substantively address the environmental concerns about the pipeline or co-optation of this populist issue to appear as if such interest exists.110 It is still to be seen whether the new administration does continue to hold British Petroleum to its commitments for environmental safety and social benefits. Civil society actors have played an important role in maintaining accountability and are likely to strengthen that role in Georgia in the future. Lack of funding for environmental agencies is a continuing problem, even when will does exist to address major problems. The financial capacity of the Environmental Ministry is certainly limited, and as earlier, environmental taxes are not used to fund these agencies.111 For example, in the past five years, the budget of the State Department of Forestry has been cut more than fivefold.112 This undermines the capacity of these agencies, and raises questions regarding true will to address the serious environmental problems in the water and forestry sectors. In water policy, the system of permitting seems to be more complete and less problematic in terms of coordination and overlapping responsibilities than in the forestry sector, yet there still remain serious problems in enforcement of the legal and policy structures resulting in massively inadequate waste-water and water supply management. Problems with inadequate management include: water-borne disease outbreaks; infrastructure breakdowns; inadequate disinfection of drinking water; energy payments for

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these systems cannot be made; water metering is inadequate resulting in low collection rates (around 20 per cent overall); water charges/tariffs remain low; lab surveillance in the majority of systems is not conducted thus there is incomplete assessment and reporting; and there are no incentives for private sector participation.113 Given this sad state of administration, civil society and its interaction with government agencies becomes crucial for augmenting capacity and pressuring for change. Georgian environmental civil society The number of environmental NGOs registered in Georgia was around 200 as of 2002 according to the UNECE.114 An important question about these figures is the number of truly effective organizations. There are a handful of those readily identified by international donors and analysts as having impact, but these easily recognized organizations have had major access to policy-makers and provided important support to the Ministry of Environment and Natural Resources Protection. These effective organizations are funded by the international community, which certainly raises the question of sustainability. Local NGOs in Georgia are able to influence policy and, despite a number of weaknesses, comprise one of the most effective interest groups.115 Administrative agencies do work closely with civil society. Former minister Chkobadze invited NGO expert involvement in creating legislation, presumably in order to supplement the Ministry’s capacity and create transparency. Jones noted the particular impact that NGOs have had on environmental legislation, as Chkobadze invited groups from the beginning of her tenure to help write approximately fifteen pieces of environmental legislation.116 Research institutions and universities have been very involved in preparing strategic documents and in decision-making processes, especially in biodiversity as ‘[s]ome are very effective in carrying out projects and their influence is considerable’.117 Not only has the ENRP requested NGO involvement in designing legislation and conducting Environmental Impact Assessments, but NGOs and business interests have requested assistance from the Ministry in collecting scientific data and in public relations and environmental education campaigns.118 Thus, interaction and assistance are bidirectional. The Green Movement was a successful early social movement and nonstate political organization founded in 1988.119 The Green Party emerged from the Green Movement, co-founded in the late 1980s, and became part of the political process, including representation in Parliament and continuing personal connections and influence as many founding members of the Green Party joined the ruling CUG party (notably Zurab Zhvania, as discussed earlier). The relevance of the Green Party gradually eroded, culminating in the lead-up to the 2003 elections, when it joined Shevardnadze’s coalition, and has thus been effectively and completely sidelined.120 It was

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most effective in the late Soviet era and immediate post-Soviet era regarding work on nuclear power. The early and active political role of the Georgian Green Party and the Green Movement, along with the political space created for civil society as mentioned previously, may have led to the professionalization of environmental NGOs. A number of the most prominent environmental activists gained early experience in the Green Movement, the Green Party and organizations such as Friends of the Earth, which have and continue to coordinate efforts.121 Yet the real test for environmental NGOs has come more recently, in the last few years, in the development of their watchdog role over governmental decisions and international institutions’ agendas. One of the most prominent environmental organizations in Georgia today is Green Alternative, headed by Manana Kochladze, formerly with Friends of the Earth and the CEE Bankwatch group.122 Green Alternative’s work has been recognized most recently when Ms Kochladze was awarded the Goldman Environmental Prize for Europe in spring 2004, mostly for work on the BTC issue. This organization also works on deforestation and other energy-related issues. While competition is often rampant among NGOs who are primarily funded by international agencies, professional and personal ties have led to a remarkable level of coordination and cooperation in Georgia not seen in many other Eurasian nations’ civil societies.123 These former alliances continue and thus coalition building has effectively occurred in Georgia. This coalition of environmental NGOs and other interest groups in Georgia has highlighted the misapplication of national environmental law, publicized information about the BTC pipeline to affected communities, criticized the weaknesses of the EIA process, conducted the data gathering and monitoring that administrative agencies are not doing (or conducting parallel information gathering to question official information) regarding deforestation and biodiversity for example, and have begun to use the court system. Together with private business interests, such as the Georgian Glass and Mineral Water Company, a unique coalition has formed of environmental NGOs – local and international (the CEE-Bankwatch Network for example) – a major business, and communities, which have gained wide press coverage of their criticisms and activism in Georgia and internationally. Yet despite the relatively active role of civil society in Georgia, it still needs development. In particular, these local organizations are not membership driven. As the most effective organizations receive international funding, there is a low ratio of effective organizations to ineffective ones, and there are continuing problems of access to information (with inadequate data on environmental concerns, such as a confirmed rate of deforestation). Finally, the weakness in the judicial system negates the potential for these increasingly effective organizations to pursue legal remedies to weak environmental policy implementation by the bureaucracy.

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Possible changes There are several areas in need of rule of law reform, including changes in environmental legislation to deal with complex and unevenly applied environment taxes – problems encountered in all areas of tax collection as highlighted in Chapter 7 – overlapping jurisdictions, insufficient enforcement mechanisms, and with issues of privatization. There should be expected impacts of bureaucratic reform and anti-corruption measures and potential benefits from the increased role of international funding. The latter certainly could play a dual role depending on the amount of funding given to forestry programmes, water supply and waste-water system projects, and broader sustainable development programmes, such as those on which the Regional Environmental Centre is now concentrating.124 A number of reform measures that have begun the regime change in late 2003 and which may affect both water and forestry policy include: tackling corruption; attempts to resolve territorial integrity issues and the concomitant problems of smuggled goods such as forestry products; water supply system privatization such as the Tbilskalkanali privatization plan which was strongly supported by Saakashvili when he was Mayor of Tbilisi and now by the new Mayor; development of local-level governance plans; a balanced approach to privatization of water resources indicated by recent statements that Enguri Hydropower Plant will not be privatized; and finally the potential impacts the BTC pipeline could have on the domestic energy sector.

Conclusions: comparisons of environmental law and policy in Georgia and Armenia The process of democratic consolidation is complex. Environmental policy reform in democratizing nations results from strengthening a number of spheres of democratic governance (rule of law, bureaucratic state structures, civil society, political society and economic society), and the specific policymaking characteristics of capacity, concern, contracting and constraints that link these spheres. When the process of democratic consolidation languishes and democracy does not become deeply rooted in society, as has occurred in all three Caucasian countries, environmental policy reform is negatively affected, as was demonstrated in the water and forestry policies of both Armenia and Georgia. Yet Georgia is clearly ahead of Armenia and Azerbaijan in democratic consolidation in a number of areas, including improved elections, as suggested in Chapter 2. These differences in the level of consolidation can be seen in terms of the political will to reform demonstrated in 2004 by the Saakashvili regime, but were also demonstrated in the late 1990s during Shevardnadze’s tenure and certainly since the mid to late 1990s with political events in Armenia. Furthermore, the deepening of civil society, legislative branch strength and independence, and the plurality of politics in general are much

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greater in Georgia than in either Armenia or Azerbaijan. Differences in types of corruption between the countries also highlight this variance.125 As a result of stronger democratic consolidation in Georgia, we would therefore expect to see improved environmental outcomes in Georgia over Armenia and Azerbaijan. Yet despite the differences between Georgia and Armenia in terms of political regime, specifically the greater degree of civil society involvement in environmental policy-making in Georgia, greater transparency and reformist political will, Georgia’s environmental reforms are still far from effective, as are Armenia’s. A comparison of forestry and water policy in both countries demonstrates that these political differences have not yet translated into appreciably different or improved environmental outcomes in Georgia. More definitively, it is difficult to ascertain any appreciable difference between Armenia and Georgia in improvements in water quality and/or supply (the latter being more important in Armenia) and deforestation, two serious ecological issues facing both nations. This clearly indicates that all of the spheres of democratic governance need to be consolidated in a country for effective environmental policy reform to be successful, not just one or two particular areas such as civil society and an independent press. Environmental policy reform in democratizing nations is a result of strengthening of a number of political spheres and the links between them – it not easy or automatic simply because of improvements in one sector. The sectors of democratic governance often do not develop evenly, but rather, some develop faster, pulling the others along, which creates problems when one sector advances before the others. For example, we see the law-making process push out ahead of the ability of civil society or administrative agencies to effectively implement those laws. While improvements in civil society can potentially cause movement forward, environmental policy cannot be effective without consolidation in all spheres and without both political will and capacity. We have also demonstrated that countries with weak will and capacity such as Armenia and Georgia become increasingly open to contracting and cooperation with international actors, which has mostly positive benefits in terms of learning and funding of projects with the state and civil society organizations. As was demonstrated in both countries, while international actors can augment weak capacity, they also drive the policy agenda, with less assistance given to environmental policy as compared to economic development. In addition, the efforts of international organizations are often short-lived and ineffective in improving environmental protection outcomes, because there are no systematic, long-term capacity building efforts with administrative agencies or NGOs. The environmental policy that results from Western models is vastly different from previous environmental laws or policies, and may not coincide well with the national environmental culture or norms. There are also potential negative impacts of democratization that go hand in hand with the move towards market economies, seen with the

170 The State of Law in the South Caucasus

impacts of privatization of natural resources, and with the increased access to the policy-making process of a greater number of competing interests. Thus, significant improvements in environmental policy outcomes will most likely not be seen in environmental policy until consolidation in all spheres of governance – including the rule of law – and a meeting of political will and capacity occurs. The recent changes in Georgia may indicate a meeting of these characteristics and further democratic consolidation. Thus future research should assess the extent of capacity improvements in both countries and what this means for environment policy reform. Finally, there is some cause for optimism about environmental protection in both Georgia and Armenia in the initial steps to full democratization over the transition period. These include the increase in political pluralism and political participation in environmental policy-making, the move from centralized, outside management of the environment, to more decentralized, local management, and the increasing opportunities for cooperation with the West and with the international environmental community. The increasing involvement of international organizations in environmental protection does force greater accountability in the environmental sphere, fosters participation and the free flow of information, and urges the increasing use of appropriate market mechanisms to protect the environment.

Notes 1. Based on interviews conducted in 1999 and 2001 with individuals active in the Armenian environmental movement. 2 See, for example, G. Hardin, ‘The Tragedy of the Commons’, Science (December 1968), p. 1243; R. A. Payne, ‘Freedom and the Environment’, Journal of Democracy, 6 (3) (1995), p. 41; M. Feshbach and A. Friendly, Ecocide in the USSR (New York: Basic Books, 1992); and D. J. Peterson, Troubled Lands: the Legacy of Soviet Environmental Destruction (Boulder: Westview Press, 1993). See A. Chatrchyan, ‘Democratic Transition, Stagnation and its Environmental Consequences: Protection of Lake Sevan and Forestry Resources in Post-Soviet Armenia’ (Ph.D. diss., University of Maryland, 2003) for a full literature review. 3. See T. Carothers, ‘The End of the Transition Paradigm’, Journal of Democracy, 13 (1) (January 2002), p. 9 or United Nations Development Programme (UNDP), Human Development Report 2002: Deepening Democracy in a Fragmented World (New York: UNDP, 2002). 4. See W. M. Lafferty and J. Meadowcroft, eds, Democracy and the Environment: Problems and Prospects (Cheltenham: Edward Elgar, 1996); and M. Jänicke and H. Weidner, eds, National Environmental Politics: a Comparative Study of Capacity Building (Berlin: Springer, 1997). 5. See W. Ascher, Why Governments Waste Natural Resources: Policy Failures in Developing Countries (Baltimore and London: Johns Hopkins University Press, 1999). Also, R. O. Keohane and M. A. Levy, eds, Institutions for Environmental Aid (Cambridge, MA: MIT Press, 1996). 6. Carothers, supra note 3.

Rule of Law and Environmental Policy Reform 171 7. See J. J. Linz and A. Stepan, Problems of Democratic Transition and Consolidation (Baltimore: Johns Hopkins University Press, 1996), p. 7 for definitions of the rule of law, bureaucratic state structures, civil society, political society and economic society. 8. Ibid. at pp. 13–15. 9. Keohane and Levy, supra note 5. 10. Ibid. 11. See A. Wooden, ‘Silent Chernobyls: Ecological Degradation, Macroeconomic Policies, and Political Institutions’ (Ph.D. diss., Claremont Graduate University, 2002); A. Wooden, ‘Environmental Policy and the Sequence of Political and Economic Reform in Central Asia’, Comparative Studies of South Asia, Africa and the Middle East (Durham: Duke University Press, forthcoming 2005). Political constraints are highlighted by the work of Douglas C. North and Witold J. Henisz regarding measures of accountability and controls of rent-seeking, which Ascher, supra note 5, argues are important in the development of effective natural resource policies in developing countries. See D. C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990); W. J. Henisz, ‘The Institutional Environment for Economic Growth’, Economics and Politics, 12 (1) (2000), p. 1. 12. For a thorough discussion of these policy-making characteristics and relevant literature review, see Wooden, ibid. 13. See Chatrchyan, supra note 2, for discussion of positive and negative environmental policies in Soviet Armenia. For a discussion of nature protection in the Soviet Union, see D. Weiner, A Little Corner of Freedom: Russian Nature Protection from Stalin to Gorbachev (Berkeley: University of California Press, 1999) and D. Weiner, Models of Nature: Ecology, Conservation and Cultural Revolution in Soviet Russia (Pittsburgh: University of Pittsburgh Press, 1988). 14. The question of effectiveness of environmental interest groups and NGOs revolves around their influence in a number of spheres. These include: (1) their involvement in the legislative process; (2) ability to influence public opinion about environmental issues; (3) ability to elicit a response from the government regarding criticism of environmental impacts; (4) coalition building; and (5) extent of indigenization. 15. The reason for this international largesse has to do with the strategic location and importance of these two nations, the strong and politically engaged Armenian diaspora, and the international community’s response to changes in regime in Georgia. In 2004 both Armenia and Georgia were chosen for enhanced US foreign assistance through a Bush administration initiative called the ‘Millennium Challenge Account’. 16. See S. Levitsky and L. A. Way, ‘The Rise of Competitive Authoritarianism’, Journal of Democracy, 12 (2) (2002) and S. Holmes, ‘Potemkin Democracy’, in T. K. Rabb and E. N. Suleiman, eds, The Making and Unmaking of Democracy: Lessons from History and World Politics (New York: Routledge, 2003). 17. C. H. Fairbanks, ‘Georgia’s Rose Revolution’, Journal of Democracy, 15 (2) (2004), p. 110. 18. Freedom House, Nations in Transit 2004: Democratization in East Central Europe and Eurasia (Washington, DC: Freedom House, 2004). Available at http://www. freedomhouse.org. While the changes in the fairness and transparency of elections and other improvements that have been noted by scholars and observers of Georgia are not yet reflected in this year’s scoring assessment, the assumption that

172 The State of Law in the South Caucasus

19.

20.

21. 22.

23. 24.

25.

26.

27. 28.

29. 30. 31. 32. 33. 34.

consolidation is occurring is discussed in the 2004 report. ‘Georgia’s performance since the “Rose Revolution” of last November suggests more promise in this regard’, when compared to the concern about the democratic trajectory of Armenia (from the Executive Summary). In Armenia, these major crises included the Nagorno-Karabakh war with Azerbaijan and resultant economic and energy crises from 1992–4; the political crises culminating with the resignation of President Ter-Petrossian in 1998; and the October 1999 assassinations in Parliament of several major political leaders. The democratic transition period in Georgia has also been marked by a series of political crises and conflict; two separatist wars (South Ossetia and Abkhazia) and one civil (the Tbilisi war) were fought between 1990 and 1993. G. Sartori, Comparative Constitutional Engineering: an Inquiry into Structure, Incentives and Outcomes, 2nd edn (New York: New York University Press, 1997), p. 121. Sartori notes that the ‘extreme’ form of semi-presidentialism adopted by Russia (and similarly Armenia) is ill-conceived because too much power is vested in the President, while the parliamentary checks on the President are weakened. Holmes, supra note 16. Parliamentary Assembly of the Council of Europe (PACE), ‘Functioning of Democratic Institutions in Georgia’, Resolution 1363 (adopted by the Assembly 28 January 2004), debate on a report of the Committee on the Honouring of Obligations and Commitments by Member States of the Council of Europe (Monitoring Committee). Most of these political parties do not have differentiated or advanced political platforms. See Freedom House, supra note 18. This situation is to be expected immediately following the political upheaval of the ‘Rose Revolution’, but the role of the opposition has been important in the last few years in Georgia in pressuring the government to reform, and would be useful in pressuring the reformist government to remain committed to doing so. Organization for Security and Cooperation in Europe (OSCE)/ODIHR, Georgia Extraordinary Presidential Election (4 January 2004); OSCE/ODIHR, Election Observation Mission Final Report; OSCE/ODIHR, Partial Repeat Parliament Election (28 March 2004); and OSCE/ODIHR, Election Observation Mission Report, Part 2. The opposition lodged several appeals with the constitutional court of Armenia, but failed to overturn the election results, although the court did note the serious voting irregularities. See supra note 18. OSCE, Presidential Elections and OSCE, Parliamentary Elections, supra note 25. For example with the successful lobbying of a group of NGOs for protection of disabled rights in 2003, and the formation of an NGO coalition, headed by the diaspora-funded Armenian Tree Project, to fight deforestation. See supra note 18. Ibid. S. F. Jones, ‘Democracy from Below: Interest Groups in Georgian Society’, Slavic Review, 59 (1) (2000), p. 42. Holmes in Jones, Ibid. at 43. The attempt to increase political capacity is exemplified by the recent tough positions taken on territorial integrity issues in Adjara, South Ossetia and Abkhazia. Georgia ranked 124th and Armenia ranked 78th of 133 countries surveyed in 2003 by Transparency International on the level of corruption in the country. See Transparency International, Corruption Perceptions Index 2003 (25 July 2004), available at http://www.transparency.org.

Rule of Law and Environmental Policy Reform 173 35. See C. H. Stefes, ‘Systemic Corruption in Armenia and Georgia: Differences, Consequences, and How to Fight It’, unpublished paper presented at International Research and Exchanges Board’s Caucasus Regional Policy Symposium (2004); and Transparency International, ibid. 36. United Nations Economic Commission for Europe (UNECE), Environmental Performance Review of Armenia (Geneva: UNECE, 2000), p. 94. Available at http://www.unece.org/env/epr/studies/armenia. 37. Interview with Kirakosyan, Lake Sevan Project Coordination Unit, MNP, 20 August 1999. 38. Republic of Armenia, First National Communication under the UNFCCC (Yerevan, Armenia: MNP and UNDP, 1998), p. 38. 39. Republic of Armenia, Forests and their Significance for Mountainous Armenia (Yerevan, Armenia: MNP, Hayantar Forestry Service, financed by the Royal Netherlands Embassy through the KNIP Fund, 2001), p. 91; and Kreditanstalt für Wiederaufbau (KfW), Caucasus Elaboration of a Vision of an Eco-Regional Conservation Plan (Yerevan, Armenia: KFW (with AHT, TAESCO, CUNA and WWF), 2003), pp. 2, 89. 40. The Soviet Armenian government planted many new reserves, shelterbelts and greenbelts of trees throughout the country. See P. R. Pryde, Environmental Management in the Soviet Union (Cambridge: Cambridge University Press, 1991), p. 123; and interview with Ter-Ghazaryan, Forest Research and Experimental Centre, 2 November 2001. 41. The energy crisis was caused by Armenia’s conflict with Azerbaijan over the Nagorno-Karabakh conflict and resulting blockade of Armenia by Azerbaijan and Turkey, leaving Armenia with only hydropower and small shipments of fuel for its thermal power plants, since the nuclear power plant had been closed since 1989. 42. The declining water level was caused by the withdrawal of approximately 3200 million m3 of water from the lake over the period from 1991–5. See Lake Sevan: Problems and Strategies of Action: Proceedings of International Conference 13– 16 October 1996 (Yerevan: MNP, UNDP, and the Embassy of France, 1998), p. 48; and interview with Kirakosyan, MNP, 20 August 1999. 43. Interview with Sayadyan, Armenian Agricultural Academy, 31 October 2001. 44. While the Soviet government spent the equivalent of US$4 million on forest protection and restoration, the Armenian government today spends less than US$300 000 per year. 45. Large-scale changes in the irrigation sector, which remains the main water consumer in the country, are required to truly rehabilitate the lake. Interview with Tadevosyan, parliamentarian, 17 October 2001. The World Bank is working to address irrigation problems through its Irrigation Development Project, approved in August 2001. See http://www.worldbank.org.am/. 46. The World Bank, Towards Integrated Water Resources Management: Technical Paper (Washington, DC: World Bank, 2001), p. 18. 47. The official current rate of rehabilitation is 500–600 hectares annually, but is actually much less than this amount. United Nations Development Programme (UNDP), Human Development Report Armenia 1999 (Yerevan, Armenia: UNDP Armenia, 1999). 48. Environmental Public Advocacy Centre (EPAC), Manual on Public Participation in Environmental Decision Making (Yerevan, Armenia: EPAC, 1999), p. 7. 49. Ibid. 50. Interview with Haroutounyan, Head of Economics Department, MNP, 30 November 2000. 51. Supra note 48.

174 The State of Law in the South Caucasus 52. Armenia wrote and adopted the NEAP in 1999 because of an IDA requirement. Interview with Boyd, USAID, 25 October 2001. 53. Article 10 of the Armenian Constitution confers responsibility on the state to ensure protection of the environment and rational utilization of natural resources. 54. The disclosure of environmental information to the public may be denied if it is deemed to be a state or industrial secret. Interview with Iskoyan, Director of EPAC NGO, 3 August 1999, and supra note 48 at p. 16. 55. The judicial framework in Armenia is not yet free from political influence, and the ‘judiciary is still far from fulfilling its role as a guarantor of law and justice’. Supra note 18. 56. EPAC has attempted to sue local government authorities for granting leases and building permits on previously forested lands without first conducting EIAs, with limited success. Interview with Iskoyan, 22 October 2001. 57. Interview with Gabrielyan, Head of Atmospheric Department, MNP, 11 August 1999. 58. The Greens Union NGO has criticized the new law for making water a commodity in a very poor country. Personal communication with Sanasaryan, 30 October 2002. 59. There were some preliminary, ad hoc internationally funded forest development and assessment projects completed earlier in the 1990s by the FAO and SIDA, but no overall project to reform the institutional or legal problems with forestry management. Interviews with Simonian, UNDP, 16 October 2001 and Boyd, USAID, 25 October 2001. 60. Interview with Bagdasarian, Director of Association of Investigative Journalists, 31 October 2001. 61. Interview with Gabrielyan, MNP, 16 October 2001. 62. The ministerial post is a political appointee of the President, with no approval process by Parliament. From 1991–2000, the Minister of Nature Protection was changed five times, and three times from 1996–2000. 63. For comparison, the annual budget in 2000 for the Ministry was 561 million Armenian dram per year, while the Ministry of Energy’s budget was 9.5 billion dram per year, and the Ministry of Agriculture’s budget was 21.7 billion dram per year. Funding for the Ministry has also decreased over time. In Soviet times, annual funding for the Ministry was 4.5 million rubles (approximately US$4.5 million dollars); now it is less than one million rubles per year. 64. KfW, supra note 39. 65. As a result of this pressure, the government adopted a new process in 1995–6 to limit the water outflow from Sevan, whereby the Ministries of Agriculture and Energy had to submit their proposed water requirements to the MNP for approval. 66. These internationally funded water projects in Armenia included: the World Bank-sponsored Lake Sevan Action Plan (1996–8); the World Bank project on Integrated Water Resource Management (1999–2001); the World Bank Irrigation Development Project (2002); the World Bank Municipal Water and Wastewater Project; the World Bank Natural Resources Management and Poverty Reduction Project, and the USAID Sustainable Water Resource Management Project. 67. This pressure may come through the World Bank Natural Resources Management and Poverty Reduction Project, although there have been no changes to administrative structures as of 2004. There will likely be greater resistance to change, given

Rule of Law and Environmental Policy Reform 175

68. 69.

70. 71. 72.

73. 74.

75. 76.

77.

78.

79. 80.

81.

the high degree of corruption in forestry agencies and the lucrative nature of timber extraction. See J. I. Dawson, Eco-Nationalism: Anti-Nuclear Activism and National Identity in Russia, Lithuania, and Ukraine (Durham: Duke University Press, 1996). The population that supported the environmental movement and the closure of polluting industrial plants and the unsafe nuclear power plant during the Soviet period in some sense blamed the ecologists for the economic downturn and the severe energy crisis upon independence, when the nuclear power plant in particular would have provided much-needed energy and jobs. Interview with Sanasaryan, President of Greens Union, 29 July 1999. Interview with C. Dunlap, American University of Armenia, 17 October 2001. Beneath the veneer, many of these NGOs consist of only between one and four people (if they are working at all), and most were established simply to gain access to international development assistance. World Learning, Armenia NGO Sector Assessment (Yerevan: World Learning, 2001); and interview with Sarkissian, Chairman of EcoTeam NGO, 20 July 1999. Most of the USAID development assistance to local NGOs in Armenia has been funnelled through the Armenian Assembly of America’s (AAA) NGO Training and Resource Center or Worldlearning’s NGO strengthening programme, while only a few national NGOs have received direct assistance. Interview with Sarkissian, Chairman of EcoTeam NGO, Armenia, 20 July 1999. Personal communications with Sanasaryan, Director, Greens Union of Armenia, Yerevan, 30 October 2002 and 24 April 2003. An exception in the water sector is the NGO Khazer’s work with the MNP and UNDP to push forward a project to restore Lake Gilli, which lies directly adjacent to Lake Sevan. Tapan EcoClub has received international support and carried on the strong Soviet Armenian tradition of organizing subotniks or clean-up days, and treeplantings, organizing a ‘March for Parks’ in 1997, 1998 and 1999 in connection with Earth Day. Armenian Assembly of America (AAA), NGO Training and Resource Center (NGOC), NGOC Newsletter 9 (Yerevan, Armenia: NGOC, 1997), p. 3; and Caucasus Environmental News Electronic Bulletin (CENN), Caucasus Environmental News Electronic Bulletin. Available at http://www.cenn.org. The tenth anniversary of the ATP was held in 2004, and the organization had planted 460 000 trees at more than 450 community sites, engaged in coppicing projects to rehabilitate stumps of trees cut during the energy crisis, and started community tree nurseries and fruit-drying operations. See R. Greenspan Bell, ‘Legitimacy, Trust and the Environmental Agenda: Lessons from Armenia’, The International Environmental Law Reporter (September 2000). For example, a meeting was held in March 2003 between USAID, the MNP and environmental NGOs where forest rehabilitation was discussed, and in April 2003, the ATP organized a reforestation and clean-up day at the Tsisernakaberd Memorial, in conjunction with a newly formed national NGO called the Armenian Reforestation Coalition. Coverage of Armenian forestry issues in the Caucasus Environmental News Electronic Bulletin (CENN) (1998–2005). Available at http://www.cenn.org. See A. Gegeshidze et al., Georgia National Assessment Report for Sustainable Development to 2008 (2002), p. 28 (this is the national preparatory report for the Johannesburg Summit); Georgian Ministry of the Environment, State of the Environment Report (1996), available at http://enrin.grida.no/htmls/georgia/soegeor/hp_soege.htm;

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82. 83.

84. 85. 86. 87. 88.

89.

90. 91. 92. 93. 94. 95. 96. 97.

98. 99.

100. 101.

United Nations Economic Commission for Europe (UNECE), Georgia Study (2003), p. 91; Friends of the Earth (FOE) and Association ‘Green Alternative’, Decade of Independence: Effects of Economic Liberalization in Georgia Country Report (April 2004), pp. 35, 36, note 74; World Bank, Natural Resource Management Strategy: Eastern Europe and Central Asia, World Bank Technical Paper No. 495 (Washington, DC: World Bank, 2000), Annex I, p. 90. United Nations Development Programme, UNDP National Human Development Report Georgia 1996 (Tbilisi: UNDP, 1996). High import taxes and no export taxes have greatly contributed to this imbalance. CENN Seminar held in Bakuriani, Georgia, Communities and Sustainable Forestry Management: Establishment of Independent Forestry Monitoring Network (2003). See UNDP, supra note 47. FOE and Green Alternative, supra note 81 at p. 35. See UNECE, supra note 81 at p. 95. The World Bank, Georgia Forests Development Project (Washington, DC: World Bank, 2002). Georgia has 12 035 total annual renewable freshwater resources m3/capita, compared to 2780 m3/capita for Armenia and 3765 for Azerbaijan (Food and Agriculture Organization, Aquastat Online Database. Available at http://www.fao.org/waicent/faoinfo/agricult/agl/aglw/aquastat/main/index.stm. Food and Agriculture Organization of the United Nations (FAO), Irrigation in the Countries of the Former Soviet Union in Figures (Rome: FAO, 1997), p. 103 and US Department of Energy, EIA Country Analysis Briefs, Caucasus Region – October 2003. Available at http://www.eia.doe.gov/emeu/cabs/caucasus.html. See UNECE, supra note 81 at p. 79. Ibid. at pp. 79 and 88. Republic of Georgia, Constitution of Georgia (1995). See C. P. M Waters, ‘Who Should Regulate the Baku–Tbilisi–Ceyhan Pipeline?’, Georgetown International Environmental Law Review, 16 (2004), p. 403. See UNECE, supra note 81 at p. 22, also at p. 16 and at pp. 20–1. Ibid. at p. 102. FOE and Green Alternative, supra note 81. In the 1993 resolution of Cabinet of Ministers N 1010 and the 1994 resolution Taxes on the Use of Natural Resources. Environmental taxes are further established in the Law on Wildlife, Law on Plant Protection and the Administrative Code (FOE and Green Alternative, supra note 81; see UNECE, supra note 81 at p. 102). Amendments to the Tax Code have been discussed in Parliament over the last year. See FOE and Green Alternative, supra note 81 at p. 33; see UNECE, supra note 81 at p. 17. In May 2003, the environmental NGO Green Alternative brought a suit against the Ministry of Environmental Protection for violation of environmental law that could seriously impact the Borjomi National Park (a major forested area), Borjomi Mineral Water Field and residents. Green Alternative lost the case in March of 2004, but it is an important precedent that an organization attempted to bring such a case to court: it was heard by the court, and it was publicized. Georgian Opinion Research Business International (GORBI)/Gallup International, Corruption Survey, 2003. Available at http://www.gorbi.com. Gegeshidze et al., supra note 81 at p. 73. Regarding irregular privatization, the 1999 Forest Code does not deal with the possibilities of privatizing former

Rule of Law and Environmental Policy Reform 177

102.

103.

104. 105.

106. 107.

108.

109.

110.

111.

112. 113. 114.

kolkozes and sovkhozes (collective and state farms). See the Republic of Georgia, Forest Code (Tbilisi, 1999); see also UNECE, supra, note 81 at p. 95. Saakashvili, in his opposition role as Mayor of Tbilisi, was outspoken against the Shevardnadze administration approval of the BTC pipeline through BorjomiKharagauli Park. When he was first elected President in January 2004, Saakashvili stated support for the BTC project. Yet more recently he took a publicized stance against the social and environmental impacts of the pipeline and criticized the unfairness of the contract signed with British Petroleum (BP). See CEE Bankwatch Network/WWF/Friends of the Earth/PLATFORM/Corner House Press Release (27 July 2004); ‘Baku–Ceyhan Pipeline Stopped as BP Caught Violating Georgian Law’, EurasiaNet (8 March 2004), available at http://www. eurasianet.org. As with the Armenian and other former Soviet Environment Ministries, the Georgian Ministry is less powerful than some of the other ministries whose decisions will trump it. See also A. Wooden, ‘The Nexus Between Environmental Policy and Human Rights in Central Asia’, Harvard Asia Quarterly, 8 (2) (2004). See UNECE, supra note 81 at p. 21. It is also ‘difficult to coordinate protection and control measures’ because ‘responsibilities of the State Dept. of Forestry and the State Dept. for the Management of Protected Areas overlap’. Ibid. at p. 102. Ibid. at pp. 21, 22 and see Gegeshidze in the UNECE Georgia Study; Gegeshidze et al., supra note 81. 26 November 2002 letter N01/1893 from Minister Chkobadze to Sir John Brown, President, British Petroleum; 7 November 2002 letter from David Woodward, President BP Azerbaijan and Natig Aliyev, President SOCAR to President Eduard Shevardnadze. G. Kupatadze, ‘Georgian Villagers Haggle with Oil Giant’, IWPR’s Caucasus Reporting Service No. 140 (1 August 2002); G. Abarovich, ‘Georgia: Further Protests in the Pipeline’, IWPR’s Caucasus Reporting Service No. 158 (5 December 2002). Both available at http://www.iwpr.net; 19 December 2002 letter to James Wolfensohn, President, World Bank Group from a coalition of domestic and international environmental and human rights NGOs. See supra note 93; N. Gujaraidze, ‘The BTC Pipeline: Political Considerations Outweigh Environmental Concerns’, Russian Conservation News No. 32 (Spring 2003); and ‘The Baku–Tbilisi–Ceyhan (BTC) Pipeline: a Necessary Compromise. Excerpt of letter from group of Georgian NGOs to Rashad Kaldany, IFC and Peter Reiniger, EBRD’, Russian Conservation News No. 32 (Spring 2003). The Saakashvili administration seems to be trying to balance economic development interests with environmental and social concerns, and the President even spoke at length in trips to the US at press conferences and speeches about this need to protect the environmental rights of Georgia and not be pressured by an unequal relationship with multinational companies like BP. FOE and Green Alternative, supra note 81; UNECE, supra note 81; ‘If one takes a look at the budget … drastic decline in funding for environmental protection … environmental protection is considered as the least priority’, Gegeshidze et al., supra note 81 at p. 19. See UNECE, supra note 81 at p. 95. Ibid. at p. 88. Ibid. at p. 43. According to Friends of the Earth and Green Movement representatives, the number of environmental NGOs in 2000 was fifty-six, in a

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115. 116. 117.

118.

119.

120.

121. 122.

123.

124. 125.

handout given at an environmental policy conference in Tbilisi, Georgia in spring 2000. See supra note 31 at p. 42. Ibid. See UNECE, supra note 81 at p. 102, regarding the important involvement of the environmental NGOs in the development of the Black Sea Environment Programme of 1993 and the National Consultative Commission for Integrated Coastal Zone Management, in Gegeshidze et al., supra note 81. Georgian Glass and Mineral Company requested scientific data from Ministry regional office/scientific institute and NGOs have asked for Ministry help in disseminating information and in environmental education programmes. See UNECE, supra note 81 at pp. 42, 71. J. Aves, ‘The Rise and Fall of the Georgian Nationalist Movement, 1987–91’, in G. A. Hosking, J. Aves and P. J. S. Duncan, The Road to Post-Communism: Independent Political Movements in the Soviet Union 1985–1991 (London: Pinter Publishers, 1992), p. 164. Personal communication with M. Mullen, former Country Director of National Democratic Institute and Chair of Transparency International – Georgia, January 2004. These organizations and the Green Party even share offices in Tbilisi at The Green House. Among the other environmentally related organizations of note in Georgia, are the Horizonti grant-making organization, the radio station Association Green Wave, and Noah’s Arc Centre for the Recovery of Endangered Species (NACRES) which has most recently been collecting data on biodiversity (a much needed role in the region that administrative agencies are not able to fulfil). See Wooden 2002 and 2005, supra note 11; also see Wooden 2004, supra note 103. Environmental NGOs in Central Asia have suffered from high levels of competitiveness and lack of coalition building given the tense and suspicious nature of the relationship between government and civil society and the competition for international grants. Personal communication with T. Magradze of the Regional Environmental Centre, Tbilisi, Georgia, January 2004. See Stefes, supra note 35; also C. H. Stefes, Understanding Post-Soviet Transitions: Corruption, Collusion, and Clientelism (Palgrave, forthcoming).

Part IV Vulnerable Groups and the Law

One test for the rule of law is how well legislators and courts protect the human rights of vulnerable persons. In Chapter 10, Sara Anjargolian considers the protection of women’s rights in Armenia in the fields of participation in public life, employment, education and health care. She contrasts Armenia’s obligations under international law with practice ‘on the ground’ and finds that a large gap exists. Similarly, in her consideration of the property rights of the internally displaced in Georgia, Anneke Smit suggests in Chapter 11 that the Georgian government’s public commitments have not been matched by concrete improvements to people’s lives. Property tenure remains uncertain for those who fled the conflict in South Ossetia and have ‘settled’ in other parts of Georgia and a series of informal practices have developed to mitigate the effects of this uncertainty.

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10 Armenia’s Women in Transition Sara Anjargolian

Introduction1 Equality between the sexes is an established concept with an important history in Armenian society. Ancient Armenian legal codes and constitutions were protective of women’s rights as far back as 443 AD, when the Codes of Shahapivan specifically gave a woman the right to the family property in the event that her husband left without grounds. The code also gave her the right to bring a new husband into the same house.2 The twelfth-century Criminal Code of Mkhitar Gosh specifically prohibited violence against women and imposed criminal penalties on anyone perpetrating such violence.3 More recently, in the twentieth century, Armenian women were members of the national Parliament in the first Armenian Republic (1918–20) at a time when women in the United States still did not have the right to vote. Rooted in this tradition of equality, when Armenia gained its independence from the Soviet Union it quickly acceded to the United Nation’s 1979 Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), becoming a state party in 1993 without reservations.4 Neighbouring Georgia and Azerbaijan became parties in 1994 and 1995 respectively. Signed by 169 countries, CEDAW sets forth the basic tenets of equality adopted by the world community. As a signatory to CEDAW, Armenia and its neighbours in the Caucasus voluntarily oblige themselves to comply with all the requirements and initiatives guaranteeing equal opportunities for women in all sectors, including political, social and economic life. Despite being a party to CEDAW, however, the status of women in Armenia today is contradictory at best. As noted in the chapters on the environment, relations with Europe and the internally displaced, there is often a disparity between international obligations and implementation in the region. Whereas Armenian laws as written generally articulate a vision of equality in line with CEDAW, what exists on the books is not necessarily 181

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implemented or enforced in reality. A gap is therefore created between the state’s formal vision of equality on paper and the actuality of women’s dayto-day lives.5 For example, while women in Armenia boast an almost 100 per cent literacy rate and tend to attain higher levels of education than men, they are more likely than men to be underemployed. Women are increasingly becoming the breadwinners and financially supporting their families, yet men are still considered to be the ‘head of the household’. Women are actively involved in social movements through the non-governmental sector (NGOs) in Armenia, yet are extremely under-represented in politics and discouraged from entering public life.6 Under the pre-independence socialist system in Armenia, as women were integrated into the labour market, given equal access to education, and formally included into governmental structures, they became technically equal. As Julie Mertus notes in her article on the human rights of women in Central and Eastern Europe, ‘If discrimination is defined narrowly as “different treatment” (treating women and men differently), ideologically, women did not experience discrimination under socialism. Women were just as obligated as men to work and contribute to their party and state. At the same time, however, women were expected to uphold their role as wife and mother – creating a situation where women were expected to participate fully in the workforce, but at the same time remain completely responsible for their families.’7 This chapter explores the status of women in post-Soviet Armenia today through an assessment of Armenia’s compliance with its obligations under CEDAW. The status of women in four specific sectors, relating to four CEDAW articles, will be explored: (1) politics and public life (article 7); (2) employment (article 11); (3) education (article 10); and, (4) health care (article 13). For each sector, both the status of women as reflected in the country’s written laws, and the status of women in practice, will be explored. This chapter is based on research conducted in Armenia from May–July of 2004 through the American University of Armenia Law Department and Legal Research Center. Approximately ninety interviews were conducted by eighteen law students who were trained on CEDAW’s sixteen substantive articles. Although research and interviews were conducted in most areas and subjects covered by CEDAW, including, for example, subjects related to trafficking and prostitution, marriage and family relations, and social and cultural patterns, this chapter focuses on sectors relating to four specific CEDAW articles.

CEDAW8 CEDAW was adopted in 1979 by the United Nations General Assembly and is often described as an international bill of rights for women. Consisting of a preamble and sixteen substantive articles, it defines what constitutes discrimination against women and sets up an agenda for national action to

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end such discrimination. The Convention defines discrimination against women as ‘any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of equality of men and women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other field’. By accepting the Convention, states commit themselves to undertake a series of measures to end discrimination against women in all forms, including: (a) to incorporate the principle of equality of men and women in their legal system, abolish all discriminatory laws and adopt appropriate ones prohibiting discrimination against women; (b) to establish tribunals and other public institutions to ensure the effective protection of women against discrimination; and (c) to ensure elimination of all acts of discrimination against women by persons, organizations or enterprises. The Convention provides the basis for realizing equality between women and men through ensuring women’s equal access to, and equal opportunities in, political and public life – including the right to vote and to stand for election – as well as education, health and employment. States parties agree to take all appropriate measures, including legislation and temporary special measures, so that women can enjoy all their human rights and fundamental freedoms. Moreover, CEDAW is the only human rights treaty which affirms the reproductive rights of women and targets culture and tradition as influential forces shaping gender roles and family relations. It affirms women’s rights to acquire, change or retain their nationality and the nationality of their children. States parties also agree to take appropriate measures against all forms of traffic in women and exploitation of women. The governments of Armenia, Azerbaijan and Georgia, along with all other countries that have ratified or acceded to the Convention, are legally bound to put its provisions into practice. They are also committed to submit national reports, at least every four years, on measures they have taken to comply with their treaty obligations. It is also important to highlight that many of the subjects addressed by the treaty are areas of concern for both men and women. As the American Bar Association’s Central European and Eurasian Law Initiative’s (ABA/CEELI) CEDAW compliance report on Armenia specifically notes, ‘focusing attention on compliance with CEDAW and women’s human rights does not mean that men do not also suffer from the failure of the Armenian health care system, for example, or that they are not also entitled to safe workplaces. Most of the areas of concern which are elaborated on in this report would, if addressed, improve the quality of life of all people in Armenia.’9

Politics and public life Article 7 of CEDAW holds that: ‘States Parties shall take all appropriate measures to eliminate discrimination against women in the political and

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public life of the country.’ Six years after independence, in analysing Armenia’s 1997 periodic report on the status of women in Armenia, the CEDAW Commission noted that, ‘the competitive policies emerging as a result of Armenia’s democratization have had an immediate negative impact on the status of women, demonstrated by the drastic decrease in the participation of women in the decision-making process at all levels.’10 Indeed, in 2000, only 3.1 per cent of Armenia’s Parliament members were women – compared to 3.5 per cent in neighboring Iran, 7.2 per cent in Georgia and 10.5 per cent in Azerbaijan.11 Although Armenia’s laws and constitution do not limit the rights of women to participate in the political life of the country, there are also no real incentives or affirmative action measures to propel women into politics. Article 27 of the Republic of Armenia (RA) Constitution allows all citizens who are at least eighteen years old to ‘participate in government’. Article 2 of the RA Election Code ensures every citizen the right to vote. Article 3 of the RA Election Code also ensures ‘the right to elect or be elected’. Lastly, the Constitution gives the right to association in article 25. The Law on NGOs enables citizens to found, join and lead non-governmental organizations, without regard to sex.12 Despite the laws on the books, however, the reality in Armenia today suggests that politics is still considered largely a man’s world. Whereas women might be involved in government at the administrative or deputy ministerial levels, few women rise to become Members of Parliament (MPs) or ministers. In fact, of the 121 women listed as candidates for the most recent parliamentary election, only seven are MPs today. There is also a sense that women do not support each other. As Hranush Hakobian, one of the seven female MPs serving in the Parliament today pointed out: ‘70 per cent of the electorate are female but women prefer to vote for male candidates more than for female candidates. Women do not trust vesting power in other women. So there is a negative attitude among women in our society towards themselves.’ In an effort to increase representation of women in the National Assembly, a law was passed to ensure that women had at least 5 per cent representation in every political party list of candidates for the National Assembly. In reality, the parties placed the female candidates at the bottom of the lists and few were elected.13 MP Hakobian confirmed this practice: ‘We need to change the electoral procedure if we want to involve more women in the Assembly. The majority system of elections is not supporting our women who are running in elections. It is necessary to provide partisan representation of women running for elections and include their names at the beginning of the candidates’ lists instead of at the end like in the last election.’ Other women disagree, believing that affirmative action type measures will do more harm than good. A female director of a Yerevan-based nongovernmental think-tank asserts: ‘If there are few women in the political

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arena, it doesn’t mean that the rest were not let into public life, it means that they chose to be where they are. We can’t make things artificial. The work distribution we have in our society is a natural outcome of the changes that took place several years ago. Women got more involved in social, and to some degree, economic spheres, while men continued to prevail in the political arena. We should not cry out that we are deprived of certain rights, instead we’d better prove ourselves by our actions.’ It is worth noting that during the Soviet era, when a quota system ensured relatively equal participation by men and women in the political arena, of the 219 Members of Parliament in Armenia in 1985, 121 were women. Once the Soviet system collapsed and a new Parliament was elected in 1991, the number of female representatives dropped to eight.14 Like in most other countries, whether or not a person becomes involved in politics in Armenia is largely related to their financial means and political connections. Most political candidates are men who have had some level of financial success and are financially independent. This includes private businessmen and entrepreneurs who have become wealthy by taking advantage of the process of privatization and economic development in Armenia following independence. Women have had limited access to the same types of economic resources and funds to help propel them into the political sphere.15 Related to the attainment of financial independence is the general view that politics in Armenia is a ‘shady’ business, another important factor limiting women’s involvement. When asked why she did not choose to enter the political arena, a lecturer of Political Science at the Brusov State University of Foreign Languages in Yerevan responded: ‘It doesn’t pay enough and I did not want to be corrupted in order to support my family.’ The president of a Yerevan-based NGO doing work in the area of anticorruption put it differently, ‘[w]omen avoid getting involved in politics because politics is considered a “dirty thing”. I would never go into politics. Women in Armenia are better off in the NGO sector, which provides freedom and all the opportunities for women to pursue their ideas, control their time and spend more time with their children and family.’ Indeed, many women in Armenia choose to become involved in the non-profit or nongovernmental sector instead of politics. According to data from the NGO Centre in Yerevan, 80 per cent of heads of NGOs in Armenia are women. In addition, approximately 80 per cent of NGO members/supporters are also female.16 As Armine Ishkanian argues, by choosing to work through NGOs, women are able to reaffirm the ascribed gender roles and gender-based divisions of labour – and avoid the criticisms they would face if they entered political parties or government – but still work in and through the public sector to achieve personal and community objectives.17 Acknowledging both the entrenched nature of stereotypes branding women as first and foremost wives and mothers, and the general socialization

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of girls/women against political participation, women in Armenia have indeed found a haven in the NGO sector. An interesting example of how Armenian women find themselves manipulating tradition and modernity simultaneously in order to both win international grants and recognition for their NGOs as well as appease local bureaucrats and politicians is the AllArmenian Women’s Union. In 1994, the organization’s leadership decided to name its regional chapters ‘hearths’ (odjakhner) instead of just ‘chapters’, thus reflecting the traditional, familial nature of women’s work.18 As Ishkanian puts it, ‘depending on the audience, the NGO women were “liberal, progressive women fighting for change” or “caring, nurturing mothers working for the spiritual and cultural renewal of the nation”.’19 By way of comparison, a similar phenomenon is underway in neighbouring Azerbaijan. As Nayereh Tohidi notes, the post-Soviet transition has generally resulted in two opposing trends for women’s role in politics in Azerbaijan: a drastic decline in women’s share of representation at formal government levels on the one hand, and an unprecedented increase in women’s participation in informal politics, civil society building, and NGOs, on the other.20 In sum, although Armenian women have had limited access to elected office or high-level policy-making, they have maintained interest and involvement in the public sphere by founding, joining and supporting nongovernmental organizations. Whether or not women in Armenia will be able to break into the seemingly male-dominated arena of politics over the next decade remains to be seen.

Employment Article 11 of CEDAW requires states parties to take all appropriate measures to eliminate discrimination against women in the field of employment generally and discrimination in employment on the grounds of marriage or maternity specifically. Although article 29 of the RA Constitution ensures every citizen the right to free choice of employment, the right to a just wage no lower than the minimum set by the state and to working conditions meeting safety and health requirements, there is no equal pay provision in Armenian law. A clause in article 83 of the Labour Code states that any reduction of wages on the basis of sex is prohibited.21 Perhaps the most illuminating aspect of the Armenian Labour Code for purposes of a CEDAW analysis is the protective legislation related to women. For example, the Code includes expansive legislation which prohibits women from engaging in ‘heavy and dangerous works’ and which restricts an employer’s ability to employ women in particular fields involving underground work or heavy lifting (RA Labour Code article 184). Furthermore, women are not permitted to engage in night work, except in special circumstances (RA Labour Code article 185). Pregnant women are also subject to protective legislation. For example, it is prohibited to employ pregnant

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women and women with children under two years of age in night and overtime work, on off-days, or to send them on business trips (RA Labour Code article 186). Such prohibitions do not exist for fathers. The maternity leave provision assures women a pre-natal and post-natal leave period of fifty-six calendar days (RA Labour Code article 189). Article 191 of the RA Labour Code permits maternity leave until the child reaches three years of age, although part of the time is without benefits. Moreover, employers are prohibited from refusing women employment or lowering their wages on the basis of pregnancy, maternity or breastfeeding (RA Labour Code article 197). In some cases, doing so is punishable with criminal sanctions (RA Criminal Code article 139). Various other benefits and privileges are accorded to pregnant women and nursing mothers under Armenian law. For example, pregnant women may have their production quotas lowered or they may be transferred to easier jobs with no change in their wages. This is also true for women with children up to the age of eighteen months (RA Labour Code article 188).22 In reality, although Armenia’s protective legislation is fairly comprehensive, and seemingly competitive with most Western jurisdictions, the country’s current state of transition towards a market-based system makes it almost impossible for many employers to uphold the country’s labour laws. As a fifty-year-old male owner of a chemical factory put it when asked whether he provides for maternity leave: ‘No. I am running a small business and I do not have enough income to provide maternity leave.’ When asked if he would try to retain a pregnant employee or if he would rehire her after her maternity leave ended, he answered: ‘I really would like to provide my employees with such opportunities, but as I mentioned, I am running a small business and have several employees with very precise responsibilities. If she goes for a month or two, I will take her back because we can cover her work by the common efforts of the remaining employees. But if the period extends, then I will have to hire another employee and I don’t think it will be appropriate to dismiss the new employee when the old one is ready to come back.’ A school teacher and member of the Association of Women with University Education confirmed that ‘women are dismissed while they are on maternity leave or otherwise not paid during their leave period. Many women do not know their rights. This happens mainly in the private sector.’ With the current state of the economy in Armenia, employers not only find it difficult to uphold current labour laws, but often also illegally include unfair terms in employment contracts such as the termination of the contract in the event of pregnancy. Due to the current unstable social and economic conditions and difficulties with finding a job caused by high unemployment, women often agree to such contracts. In order to circumvent the problem altogether, employers often prefer to recruit and hire men who bear less responsibility for child care and family related tasks and therefore more easily agree to work overtime or on weekends without extra payment.23

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Discrimination in the workplace may be said to correspond with the common belief that men should be the core breadwinners of the family and therefore ‘deserve’ to earn more money than women. Women’s wages are often considered to be ‘extra’.24 A female physician who practises medicine in a rural region of Armenia explained that she had to fight for her right to continue working: ‘My desire to work has always been the subject of constant arguments at home. My husband has always protested my decision to work and tried to persuade me that my duty is to stay at home and care for my three kids.’ A female attorney elaborated: ‘It is very difficult for me to be a lawyer. I am always trying to prove to everybody that I am a woman who can do the job of a lawyer. When I’ve applied for jobs, I have heard employers say: “A female lawyer will not do an adequate job in our society, for this position we need a male.” I think the problem is that women in our society do not fight for their independence, and those that do are branded “feminists”.’ On the other hand, men often complain that women have monopolized certain professions and specialties, such as education, the service sector and medicine, leaving only physical labour and construction-type jobs for men. Cultural stereotypes continue to play a strong role in defining appropriate professional roles. ‘Being an operator, secretary or assistant is a female job. Females under the age of thirty are mostly sought for these jobs. This is because employers are, as a rule, males, who would like to have young and attractive females as their co-workers.’25 Lastly, sexual harassment by employers is a common and unfortunate phenomenon. A female owner of a Yerevan-based travel agency reported that during a job interview she was asked: ‘What else can you do? There are also other vacancies for women as young and beautiful as you.’ Many women tolerate sexual harassment for fear of losing their jobs and not being able to find suitable alternative employment. On her second day of employment, a woman who is now chief of staff for a major airline in Yerevan, recounts: ‘The next day after I was hired, my boss came into my office, took my hand and I could read what he was thinking in his eyes “I gave you a job, so how are you going to repay me for my kindness?” ’ Armenian courts have not maintained statistics on cases of discrimination and labour-related disputes. The bodies implementing national labour policy and the trade unions also do not log applications for the resolution of labour disputes, nor do they analyse and summarize the nature and causes of such disputes. As such, with no hard data, it is difficult to assess the extent of the problem, although according to the women interviewed, discrimination in the workplace is common and widespread. In sum, although the Labour Code is fairly comprehensive in its protections for women, like the expansive maternity leave provisions, these protections are rarely enforced and there is no mechanism to ensure that the laws, as written, are implemented.

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Education Article 10 of CEDAW requires that states parties take all appropriate measures to eliminate discrimination against women and ensure equal rights with men in the field of education. As education and knowledge are considered sacred national values in Armenia, the educational sector is perhaps one of the least discriminatory sectors in the country. According to the United States CIA Factbook, the literacy rate for both men and women in Armenia is estimated at 99 per cent.26 Article 35 of the Constitution ensures every citizen the right to an education and the Law on Education (article 6) affords that right irrespective of sex. Despite this, however, some traditional cultural norms and the lack of economic resources have had an adverse effect on educational opportunities for women. This adverse effect usually manifests itself more at the secondary school and university levels and less so at the elementary school level. A female MP, who is also the chairman of the Standing Committee on Science, Education, Culture and Youth, explained: ‘If we look at the schools, we can see that girls are more active at the elementary level than boys. They are more expressive and freer than their male counterparts. But come university age, the picture changes. Women become more passive as they become more mature and more family-oriented. They focus on getting married and start bearing children. Simultaneously the level of activeness of men rises at the university level. Men start advancing faster and further, while women stay behind. When the time comes for these women to re-enter public life, usually around age thirty, they face problems.’ Moreover, due to the high cost of education, families are sometimes forced to choose which child will attend school, which often translates to a preference given to the boy, who will have to become the head of a family and the main breadwinner.27 Furthermore, it is still largely culturally unacceptable in Armenia to send a daughter abroad to study, although it does of course happen. A female official with the Ministry of Education explained: ‘Because post-graduate students often have to go abroad for their Ph.D. degrees, most Armenian families are unwilling to send their girls abroad to study. The attitude towards boys is quite different because a man is considered to be the breadwinner, he is always encouraged to go abroad to study. Personally, I would never allow my daughter to study abroad. It is our national mentality.’ In the rural regions of Armenia, the divide of educational opportunities between men and women widens. As one twenty-year-old female student who grew up in a rural region of Armenia described, ‘In my family, and in most of the rural families in general, if there is a choice to send one of the children to the capital [Yerevan] to get an education, the preference is given to the boy. Even rich families in my village choose not to educate their daughters; they prepare them for marriage and for being housewives instead.’

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Another issue which limits women’s opportunities at the graduate level is the military draft for men. According to the Law on Military Service, men aged 18–27 are drafted into the army for a two-year period. However, men may be provided with a deferment if they are enrolled in a university as a graduate student. This leads to a well-known phenomenon whereby boys are sometimes given preferential treatment in admissions and for scholarships to help them defer the draft. A female official with the Ministry of Education explained, ‘There is a restriction on girls’ rights and it is quite natural. If a girl and boy with equal opportunities apply for one full-time spot in a Ph.D. program, the boy rather than the girl is more likely to be admitted. To be enrolled in a Ph.D. program is the only chance a boy has to avoid military service, that’s why parents are ready to do everything, even pay bribes, to ensure their son’s admission into the programme. While a girl’s parents usually figure that if their daughter has the proper knowledge she will be admitted and they don’t take any special measures.’ Due to the very difficult conditions men endure while serving in the military, most women do not consider it a sacrifice to relinquish their spot in a graduate programme to a male colleague. As one law student at the American University of Armenia recounted, ‘I gave up my spot in a Ph.D. programme to a male friend because I didn’t want him to be drafted into the army. I don’t regret my decision, I would do it again.’ Informal payments, as well as the practice of hiring private tutors, has also had a significant impact on the status of women in education. The female director of a school in Yerevan confirmed that ‘generally, all the male teachers are also private tutors, as it is impossible to live on just a teacher’s salary. Female teachers also teach privately, but it is not so common.’ The issue once again seems to be one of ‘the best investment’. When resources are limited, families often choose to invest in the future breadwinner, sending their boy children to private tutors or making informal payments and giving ‘gifts’ to teachers and principals in order to ensure higher marks or a little extra attention from the teacher.28 Some women have also reported a phenomenon where university administrators sometimes assume that young women (most of whom marry during their university years) will become pregnant and have other household duties which will prevent them from being fully available for their studies. Therefore, the reasoning goes, slots and opportunities in general are better given to young men.29 On the other hand, there is the widespread belief that the educational sector is too feminized since over 80 per cent of teachers are women. A senior male official at the Ministry of Education believes that if there is any discrimination in education, it is against men. ‘Honestly speaking, in this field, there is discrimination towards men. Traditionally, education has been dominated by women because it is traditionally accepted that women can be better teachers, and as you will notice, most teachers in Armenia today are

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women.’ However, even though over 80 per cent of teachers are women, in most schools, men are the senior administrators. As such, whereas the education system on the whole may be feminized, the decision-making level is fairly masculine. Out of eleven provinces in Armenia, the post of Provincial Education Director is held by a woman in only one province (Ararat).30 As such, the status of Armenian women in the educational sector seems to be mixed – affected by a mix of modern economic realities and traditional cultural norms dictating women’s roles.

Health care Article 12 of CEDAW requires that all appropriate measures be taken to eliminate discrimination against women in the field of health care and to ensure that women receive appropriate services in connection with pregnancy and the post-natal period. The laws and Constitution of the Republic of Armenia provide equal access to men and women in the field of health care. Article 34 of the Constitution provides, ‘Any person is entitled to the provision of health care. The procedure of provision of health care is established by law.’ In addition, the Law on the Provision of Health Care Services, article 4, provides, ‘Any person, regardless of one’s nationality, race, sex, language, religion, age and health condition, political or other views, social origin, property or other status, in the Republic of Armenia is entitled to the provision of health care services.’ In reality, however, health care in Armenia is treated as a luxury rather than a necessity. Regular access to women’s health care is largely unaffordable and inaccessible for most. Women lack knowledge of modern contraceptive methods with a majority of women still relying on abortion as their main method of birth control. Health care decision-making remains mostly in the hands of husbands or mothers-in-law. Lastly, domestic violence is prevalent and widespread, but still considered a private family matter and largely kept hidden. Perhaps one of the most prevalent health care problems is the current system of informal payments, which comprises a fundamental component of health care financing in most post-Soviet countries including Georgia and Azerbaijan. Without regular wages, physicians and other medical personnel consider informal payments or ‘gifts’ necessary for the continued existence of health care in Armenia. As a female gynaecologist explained, ‘Although there are legal provisions for free of charge health services, we all know about informal payments and that medical services are expensive in Armenia. If a person is not able to pay, he will still get treated, but it will be what one might call, “inadequate treatment.” ’ Accordingly, people do not go to the doctor because they cannot afford it, often resulting in the progression of their illness to an incurable state. The Ministry of Health’s 2000 Demographic and Health Survey confirmed that 40 per cent of women who had had

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a medical problem in the preceding twelve-month period had not visited a health care professional. Inadequate financial means was the primary reason.31 A lack of informed and independent health care decision-making also limits women’s access to reliable health care. According to the same Demographic and Health Survey, almost half (49.3 per cent) of unmarried women reported that someone else makes their health care decisions for them. Among married women, 20 per cent reported that their husbands make their health care decisions.32 One rural doctor recounted how some of her patients were not allowed to make their own decisions about whether or not to terminate a pregnancy: ‘When I worked as the director of the only polyclinic in our village, I often came across women who were treated disrespectfully by their husbands and even their mothers-in-law. When the matter concerned the right of a woman to terminate her pregnancy prior to the three-month mark, there was outrageous discrimination. The men decided everything. I even met women who begged me not to tell their husbands that they had had an abortion.’ A lack of information and access, especially in the area of contraception, is also a major issue in Armenia. Rather than leading to increased birth rates, however, uninformed and unreliable contraceptive methods have resulted in Armenia having one of the highest rates of abortion among the former Soviet republics, with one out of every two pregnancies resulting in an induced abortion.33 Violence against women is a widespread public health concern with severe consequences for the health and well-being of Armenian women. The United States Agency for International Development (USAID) and Armenia’s Ministry of Health partnered on a pilot programme called the Violence Against Women (VAW) Project implemented through PRIME II. Their research found that over a six-month period in 2004 almost one out of every three women (29.6 per cent) visiting a particular polyclinic in Yerevan reported having been a victim of domestic violence. Their research also found that both men and women have attitudes of tolerance towards ‘wifebeating’ and that most incidences of violence are never reported to legal authorities.34 Although Armenian law punishes physical assault through the Criminal Code’s assault and battery provisions, there are no legal provisions specifically proscribing violence against women.35 A female vice-president of the Association of Women with University Education elaborated: ‘Almost every third family faces this problem [domestic violence] but women are reluctant to make it public. Even though NGOs and international organizations do a lot of work in this area, these efforts are often in vain because there is no involvement by the state. The victims will never report these acts of violence to the police.’ Indeed while the incidence of domestic violence in Armenian society is believed to be widespread, few cases are reported to the police, and

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far fewer are brought to trial. Women are sometimes deterred from reporting domestic violence by the police investigators to whom they seek to complain. They fear reprisals from abusive husbands or other family members, and fear that the police will not take meaningful action and that they will be forced to reconcile with their violent spouse. In addition, women face social pressure to keep ‘family matters’ private and therefore not report such matters to the police.36 Moreover, even though there are battered women’s shelters in Yerevan today, many women, particularly those living in the rural regions where domestic violence is more widespread, find them inaccessible. As the president of a Yerevan-based women’s NGO explained, ‘The fact that “shelters” for battered wives are situated in the city make it very difficult for rural women to have access to this help. I think that a woman from a village would not have enough courage to abandon her family for several days to stay in “shelter” and then to go back.’ As such, equality in health care for women in Armenia involves a complex variety of interrelated factors including the lack of economic independence, some traditional cultural norms and poor access to information. These factors are important not only for a woman’s general well-being but also for her reproductive health and the health of her children.

Conclusion Adherence to and implementation of the principles espoused by CEDAW is of particular importance in developing countries such as the three South Caucasian neighbours. All three countries’ pro-European leanings, and goal of membership in the European Union, has led to significant legal reforms, at least on paper. As such, although each country may have clearly defined in writing a system based on the rule of law, wherein, as Carothers defines it, ‘laws are public knowledge, are clear in meaning, and apply equally to everyone’,37 the South Caucasus is still struggling to bring the reality on to the ground in each country in line with this vision. How each new democracy will begin to harmonize their specific realities with new legal reforms and the international treaties to which they are parties remains to be seen.38 In the area of women’s rights in the post-Soviet world, the obstacles to a rule of law-based belief in, and enforcement of, equality involves a combination of interrelated factors. Economic instability, a lack of viable employment options, the prevalence of ingrained traditional cultural norms, and the general feeling of pessimism about the future are among the challenges. Amidst this uncertainty, women have been forced to recreate themselves, and in doing so, some hopeful signs have emerged. In Armenia, for instance, there is the growing number of NGOs committed to improving the lives of women – with agendas ranging in subjects from combating domestic violence to awareness campaigns on women’s reproductive options to re-educating women in new fields of employment. By both working through

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and benefiting from the non-governmental sector, women are not only pushing an agenda of equality for themselves, but also working towards developing a larger civil society, democratic social consciousness and the rule of law. Perhaps the CEDAW Preamble best encapsulates the importance of gender equality in the development of the law in the South Caucasus: ‘the full and complete development of a country, the welfare of the world and the cause of peace require the maximum participation of women on equal terms with men in all fields.’

Notes 1. This chapter is based on research and interviews conducted from May–July 2004 by eighteen law students at the American University of Armenia Law Department. In alphabetical order they are: Araksya Aghayan, Astghik Ararktsyan, Elen Bejanyan, Gayane Davoyan, Suzana Gevorgian, Haykanush Hayrapetyan, Irina Hovhannisyan, Maritsa Hovhannisyan, Siranush Iskandaryan, Gohar Karyan, Anahit Khachikyan, Lilit Khayrabedyan, Parandzem Kostanyan, Louise Manukian, Kristina Margaryan, Hayarpi Melkonyan, Yekaterina Nersesyan and Natalya Stepanian. The author thanks these students for their tireless efforts and commitment to women’s rights in Armenia. The author also thanks the American Bar Association, Central European and Eurasian Law Initiative’s Yerevan-based staff, particularly Valentina Poghosyan and Karen Kendrick, for their support and for making their resources readily available. 2. Codes of Shahapivan (443 AD). 3. Criminal Code of Mkhitar Gosh (twelfth century). 4. The text of CEDAW is available at http://www.un.org/womenwatch/daw/cedaw/. 5. American Bar Association, Central European and Eurasian Law Initiative (ABA/CEELI), CEDAW Assessment Tool Report, Armenia ( July 2002), p. 4. 6. Ibid. at p. 8. 7. J. Mertus, ‘Human Rights of Women in Central and Eastern Europe’, American Journal of Gender and Law, 6 (1998), p. 372. 8. Information in the ‘CEDAW’ section from United Nation’s Convention on the Elimination of All Forms of Discrimination Against Women website at http://www.un.org/womenwatch/daw/cedaw/. 9. Supra note 5 at p. 1. 10. United Nations Development Program (UNDP), Women Status Report, Armenia (1999) (hereafter, Women Status Report). Available at http://www.undp.am/ publications/gender/wsr/Chapter_1/index.htm. 11. N. Tohidi, ‘Women, Building Civil Society, and Democratization in Post-Soviet Azerbaijan’, in K. Kuehnast and C. Nechemias, eds, Post-Soviet Women Encountering Transition: Nation Building, Economic Survival, and Civic Activism (Baltimore: Johns Hopkins University Press, 2004), p. 154. 12. Supra note 5 at p. 29. 13. Ibid. at p. 33. 14. A. Ishkanian, ‘Working at the Global–Local Intersection: the Challenges Facing Women in Armenia’s Nongovernmental Organization Sector’, in Kuehnast and Nechemias, supra note 11 at p. 285 (footnote 15).

Armenia’s Women in Transition 195 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34.

35. 36. 37. 38.

Supra note 5 at p. 32. Ibid. at p. 34. Supra note 14 at p. 264. Ibid. at pp. 268–9. Ibid. at p. 270. Supra note 11 at p. 153. Supra note 5 at p. 49. Ibid. at p. 50. UNDP, Women Status Report. Available at http://www.undp.am/publications/ gender/wsr/Chapter_1/index.htm. Supra note 5 at p. 54. Ibid. at p. 53. CIA Factbook (2002). Available at http://www.cia.gov. Supra note 5 at p. 41. Ibid. at pp. 42–3. Ibid. at p. 42. Ibid. at p. 43. Ministry of Health, Republic of Armenia, Demographic and Health Study (2000), p. 197. Ibid. at p. 40. Ibid. at p. 86. Ministry of Health/PRIME II (USAID), Violence Against Women (VAW) Project, Dissemination of Evaluation Results Conference, Yerevan, Armenia (29–30 June 2004). Minnesota Advocates for Human Rights, Domestic Violence in Armenia (2000), p. 3. Available at http://www.mnadvocates.org. Supra note 5 at p. 64. T. Carothers, ‘The Rule of Law Revival’, Foreign Affairs, 77 (2) (1998), pp. 95, 96. For an empirical look at the gap between human rights treaty obligations and practice, see O. Hathaway, ‘Do Human Rights Treaties Make a Difference?’, Yale Law Journal, 111 (2002), p. 1935.

11 Protecting Housing and Property Rights of the Displaced in Georgia Anneke Rachel Smit

Introduction This chapter will focus on the protection of housing and property rights of refugees and internally displaced persons (IDPs) in Georgia.1 Georgia suffered two ethnic conflicts shortly following its declaration of independence from the Soviet Union in 1991 – one in Abkhazia in western Georgia and one in South Ossetia on the Russian border. Both conflicts produced large numbers of displaced persons and left the regions administered by secessionist governments; however this chapter will focus mainly on the South Ossetian context. The conflict in South Ossetia was to a large degree born of the political stance of the Georgian government of the time, rather than of ongoing ethnic tensions. And following the conflict, at least until recently, relations have been quite civil between Georgians and Ossetians.2 It is perhaps surprising, then, that there has been relatively little progress on the return of ethnic Georgian IDPs to South Ossetia and ethnic Ossetian refugees and IDPs to Georgia proper. Further, in the absence of any widespread return (generally perceived by the international community as the preferred solution to displacement crises) there has also been very little integration of displaced persons into the communities within which they have sought refuge. One of the scapegoats for this lack of progress has been the failure of both the Georgian government and the South Ossetian authorities to deal in any effective way with the protection of housing and property rights of the displaced. A rule of law culture, as defined by Carothers, is one in which ‘universal’ human rights are protected. The right to (adequate) housing and the right to own property and enjoy it peacefully are fundamental rights protected by a wide variety of international and regional human rights instruments.3 The right to housing has a particularly strong legacy in the former Soviet republics, due to the entrenchment of the principle of ‘not a single homeless among us’ during the Soviet era. Carothers’ definition of the rule of law also invites 196

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consideration of law both ‘on the books’ and ‘on the ground’. After a brief overview of the South Ossetian conflict and the ongoing displacement produced as a result, the chapter will look at the protection of housing and property rights of IDPs and refugees in both of these contexts. While brief reference will be made to the situation within South Ossetia (Chapter 4 provides an overview of law in that territory), this chapter will deal mainly with the legal context within ‘Georgia proper’: that is, the area over which the Georgian central government can currently be said to exercise political control.

History of the conflict South Ossetia lies in the central northern part of the Republic of Georgia, occupying approximately one-sixth of its territory, and borders the Russian province of North Ossetia. According to the 1989 census (the last taken in the Soviet Union) the population of South Ossetia totalled approximately 98 000 people of whom approximately 66 per cent were ethnic Ossetian and almost 29 per cent Georgian. There were almost 99 000 ethnic Ossetians in Georgia proper. Tensions in South Ossetia leading to the present conflict began to ignite in 1989–90. Under Soviet rule, South Ossetia had the status of autonomous Oblast. However, Zviad Gamsakhurdia, Georgia’s first post-independence President, revoked the Oblast’s autonomous status in 1989. Other changes implemented at the same time, such as the closing of Ossetian-language schools in the region, increased separatist sentiments. Shortly after Georgia declared independence from the Soviet Union in 1991 violence broke out between Georgians and Ossetians. Hundreds died in the fighting and there was extensive damage to property. Approximately 60 000 persons, both ethnic Ossetian and Georgian, were displaced from their homes. About 17 000 ethnic Georgians from South Ossetia fled to Georgia proper, becoming IDPs. Close to 40 000 ethnic Ossetians from Georgia proper, meanwhile, fled mainly to North Ossetia, becoming refugees in the Russian Federation; a smaller number (approximately 3000) went only as far as South Ossetia.4 Active fighting ended with a ceasefire agreement signed in June 1992. The agreement also established the Joint Control Commission ( JCC) which provided for joint Russian, Georgian and Ossetian peacekeeping forces to be deployed in the territory. The ceasefire agreement, and the monitoring of the area by the JCC, has held for the most part since 1992. The Georgian government has maintained an unwavering claim to the territory of South Ossetia, but little progress on a political solution has been made to date. However, recent political developments, following the forced resignation in December 2003 of President Eduard Shevardnadze and the subsequent election of new President Mikhail Saakashvili, have brought changes to the Georgian political and social landscape, and the re-establishment of

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Georgia’s territorial integrity is high on the agenda of the new government.5 It has recently restored Georgian government control in one other fractious area, Ajaria,6 and is making efforts, through both political means and an increased Georgian military presence in the region, to do the same in South Ossetia.7 Meanwhile, these efforts have been met with great resistance by the Ossetian authorities.8 Currently governed by a President and Parliament elected in 2001 in elections which were internationally unrecognized but with wide participation, the South Ossetians have rejected all attempts to reincorporate the territory into Georgia. Clashes have broken out on several occasions throughout 2004, and there have been instances of new displacement, although to date these have proven to be temporary.9 A new ‘Peace Initiative for South Ossetia’, promising substantial autonomy for the region including the right to freely choose its own Parliament and Executive, was proposed by President Saakhashvili in January 2005.10 This too was quickly rejected by South Ossetian authorities.11 Although exact current figures for displaced persons in both South Ossetia and Georgia proper are not available,12 it is certain that return in both directions has been very limited. Within Georgia proper, the ongoing displacement gives rise to two sets of issues with respect to housing and property rights. First, many ethnic Ossetians who fled Georgia proper during the conflict remain without control of their property, much of which has now long been in the hands of ‘secondary occupiers’. The secondary occupiers are normally ethnic Georgians. Many are themselves displaced from South Ossetia or Abkhazia; they may also simply be opportunists or innocent third parties who have purchased property without knowledge of the true ownership. Second, ethnic Georgians who fled South Ossetia to Georgia proper during the conflict remain in a state of legal uncertainty. They are not in a position to return to their homes of origin for reasons relating not only to property but also security and economic and social conditions. At the same time, most are unable or unwilling to purchase private property in Georgia proper where they have taken refuge (and do not benefit from laws on privatization passed in the last decade), and those living in publicly provided shelter remain without any formalized legal right to the room(s) they have occupied for thirteen years.13 The next two sections of this chapter look at these issues affecting Ossetian and Georgian IDP populations, respectively.

Housing/property rights of ethnic Ossetian IDPs from Georgia The day-to-day housing needs of the approximately 43 000 ethnic Ossetian IDPs from Georgia proper have been, from a humanitarian perspective, the responsibility of the North Ossetian government and South Ossetian authorities (with the assistance of the international community) since they fled to

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these areas. The restoration of their previously existing property rights (‘property restitution’) in Georgia, however, is ultimately the responsibility of the Georgian government in cooperation with international agencies working on the subject. Despite ongoing discussion and some efforts, relatively little has been accomplished since the beginning of the ceasefire. In the absence of a systematic approach to restitution in Georgia, ethnic Ossetians who own (or possessed) houses or flats have made other attempts to reclaim their homes. As the following sections discuss, these attempts fall into two categories: applications to Georgian courts for a declaration of ownership/possession rights (and enforcement of such a decision to evict current occupiers), and private negotiation with current occupiers of the property. Unfortunately, neither has to date netted much success for the displaced person. Use of the courts There are no exact figures on the number of cases involving claims for the return of displaced ethnic Ossetians’ property which have been decided before the Georgian courts.14 Estimates, however, suggest that there have been only a handful of such cases.15 This is not surprising. For almost any litigant – regardless of ethnicity – the problems of obtaining a favourable (or even fair) outcome through the Georgian courts are countless: the corruption inherent in the Georgian judicial system – as throughout Georgian government and most aspects of Georgian business and society – has been well documented in Chapter 1 of this book and elsewhere.16 Convincing a judge to find in one’s favour in a Georgian court often has more to do with the size of a bribe paid to the judge, or the choice of a lawyer who knows how to work the system, than with the merits of one’s case.17 For ethnic Ossetians and members of other ethnic minority groups in Georgia, however, the challenges of obtaining a favourable result in court are multiplied.18 Most of the housing cases to date have been argued by one of the only three or four ethnic Ossetian lawyers qualified to practise in Georgia.19 Despite generally civil relations between Ossetians and Georgians in Georgia proper, ethnic minorities – including Ossetians – are less likely than ethnic Georgian lawyers to have the necessary connections to ‘work’ the judges.20 Financial resources, too, play an important role. Ossetians who have made claims before the Georgian courts maintain it was obvious judges were being bribed by the other party in their cases.21 One senior Georgian politician termed these hearings ‘housing auctions’: whoever can pay the judge more will have bought him- or herself a house or flat.22 Bribes aside, making a claim through the courts requires the financial means simply to pay lawyers and court fees. No state financial assistance is available to Ossetians to assist with housing cases. The Association of Ossetians of Georgia makes referrals to a lawyer willing to represent Ossetians in such cases; however, individuals

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must still come up with the funds to pay the lawyer themselves.23 If an individual cannot pay for legal representation, the Association may assist by arranging for free legal advice; it also sometimes appears before the court as a claimant’s non-legal representative but this is obviously less effective than having a lawyer to argue one’s case. The frustration felt by those attempting to gain access to their homes via the courts, and by those trying to assist them, is evidenced in the letterwriting and other lobbying undertaken in efforts to encourage the courts to find in their favour. The president of the Association of Ossetians has sent a series of letters to the governments of both President Shevardnadze and Saakashvili, as well as to the courts. These letters highlight what are perceived as particularly urgent cases and – ignoring the principle of separation of powers which dictates that the judiciary exercises its jurisdiction independently from any interference from the government24 – plea for immediate action. For example, a letter dated 1 June 2003 was addressed to both the chairman of the Georgian Supreme Court and to the Georgian Ministry of Special Affairs. It outlined five cases involving Ossetian claimants currently before Georgian courts and asked officials to ‘kindly pay attention to the cases depicted’ in the letter.25 One of the main challenges faced by claimants is the application by the courts of the ‘six-month vacancy rule’ of Article 69 of the 1983 Georgian Housing Code. Under Article 69 individuals residing in state-owned flats did so under grant of a ‘Housing Order’. Such an order could be revoked if the tenant was absent from the flat for more than six months without a justifiable reason. Forced displacement has not been considered to be one of these reasons, therefore many secondary occupiers have been able to have their tenancies sanctioned by the courts based on Ossetian IDPs’ absence from their flats for more than six months.26 Interestingly, Article 42, a prominent Western-oriented Georgian legal NGO with a mandate to protect the right to a fair trial in Georgia, has begun to represent the Georgian occupiers of homes owned or previously possessed by ethnic Ossetians. The basis of Article 42’s applications in court has been to claim that the (usually ethnic Georgian) secondary occupier of the property has over time acquired a legally enforceable right to the property; if a claim on this basis is unsuccessful then a request is made for a sufficient amount of time for the possessor to acquire new housing before being forced to leave.27 Georgia’s membership in the Council of Europe and accession to the European Convention on Human Rights in 1999, and its subsequent accession to Protocol 1 of the Convention in 2002 (adding new rights and undertakings, including the right to ‘the peaceful enjoyment of one’s possessions’, to the original list included in the Convention), has the potential to open another avenue to individuals wishing to make a claim related to housing rights in Georgia. Claimants who have exhausted all domestic mechanisms in seeking protection of their housing rights now have the possibility to take

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a case to the European Court of Human Rights in Strasbourg. The first Georgian case was heard by the Court in November 2003.28 Although no housing rights cases against Georgia have been brought before the Court to date, previous cases have dealt with similar claims against other member states of the Council of Europe. In Loizidou v. Turkey,29 for example, the Court heard a complaint from an ethnic Greek applicant who had been forced to leave her home in the northern part of Cyprus during the Turkish/Greek conflict in 1974 and had since been unable to return. The Court found a violation of Protocol 1, Article 1 of the Convention. At some point this provision may prove to be helpful to ethnic Ossetian IDPs whose property has not been restituted to them through the domestic courts. More practically, given the prohibitive cost for most Georgians of taking a case to Strasbourg, the hope would be that as a result of such an option becoming available the domestic Georgian courts would begin to take more seriously the IDP housing cases coming before them. To date, however, the Georgian government has shielded itself from such action: when it acceded to the first Protocol, it made several reservations relating to Article 1. The first of these reservations is that the article will not apply to IDPs until such time as the circumstances making them IDPs are resolved.30 Effectively, then, the Convention is of little use to IDPs until and unless a solution to the conflict is found. Such a reservation significantly lessens the impact of Georgia’s accession to the Protocol and brings into question the good faith of the government in respect of its European legal obligations. Private negotiation With little faith placed in the Georgian government and judicial system or international organizations to resolve their housing issues, some ethnic Ossetians have attempted to negotiate privately with the ethnic Georgians occupying their houses in Georgia. These cases are said to have been very few to date,31 and this is not seen generally as a desirable means of solving housing disputes. Undoubtedly some stories will have had happy endings, with individuals able to come to an agreement privately despite differing ethnic backgrounds and competing claims to a house (after more than a decade, the occupier begins to feel some claim to the house as well). Many cases, however, seem to lead to further problems. One story often told by ethnic Ossetians relates to an Ossetian widow who attempted to negotiate a solution with the Georgian occupying her house in Tbilisi. He reportedly promised her a flat in Vladikavkaz (North Ossetia) in exchange for her house in Tbilisi. However, when she went to Vladikavkaz she learned that the flat she was promised did not in fact belong to the Georgian man. The Georgian reportedly meanwhile came to Tbilisi with falsified documents and managed to register her house in his own name. The woman was left without a house or flat and now lives in a shed in the yard of her former house in Tbilisi.32

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Law on restitution The above-described context of informal arrangements and court hearings lacking in procedural guarantees and consistent applications of the law is obviously unsatisfactory, and there have been moves by the international community and the Georgian government to create a more unified, fair system. The right of return of a displaced person to his/her ‘home of origin’, and the corresponding right to property restitution, have received considerable attention internationally in recent years. Numerous documents have affirmed these rights, which may be seen to stem from the right to housing and the right to enjoyment of one’s personal property on one hand, and the right of return of a displaced person on the other.33 Efforts in Georgia have mirrored developments in more high-profile areas of international engagement – namely Bosnia-Herzegovina and Kosovo – where internationalized, quasi-judicial restitution structures have been established.34 As in those areas, attempts to create a law on restitution have been a cornerstone of efforts in Georgia to ‘solve’ the displacement crisis, in particular since 1998,35 in large part at the behest of the international community. There are problems inherent in tying the justifications for restitution to return in Georgia, since it is unclear that Georgian and Ossetian IDPs would actually return home even if their property was returned to them.36 However, even taking as a given that a law on restitution, if implemented properly, might have this desired effect, the move to create such a law has been rife with other legal challenges which reflect the current law-making climate in Georgia. Rule of law-related problems with the Georgian draft legislation on restitution may be broken down into three main categories: (i) there has been a serious delay in passing any version of the law; (ii) there are problems and gaps inherent in the text of the current draft law, particularly as concerns the legal basis for the determination of property claims; and (iii) there is an almost complete lack of information being passed to IDPs and refugees – the individuals most affected by a law on restitution – about developments in the drafting process. Delay The creation of a restitution mechanism is politically complicated in Georgia/South Ossetia. There are contested properties in both Georgia proper and South Ossetia. South Ossetia’s de facto independence means that in order to completely solve the restitution issue, there would need to be agreement between the two governments, or two separate mechanisms dealing with property claims on the respective territories. Further, international organizations play only an advisory role in Georgia, rather than a governing one as they do in some post-conflict areas (such as Kosovo and – to a certain extent – Bosnia). This means that the creation of a restitution mechanism, rather than simply being imposed by the international community as it was in Kosovo, must originate with the Georgian/Ossetian authorities

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themselves (though international organizations may lobby for such developments). Although the Georgian government (under both former President Shevardnadze and now under President Saakashvili), the South Ossetian authorities and international organizations working on displacement issues in Georgia have all continually stressed the need for restitution as a key means of encouraging IDPs to return, efforts have been slow in coming and to date unproductive. In 1998, an international expert on housing rights was contracted by the United Nations High Commissioner for Refugees (UNHCR) to prepare a report on housing and property restitution in the context of the Georgian/ South Ossetian conflict. After spending two months interviewing government and local and international organization actors as well as IDPs themselves, he called for the creation of a property restitution mechanism, stating that the lack of restitution was one of the major obstacles to IDP return in the region.37 The report contained a draft law on housing and property restitution which would create a ‘Housing and Property Claims Commission’ (HPCC) to function as a part of the Executive branch of the Georgian government.38 The HPCC would comprise five persons ‘of the highest integrity and to be responsible for the implementation, application, and oversight of the present law’.39 The HPCC envisaged by this first draft law was to have jurisdiction to make decisions on property claims made to it by ‘recognized’40 refugees and IDPs for their original homes, as well as for compensation claims for lost movable property. The geographical jurisdiction of the HPCC was not explicitly outlined;41 however, given that the HPCC was to be established within the Georgian government, at least de facto the Commission’s decisions would only be enforceable within Georgia proper. Decisions of the HPCC were to be binding, and appeal would be to the Supreme Court of Georgia or the Constitutional Court of Georgia as appropriate. An edited version of this first draft law was sent to the Georgian government, which prepared a revised draft. This draft was then reviewed by the OSCE, at which point the process stagnated.42 However, attempts to create a mechanism on restitution intensified in 1999, when a joint international and local NGO project looking at IDP issues in Georgia, Armenia and Azerbaijan revisited the draft law.43 A new draft was created, influenced heavily by the Commission for Real Property Claims (CRPC) in BosniaHerzegovina.44 This time a ‘Commission for Housing and Property Issues’, comprising nine members – three appointed by the Georgian President, three by ‘the Ossetian side’ and three by UNHCR – was proposed.45 The Commission’s jurisdiction would be limited to appeals from cases in which article 69 of the 1983 Georgian Housing Code has been applied (again seemingly limiting applicability to cases arising in Georgia proper). The year 2000 saw the creation of yet another draft law, with Georgian government involvement, and evaluation by an international expert. His

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report of June 2000 found that ‘establishing a Housing and Property Claims Commission is a legitimate and practical method of deciding restitution claims’46 but took issue with the grandiose plans for compensation proposed in the draft law.47 The draft was then discussed in a consultation process at the Council of Europe in Strasbourg in 2001, in which several international experts met with Georgian officials to discuss the possibilities for the law.48 Following the consultation, however, the process again stagnated owing to a lack of political interest and funding; since that time there has been little real progress. Georgian internal political problems49 were regularly blamed for the numerous delays.50 Late 2003 saw the revival of international efforts on the establishment of a restitution mechanism, as the UNHCR sought out assistance among its NGO partners in lobbying the Georgian government to move forward on the draft law.51 A senior member of Shevardnadze’s government, too, predicted that despite prior delays, the draft law would be put forward shortly after the parliamentary elections of November 2003.52 Those elections, of course, gave rise to the Rose Revolution, thereby stalling the process yet again. Throughout, then, there has been a consistent pattern of action spearheaded by the international community towards a law on restitution under the auspices of encouraging return (despite evidence to the contrary) and the Georgian government cooperating on a rhetorical level but doing very little concretely. ‘Months or years of silence’53 on the part of the Georgian government have followed each potential step forward. However, since the elections in early 2004 there has been a renewed flurry of activity. The new Georgian Ministry of Justice quickly requested of the Georgian Young Lawyers Association (GYLA) – a prominent NGO – a copy of their 2000 draft law.54 The Minister of Justice then requested the Venice Commission – the Council of Europe’s advisory body on constitutional issues – in August 2004 to prepare an opinion on the draft law. The opinion was released in October 2004;55 again the matter is in the hands of the government. The draft law has become part of its rhetoric for convincing the international community of its commitment to solving the South Ossetian conflict, and only time will tell whether the new government will manage to see the law through. The current draft law The problem with the draft law is not simply the failure of the government to get it passed, however. Even if the law were passed, as it presently stands there are major flaws. When the Venice Commission made its comments, for example, it remarked positively on the level of detail given with respect to procedural aspects of setting up a restitution mechanism. However, it expressed concern over the lack of refinement of the legal principles on the basis of which determinations would be made. These are not matters which can easily be left to be worked out later: there is no lack of complication in

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terms of the property issues a law on restitution in Georgia must deal with. As Leckie wrote in 1998: The shifting nature of the legal system in Georgia, particularly with respect to housing and property law, requires that creative means are found to adequately address the more complex legal problems created by a legal system in transition.56 The lack of comprehensive property registers, corruption in the registration system, and the privatization which has occurred in the last several years all significantly complicate the restitution process. Further, the haphazard application of laws by the Georgian courts, described above, in order to justify depriving rights-holding IDPs and refugees of their property leaves a wealth of difficult legal issues to be worked out. The Venice Commission commented particularly on the lack of rules in the draft law: the possibly competing nature of the interest of returnees and factual residents, […] important matters such as the conditions for reinstating a refugee or IDP to his original residence; the deadlines for leaving the residence and its restitution to the original resident; the manner in which the rights of the factual residents are protected; under which conditions they can be evicted; the conditions upon which factual residents can receive a new accommodation and/or compensation.57 Several other issues which have proven difficult in other post-conflict situations are left completely unaddressed in the draft law, for example the order in which claims will be determined. In Bosnia and Kosovo, suggestions that claims be dealt with in an order other than that in which they were received (to assist with programmes to encourage returns) were greeted with accusations of discriminatory practices.58 The passing of the draft law on restitution in its present form, then, would provide no guarantee that claims would be determined in a way which is fair, competent and efficient – as Carothers’ definition demands. Lack of information flow The rule of law requirement that laws be public knowledge also suggests a need for transparency in the actual process of legislating. This is at present a serious problem with actions on restitution in Georgia. While the government continues to raise the issue of restitution in speeches to the international community,59 information provision to the general public in Georgia and South Ossetia is very limited. Georgian and Ossetian IDPs in particular, who are directly affected by the law, seem to be told very little about how it is progressing or what it would mean to them.60 Rather, most IDPs express a lack of faith in the government’s ability or willingness to solve the

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housing/property problem. As one Georgian IDP from South Ossetia stated, ‘The government has gotten used to us being IDPs and so isn’t concerned to do anything about our situation now.’61 More than a decade after the ceasefire began, then, most ethnic Ossetians from Georgia proper still have no enforceable right to their homes of origin, in large part due to the Georgian government’s failure to follow through on its rhetoric. However, it would be too easy to blame this on ethnic divisions (i.e. the Georgian government’s lack of interest in its ethnic minorities). The housing rights of ethnic Georgian IDPs from South Ossetia have arguably been no better protected by the Georgian government, as outlined in the following section.

Ethnic Georgian IDPs from South Ossetia While there has been a wealth of legislation passed in Georgia to deal with the rights of ethnic Georgian IDPs, there have been serious problems mainly in the areas of implementation and public knowledge of laws. Further, laws of general application are in some cases drafted to exclude applicability to IDPs and in others have been applied so as to exclude IDPs; particularly in the area of privatization this may have serious long-term effects for the displaced. Finally, IDPs living in rooms provided by the state have no formalized legal right to their housing, other than initial permission to take shelter there. There is no security of tenure and families live with a (justified) constant fear of being evicted. Georgian IDPs are the responsibility of the Georgian Ministry of Refugees and Accommodation, formed in October 1992. The current housing situation of this group varies: a small number at present lives in private accommodation and some reside with family members and friends. Like their ethnic Ossetian counterparts in South Ossetia, however, approximately half have since 1991–2 been housed in collective centres (also sometimes referred to as ‘refugee hotels’). Of those who live in private accommodation, some avoided the collective centre experience altogether, having fled South Ossetia with the financial resources or political connections necessary to ensure they could obtain their own housing. Others first entered a collective centre or stayed with family members and over time have been able to save enough money to buy a flat, house or land. Those who reside with family or friends generally have done so since 1991–2, with the situation growing increasingly tiresome for both host and guest. Georgian hospitality is legendary for its warmth and generosity; nonetheless thirteen years is far longer than most imagined their guests would stay. However, the lot of IDPs who have continued to reside in collective centres is more dire. Georgians fleeing South Ossetia in 1991–2 were registered as IDPs as they arrived in Tbilisi. This status conferred remains key to this day,

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as housing, financial assistance and rights to other benefits depend on this classification. Once an individual or family was registered, if they required shelter they were sent to one of the centres allocated for such purposes. These buildings included hotels as well as other public buildings such as hospitals, sanatoriums, schools and hostels. At the collective centres a room was allocated to them. Officially at least, each room within a particular collective centre was the same and there was no room for negotiation about which room a family would occupy. Initially each family in a given collective centre was allocated approximately the same amount of space regardless of the number of family members.62 The quality of accommodation provided in the various collective centres did and continues to vary – in some centres each room has its own toilet, for example, whereas in others families must share a single toilet on each floor.63 Legal framework Since 1992 almost 200 pieces of legislation have been enacted to deal with the status and rights of IDPs from South Ossetia and Abkhazia (approximately seventy of these deal exclusively with IDPs from Abkhazia).64 The key document is the Law of Georgia on Internally Displaced Persons,65 enacted in 1996, and its amendments. The rights of IDPs protected under the legislation include the right to receive state allowances, the right to a discount on utilities and transportation, the right to a pension for the elderly and those who fought for Georgia in the conflicts, the right to free education in public schools, and the right to free medical care. Two provisions in the Law relate specifically to the protection of IDPs’ housing and property rights in Georgia proper. According to article 5(2), IDPs are entitled to a ‘place for temporary residence … according to standards established for Georgia’. The same section also provides for the allocation of land plots to IDPs for temporary use. A related provision also guarantees the right of IDPs to receive a monthly lump sum payment, which at present is 11 Lari per month (approximately £3) for those living in collective centres and 14 Lari for those in other accommodation, reflecting the fact that utilities in collective centres are paid by the state. There have been two notable international attempts to assess the Georgian laws relating to IDPs. The first was a Brookings Institution project which, in addition to drafting a proposal for a law on IDPs, also produced an analysis of compatibility of Georgian laws on IDPs with the United Nations’ Guiding Principles on Internal Displacement.66 Then in 2003 a study of the complete legislative framework affecting IDPs in Georgia was undertaken jointly by the United Nations Development Programme (UNDP), the United Nations Office for the Coordination of Humanitarian Affairs (UN-OCHA) and the Georgian Governmental Working Group on IDPs, under the auspices of the ‘New Approach to IDP Assistance’.67 The study purported to be ‘the first attempt to review and analyse all normative acts related to IDPs’ rights’.68

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Both studies looked not only at the legislation on paper but also at how it was being implemented ‘on the ground’. The legislation on IDPs is to an extent unrefined or lacking in detail (partly a result of the fact that the newly independent Georgian government had so early in its mandate to address the needs of almost 300 000 internally displaced persons). However the larger rule of law challenge with respect to these laws is not so much the state of the laws ‘on the books’; rather, it is the failure of the Georgian government to fully implement the laws, and the lack of awareness of the populations concerned about what the legislation actually says, which are causes for concern. Failure of implementation The quality of accommodation provided to IDPs in collective centres is a prime example of the Georgian government’s failure to fully implement laws on IDPs. Rooms are tiny, cold and not regularly maintained. While many other Georgians also live in housing which is less than desirable, presumably this is not what was envisaged by ‘housing … according to the standards established for Georgia’ as stated in the Law on IDPs. Lack of implementation is also a problem with respect to the allocation of land plots. While reportedly most local authorities are aware of the right of IDPs to be allocated a plot for temporary use,69 actual allocation is not widespread. The then-Deputy Minister of Refugees and Accommodation indicated in September 2003 that approximately 4000 hectares of land had been allocated for this purpose (for IDPs from both South Ossetia and Abkhazia), with families from South Ossetia being allocated land primarily in Kareli region near the Georgia/South Ossetia border, but precise records of land allocation are not readily available.70 Further, even when land is provided to IDPs, it is reportedly often of poor quality and therefore of little use for cultivation.71 Monthly allowances, too – meagre to begin with – are often in arrears, with IDPs not receiving payments for months at a time.72 As with government pensions, the new government may improve the reliability of payments, but this remains to be seen. Lack of public knowledge of rights In addition to legislation targeted specifically at IDPs, most Georgian legislation of general application applies on paper to IDPs in the same way it does other members of the population. This satisfies, prima facie, Principle 1 of the Guiding Principles on Internal Displacement which states that ‘Internally displaced persons shall enjoy, in full equality, the same rights and freedoms under international and domestic law as do other persons in their country.’73 However, lack of information flow to IDPs means that they often do not have a clear understanding of what their rights are. Carothers’ definition begins, ‘the rule of law can be defined as a system in which the laws are

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public knowledge, are clear in meaning, and apply equally to everyone.’ IDPs’ lack of knowledge has been a problem in several areas. One particularly troublesome area is the right to acquire property, and the effect that such acquisition may have on one’s IDP status (as described above, this status is crucial in Georgia because of the benefits which stem from official recognition). The confusion stems from the interplay between the acquisition of private property and the issue of registration. Many IDPs have been told that if they purchase private property in Georgia proper they will have to register there, and by doing so they know that they will lose their status as IDPs. The result has been that for years IDPs wanting to purchase property have done so in the name of someone else, thereby leaving themselves reliant on the goodwill of those in whose name the property has been purchased. Further, some IDPs who have purchased property have continued to live in the collective centres rather than their own property, in part due to this fear of losing their status should they venture out on their own.74 This action, however, is based on misinformation. The Study on IDP Rights states, ‘In everyday life, IDPs often come across persons who, despite working on IDP related legal issues, still are not well informed about existing opportunities for IDPs to purchase real estate and get temporary or permanent registration’75 (though the report is not clear whether the persons disseminating misinformation are internationals, Georgians, or both). The Law of Georgia Governing the Rule of Registration and Identification of Georgian Citizens and Aliens Living in Georgia is clear that private property ownership and registration are two separate issues. One need not necessarily register in the place where one has purchased property. IDPs, therefore, will not lose their IDP status upon the purchase of property in another area of Georgia than that from which they fled.76 In November 2003 the situation was further simplified legally: the Constitutional Court of Georgia issued a decision finding unconstitutional the loss of IDP status following registration in Georgia proper as resident. The Parliament of Georgia then removed article 6(2)(c) of the Law of Georgia on Displaced Persons which had caused the lack of certainty.77 This may begin to make a small difference to the decision-making of IDPs, but until recently has been a significant barrier to their exercising their right to acquire property. Exclusion from applicability of property laws There are also some notable exceptions to the universal applicability of laws with respect to property rights. These areas, in which IDPs have been excluded from opportunities available to other Georgian citizens, have the effect of putting them at an economic disadvantage in both the short and long term. Since the early 1990s the Georgian government has been involved in an active programme of land and flat privatization. Pursuant to Resolution #107 of Cabinet of Ministers on Privatization (Free of Charge Transfer) of

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Apartments in the Republic of Georgia,78 Georgians with the right of possession of a state-owned flat in urban areas were granted – free of charge as the title implies – ownership of their flats. However, no such possibility was extended to IDPs to privatize the collective centre rooms they were inhabiting. Since a privatization process has also taken place in South Ossetia, in which some ethnic Georgians’ property has been privatized without their participation and often into the name of the Ossetian occupant, IDPs have been disenfranchised twice over. In September 2003 the Georgian Acting Minister of Refugees and Accommodation claimed that any IDPs who wished to privatize their rooms had the right to do so, as long as they were prepared to pay market price.79 However, there appears to be have been no legal basis for this suggestion. Further, to require IDPs to pay market price, when others were granted ownership free of charge, would be discriminatory. IDPs’ lack of ownership rights over collective centre space is discussed more fully in the next section. Land, too, has been privatized without the participation of IDPs. Under the Law on Ownership of Agricultural Land (1996) all Georgian citizens were eligible for a grant of a minimum of 0.25 hectares of land without charge. IDPs in most cases received nothing, however.80 In the few cases where they did manage to lobby local authorities for land, they often ended up with the ‘left-overs’ of the privatization process – the least desirable or least cultivable land. Having been unable to participate to advantage in this privatization programme IDPs will be at a permanent disadvantage economically as they have been denied entry into Georgia’s developing land market system on a par with other Georgian citizens. Lack of formal legal rights/security of tenure Finally, Georgian IDPs living in collective centres struggle with a lack of security of tenure over the rooms they have inhabited for more than a decade. Although some IDPs have described the environment in collective centres as village-like in that everyone knows and takes care of each other, life remains far from ideal and most IDPs still dream of the day when they no longer have to live in such conditions. As one IDP stated, ‘Here we have one room for four people. In Tskhinvali we had a whole house – our room here is the size of our former kitchen and we all have to live together in it.’81 But for most, return to South Ossetia is not considered feasible for the moment, if ever. Further, given prohibitive housing prices, particularly in Tbilisi, as well as concerns (discussed above) about losing one’s IDP status, most are not in a position to buy new housing in Georgia proper. Due to these factors, the collective centres have become ‘home’ for the moment, and it is obvious that in both emotional and practical ways the rooms are being treated as properties over which residents hold (informal) rights. This is obvious even from the outside of collective centres. For several years following the war, blue tarps were strung along many balconies of the

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former hotels now housing IDPs. These tarps allowed residents to make use of balcony space for storage or cooking, for example, and significantly increased the area available to a family. Recently, however, a new phenomenon has become visible: gradually the tarps are disappearing and being replaced with walls as the balconies have been closed off to form proper rooms.82 Inside, too, rooms have been personalized as families have painted walls or hung wallpaper, and hung paintings or mementoes.83 The one family–one room standard has shifted significantly to the point where a single family may have as many as three rooms. The extra rooms have generally been acquired either by an informal grant by a family leaving the collective centre – for example to move into purchased housing – or may even have been ‘bought’ from such a family: there is reportedly an active market in the sale of collective centre rooms.84 The sale of rooms in collective centres to non-IDPs, too, has been reported.85 Some rooms now stand empty while their former occupiers live in new accommodation yet hold on to their allocated housing. In the shadow of this informal activity, however, is always the knowledge that ultimately these buildings belong to the Georgian government.86 This has several implications for IDPs. First, without formalized property rights to their rooms, IDPs cannot sell them legally. Purchase prices for illegal sales are reportedly very low in comparison with market real-estate prices in the same cities – owing, say IDPs, to the lack of certainty inherent in such a sale. There is no security of tenure and therefore no guarantee that an individual who ‘buys’ a room will be able to live there long term or resell it. Second, collective centre residents cannot use their rooms as a financial asset in order to increase their wealth. In a treatise which has come to shape much of the international community’s approach to housing rights protections in recent years, de Soto writes: [A] formal property representation such as a title … represents the nonvisible qualities which have potential for producing value. They are not physical qualities of the house itself but rather economically and socially meaningful qualities … attributed to the house (such as the ability to use it for a variety of purposes that may be secured by liens, mortgages, easements and other covenants).87 De Soto argues that the lack of property rights ‘on paper’ is a key reason why the poor and dispossessed remain poor – without formalized rights to their property they are unable to rise beyond their financial destitution. Applying this argument to collective centre residents, unless and until they are awarded formal property rights to their rooms, residents remain excluded from full enjoyment of the financial benefits which formal title-holders may derive from their property and the possibilities for them to increase their financial status are severely limited.

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Finally, IDPs live with the constant knowledge that they may be evicted at any time. Rumours have for years spread throughout the collective centres of a particular building being sold to a private investor who will evict all the IDPs.88 A Georgian presidential decree of January 2002 purports to severely restrict the rights of the owner of a newly privatized building to evict IDPs who reside there: according to the law IDPs may not be evicted before there has been a settlement of the conflict unless alternative accommodation is provided, there is agreement with the occupants, the occupants are fully compensated, or the occupants are illegally occupying the premises.89 When I interviewed IDPs in collective centres in Tbilisi in September 2003, however, many expressed concern that they would eventually be evicted with fewer protections than the law envisaged.90 These fears have proven to be justified to an extent: in autumn 2004 the Hotel Iveria, a former luxury hotel in the centre of Tbilisi which had housed hundreds of ethnic Georgian IDPs from Abkhazia since 1991, was privatized. The hotel was sold to German investors for US$2.3 million as part of an active programme of privatization embarked upon by the new Georgian government.91 The Georgian economy minister has been quoted as saying that on the place where the Iveria now stands will be ‘either a Four Seasons hotel, or maybe commercial office space’.92 The IDPs were asked to sign an agreement to receive $7000 in compensation in exchange for leaving the building. Most IDPs signed; however, many stated that they felt they had no choice in the matter and felt they were being forcibly displaced once again since $7000 would not buy an apartment in Tbilisi.93 In many cases only twenty-four hours’ notice was given for families to leave the hotel, and the government has been accused of strong-arm tactics, such as turning off the electricity in the hotel for all but two hours per day, to force residents to leave.94 The move to privatize is picking up momentum – the Hotel Adjara, also in the centre of Tbilisi, was emptied six months after the Iveria, with residents offered the same amount of compensation.95 The amount, however, was offered only to families who were registered in a particular room; in many cases several families were sharing a room, and these families have been offered only $1000 to leave. A competing programme, headed by the Privatization Working Group (PWG) of the UNDP IDP New Approach Support Unit, is lobbying the Georgian government to allow IDP families to privatize their own rooms. The Group seeks to: improve the living conditions of IDPs by supporting efforts to promote ownership rights of their accommodations [in collective centres] as well as protect their right to shelter throughout the implementation of the government’s overall privatization strategy.96 The PWG asserts that the most desirable option would be to allow IDPs to privatize their rooms according to the 1996 law under which other Georgian

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citizens gained ownership of their flats. Other options proposed are the charging of nominal fees to IDPs for their rooms, and the conclusion of a contract between the Georgian government and an international organization which would implement the privatization. The plan, however, avoids standing in the way of the government’s larger privatization scheme, suggesting that only buildings which are not being privatized in their entirety to outside interests (such as the Hotels Iveria and Adjara) be considered.97 Such an approach would build on Armenia’s experience: implementing provisions of the Law on Legal and Socioeconomic Guarantees for Refugees from Azerbaijan (2000), since 2002 the Armenian government has permitted limited numbers of ethnic Armenian refugee families from Nagorno-Karabakh to privatize the dormitory rooms they occupy.98 The Georgian Discussion Paper was sent to Ministries of Conflict Resolution, Economic Development, and Refugees and Accommodation in December 2004, with no immediate response.

Conclusion The forced displacement of more than 300 000 persons presented the government of newly independent Georgia with an enormous legal challenge in the first years of its authority. Evaluation of efforts made to deal with the housing and property rights of this group of individuals must fairly take account of the inexperience of the government at that point. However, more than a decade on there remains a plethora of gaps, due to failures to legislate and failures to implement, in the treatment of these most vulnerable groups of individuals. Despite the international community’s repeated calls for action and assurances by the new Georgian government that the situation will improve, both Georgian and Ossetian IDPs see little improvement, and are losing hope that much will change. Durable solutions – either return to their homes of origin or meaningful integration in local communities – still seem far off, and the Georgian government’s approach to the protection of housing and property rights only reinforces the status quo.

Notes 1. Research funding from the School of Law, University of Reading, and the Harold Hyam Wingate Foundation is gratefully acknowledged. The views expressed in this paper are solely those of the author. 2. Interviews with ethnic Georgian IDPs at collective centre, Tbilisi, 5 September 2003; ‘We don’t want war, but … : Resolve and Regret in a Reluctant War Zone’, The Economist (19 August 2004). 3. For example the International Covenant on Economic and Social Rights (UN Doc. A/6316 [1966], 993 U.N.T.S. 3), article 11(1), the Universal Declaration on Human Rights (UN Doc A/810 at 71 [1948]), article 17, and the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) Protocol 1 (C.E.T.S. No. 009 [1952]), article 1.

214 The State of Law in the South Caucasus 4. ‘Housing and Property Restitution Issues in the Context of Return of Refugees and IDPs to South Ossetia and Georgia Proper’, paper produced by UNHCR Tbilisi (June 2002), p. 1 (copy on file with author). 5. In his address to the United Nations General Assembly in September 2004 President Saakashvili proclaimed, ‘We will peacefully reincorporate South Ossetia and Abkhazia so that all citizens of Georgia can share in the fruits of our success’ (‘Remarks on the Occasion of the 59th Session of the UN General Assembly, H. E. Mikheil Saakashvili – President of Georgia, September 21, 2004’, available at www.un.org). 6. See I. Torbakov, ‘Whither Saakashvili’s Reunification Efforts in Georgia?’ (17 May 2004); A. Van Oss, ‘Georgia Strives to Burnish Image During Adjaria Crisis’ (29 April 2004), both Eurasia Insight, available at www.eurasianet.org. 7. See J. Devdariani, ‘New Peace Process Needed for South Ossetia’ (27 July 2004), Eurasia Insight, available at www.eurasianet.org. 8. See S. Rainford, ‘South Ossetians Remain Defiant Under Fire’ (20 August 2004) BBC News World Edition, available at www.news.bbc.co.uk. 9. President Saakashvili termed those who fled conflict zones in South Ossetia in August 2004 ‘temporarily displaced persons’ and declared they were ‘on holiday’ in government-sponsored resorts in Georgia proper, thereby avoiding an acceptance that the renewed conflict had produced a new wave of IDPs: see T. Freese, ‘South Ossetia Journal, Part I: Conflict Zone Residents Begin to Return’ (8 September 2004) Central Asia-Caucasus Analyst, available at www. cacianalyst.org. 10. ‘Remarks of the President of Georgia H.E. Mikheil Saakashvili to the Parliamentary Assembly of the Council of Europe’ (26 January 2005), available at www.mfa.gov.ge. 11. ‘South Ossetia rejects Georgia’s peace offer’ (26 January 2005), available at www.rustavi2.com. 12. Georgian ministry sources put the number of ethnic Georgian IDPs from South Ossetia at approximately 12 000, while UNHCR in Tbilisi estimates the number to be just under 9000 (interview with Georgian Acting Minister of Refugees and Accommodation, 22 September 2003); ‘Table: Population Movements as a Consequence of the Georgian-Ossetian Conflict’, UNHCR Tbilisi, updated 31 July 2003; see also ‘Housing and Property Restitution Issues’, supra note 4 at p. 1. The Georgian Ministry of Refugees and Accommodation, in cooperation with UNHCR, began a new IDP registration process in November 2004, the first since 1996; this will provide more accurate figures. 13. Legally these two issues are discrete and concern different groups of individuals. Politically, of course, they are linked. Treatment of displaced persons will inevitably involve an element of reciprocity. 14. UNHCR’s Tbilisi office keeps some data but this is not exhaustive – they have simply followed a few cases in the courts in Georgia proper and South Ossetia. 15. Interview with president of Georgian minority rights NGO, Tbilisi, 20 September 2003; also telephone interview with same, 17 February 2005. 16. C. P. M. Waters, Counsel in the Caucasus: Professionalisation and Law in Georgia (Leiden: Martinus Nijhoff, 2004). 17. Ibid. at p. 109. 18. Ibid. at pp. 41, 86, 123. 19. Telephone interview, supra note 15. 20. Members of ethnic minority groups are under-represented in the Georgian legal profession (supra note 16 at p. 123).

Housing and Property Rights in Georgia 215 21. Interview, supra note 15. One ethnic Ossetian lawyer working on housing cases in Tbilisi reports having written to the chairman of the Georgian Supreme Court stating in her letter that it was clear judges were being bribed in these cases (interview, Tbilisi, 20 September 2003). 22. Interview with senior Georgian politician, Tbilisi, 22 September 2003. 23. Interview with ethnic Ossetian claimant, Tbilsi, 20 September 2003; telephone interview, supra note 15. 24. See article 82 of the Georgian Constitution. 25. Letter provided by president of Association of Ossetians of Georgia; English translation on file with author. 26. See S. Leckie, ‘Housing and Property Restitution Issues in the Context of Return to and within Georgia: an International Legal Perspective’ (UNHCR Report) (7 July 1998) (unpublished, copy on file with the author), p. 8. 27. Interview with senior staff member of GYLA, Tbilisi, 11 September 2003. 28. Assanidze v. Georgia, decision of the European Court of Human Rights (Application No. 70513/01), 8 April 2004. 29. Loizidou v. Turkey, decision of the European Court of Human Rights (40/1993/435/514 [18 December 1996]). 30. ‘Reservation contained in the instrument of ratification deposited on 7 June 2002’, available at http://conventions.coe.int. 31. Telephone interview, supra note 15. 32. Interview, supra note 15. 33. See for example: ‘Housing and property restitution in the context of return of refugees and displaced persons’, Resolution of the United Nations Sub-Committee on the Promotion and Protection of Human Rights, E/CN.4/Sub.2/Res/1998/26 (26 August 1998). 34. On restitution in Bosnia and Kosovo see, for example, L. Hastings, ‘Implementation of the Property Legislation in Bosnia Herzegovina’, Stanford Journal of International Law, 37 (2001), p. 221; M. Cox and M. Garlick, ‘Musical Chairs: Property Restitution and Return Strategies in Bosnia and Herzegovina’, in S. Leckie, ed., Returning Home: Housing and Property Restitution Rights for Refugees and Displaced Persons (Ardsley, NY: Transnational Publishers, 2003), p. 65; H. Das, ‘Restoring Property Rights in the Aftermath of War’, International and Comparative Law Quarterly, 53 (2004), p. 429; A. R. Smit, ‘Property Restitution and Ending Displacement in Kosovo: Coordinated Effort or at Cross-Purposes?’, Northern Ireland Legal Quarterly, 55 (2004), p. 182. 35. 1998 was named the ‘Year of Return’ by then-Georgian President Shevardnadze and South Ossetian leader Ludwig Chibirov. That year OSCE also coordinated the first joint international initiative to advise the Georgian authorities on the restitution issue (‘Annual Report 1998 on OSCE Activities’, Organization for Security and Cooperation in Europe [2 December 1998] at pp. 16–17, available at www.osce.org). 36. This will not be explored in detail in this chapter but is a problem common to displacement crises in numerous post-conflict situations. See, for example: W. Englbrecht, ‘Bosnia and Herzegovina, Croatia and Kosovo: Voluntary Return in Safety and Dignity?’, Refugee Survey Quarterly, 23 (3) (2004), p. 100. 37. Supra note 26 at p. 2. 38. The use of the same terminology in Kosovo in 1999 – HPCC – is not coincidental: the same housing rights expert was heavily involved in the creation of Kosovo’s HPD/HPCC. 39. Article 6(1).

216 The State of Law in the South Caucasus 40. The term ‘recognized’ is not defined in the draft law. 41. The draft law simply states that it would apply to individuals ‘displaced as a result of the Georgian-Ossetian conflict’. 42. Email correspondence with S. Leckie, 24 March 2004. 43. This project was spearheaded by the Brookings Institution/SAIS Project on Internal Displacement and the OSCE. The local Georgian partner was the Georgian Young Lawyers’ Association (GYLA), a Western-oriented NGO favoured for cooperation with Western organizations. 44. Law of Georgia on Restitution of Housing and Property to the Victims of the Georgian–Ossetian Conflict (Draft) (English language copy provided by GYLA – on file with author). Lawyers from GYLA made a study trip to Bosnia already in 1998 to look at the legislative framework and the principal documents were translated into Georgian (interview with GYLA staff lawyer, Tbilisi, 10 December 2002). 45. Ibid., article 6 (2). Note that article 8’s requirement that all members be Georgian citizens would seem to apply even to those appointed by the UNHCR. 46. See M. Cox, ‘Law of Georgia on Restoration and Protection of Housing and Property Rights of Refugees and Internally Displaced Persons: Review of May 2000 Draft’ (7 June 2000), paper prepared for OSCE/Council of Europe (copy on file with author). 47. This point was forcefully criticized by a senior member of President Shevardnadze’s government in September 2003, who complained, ‘There was one thesis to this study: “Why do Georgians want so much ?” ’ (supra note 22). 48. Ibid. 49. See ‘Georgian Government Goes, President Stays’ (1 November 2001), On-Line Pravda, available at www.pravda.ru. 50. Supra note 22. 51. Supra note 15. 52. Supra note 22. 53. Supra note 44. 54. Email communication with senior staff member of GYLA, 24 January 2005. 55. ‘Opinion on the Draft Law on Restitution of Housing and Property to the Victims of the Georgian-Ossetian Conflict of the Republic of Georgia’ (CDL-AD [2004]037), adopted by the Venice Commission, 60th Plenary Session (8–9 October 2004), available at www.venice.coe.int. 56. Supra note 26 at p. 16. 57. Supra note 55 at para 32. 58. Philpott, supra note 36 at p. 12; telephone interview with former senior staff member of the Office of the High Representative of the United Nations in BosniaHerzegovina, 23 January 2004. 59. Supra note 10. 60. Interviews with Georgian and Ossetian IDPs in Tbilisi, Gori and Tskhinvali collective centres, September 2003. Some IDPs asked me whether I knew if there was a law on restitution yet. 61. Interview with female Georgian IDP, mid-40s, collective centre, Tbilisi, 5 September 2003. 62. Interviews with Georgian IDPs at two collective centres (Tbilisi, 5 September 2003 and Gori, 16 September 2003). 63. Observations at collective centres in Tbilisi and Gori, September 2003. 64. For a near-complete list of the legislation passed to 2002, see IDPs Reference Book (Tbilisi: UNHCR, Ministry of Refugees and Accommodation of Georgia, and Association Migrant, 2002), pp. 307–22.

Housing and Property Rights in Georgia 217 65. Law of Georgia on Internally Displaced Persons, English translation published ibid., p. 322. 66. R. Cohen et al., eds., The Guiding Principles on Internal Displacement and the Law of the South Caucasus: Georgia, Armenia, Azerbaijan (Washington, DC: American Society of International Law, 2003) (Studies in Transnational Legal Policy No. 34). 67. ‘What is the New Approach?’ draft document produced by New Approach to IDP Assistance, 1 February 2005, p. 1 (copy on file with author); Study on IDP Rights (December 2003) United Nations Development Programme (UNDP), available at www.undp.org.ge. 68. Study on IDP Rights, ibid., at p. 3. 69. Ibid. at p. 12. 70. Interview supra note 12. 71. Study on IDP Rights, supra note 67. 72. Interviews supra note 1. 73. Guiding Principles on Internal Displacement (1999), available at www. ochaonline.un.org. 74. Interviews, supra note 1. The decision to remain living in the collective centres is reportedly also due to an inability to afford utility payments in the purchased flats. 75. Study on IDP Rights, supra note 67. 76. Article 2(3) states that ‘being or not being registered should not restrict constitutional rights and freedoms of citizens of Georgia and aliens living in Georgia, including limiting rights of property or the provision for their implementation, unless envisaged by the election legislation.’ 77. The subsection stated that IDP status is lost if an IDP permanently settles and registers in a region of Georgia other than their area of origin. 78. Dated 1 February 1992. 79. Interview, supra note 12. 80. Interview with J. Ebanoidze, Association for the Protection of Landowners’ Rights (APLR), Tbilisi, 4 September 2003. 81. Supra note 61. 82. Supra note 63. This phenomenon can also be witnessed in the ‘hotels’ in the centre of Tbilisi which are mainly inhabited by Georgian IDPs from Abkhazia. 83. Communal areas have not received the same attention – hallways are dark with no working electricity and former communal lounge areas have carpet in tatters and half-destroyed walls. 84. Interview with President of IDPs Association, collective centre, Tbilisi, 21 September 2003. 85. Study on IDP Rights, supra note 67 at p. 27. 86. Interview with president of IDPs Association, collective centre, Tbilisi, 3 September 2003. 87. H. de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Transworld: London, 2000), p. 49. 88. Interviews, supra note 2. 89. Georgian Presidential Decree #5, ‘On Measures for Registration of Refugees and Internally Displaced Persons and Providing Social Security, Allowances, Humanitarian and Other Kinds of Assistance’. 90. Interviews, supra note 2. 91. A. Remtulla, ‘No Vacancy at the Iveria Hotel’ (20 August 2004), CBC News Viewpoint, www.cbc.ca. See also ‘Recently closed sales’ on the Georgian government’s privatization website: www.privatisation.ge.

218 The State of Law in the South Caucasus 92. E. E. Arvedlund, ‘An Oligarch Goes Home to Lift Georgia’s Economy’ (5 November 2004) New York Times, p. W1. 93. T. Lobzhanidze, ‘Georgian Refugees Face Eviction’ (25 August 2004), Caucasus Reporting Service No. 248, available at www.iwpr.net. 94. Ibid. 95. Email communication with Coordinator of New Approach Support Unit staff member, 21 and 23 February 2005; see also: A. Brard, ‘Georgian Refugees from Breakaway Republic Face Eviction in Tbilisi’ (4 February 2005), Agence FrancePresse, available at www.reliefweb.int. 96. ‘Collective Center Privatisation Justification and Mechanisms’, Working Paper of the IDP Collective Centers Privatization Working Group (14 December 2004) (copy on file with the author). 97. Ibid. at p. 7. 98. See ‘33 Refugee Families Get Privatization Certificates’, United Nations Department of Public Information Bulletin, 13 (2002). Available at www.undpi.am/ bulletin/bul_13/unhcr.html. See also ‘Report on Armenia’, European Commission against Racism and Intolerance (Strasbourg: Council of Europe, 2003), para 32. Available at http://www.coe.int.

Index Abashidze, Aslan 24, 33, 36 Abkhazia 24, 30–2, 34, 59, 196, 198 accountability 4, 6–7, 12, 16, 17 accounting practices 119 acquittals 12, 84 advocates (see lawyers) Ajaria 30–1, 33–4, 36, 198 Aliyev, Heydar 9, 15, 53 Aliyev, Ilham 20, 53 American Bar Association 67, 81, 90, 102 Aral Sea 150 armed conflict 6, 61–2, 66–7, 72, 161, 197–8 Armenian diaspora 153, 159–60 Armenian National Movement 11 ArmenTel (see telecommunications) Armitage, Richard 50 Artsakh University 68 Association of Ossetians of Georgia 199–200 authoritarianism xiv, 3, 145–6 Azerbaijan State Oil Academy 105 Azerbaijan State Students Admission Commission 104 Azerbaijan University 106 Azerbaijan Young Lawyers Union 91 Azerbaijani Committee for the Protection of Journalists 53 Baku 50, 86, 136 Baku State University 104–5, 106 Baku–Tbilisi–Ceyhan Pipeline 51, 163, 165, 167–8 Bar Associations 81–3, 86, 90–2 Black Sea 162 Bosnia 202–3, 205 bureaucracies 16, 156–7, 167–8 Burjanadze, Nino 25 business environment 117, 127 business law 106, 117–29 businesspeople 12, 13, 118–20, 124, 139, 185

Central Asia 150, 153, 162 Center for Institutional Reform and the Informal Sector 88, 90 Chabirov, Ludwig 70 Chkobadze, Nino 165 Citizens Union of Georgia 24, 35, 166 civil codes xiv, 64–5, 122, 126 civil society xv, 4, 6–7, 12, 16–17, 81, 145, 147–50, 152–3, 157–61, 165, 166–9 clientelism 8, 17 collective centres 206–7, 208, 210–13 Colleges of Advocates (see Bar Associations) command economy 8 communism, Communist Party 6, 7–10, 14, 24, 34, 99 company law 119, 122–3 Congress of People’s Deputies 23 conscription 190 constitutional courts 35, 44–5, 134, 203, 209 constitutions xiv, 42–4, 48, 52, 63–4, 85, 125, 151, 155, 162, 184, 186, 191 consumer protection 137–41 continuing legal education 89–91 contracts 124 corruption xiii–xiv, 4–17, 44, 67, 68, 70, 82, 85–9, 92, 105–6, 117–19, 125, 134, 153, 156, 160, 163, 169, 190–1, 199 Council of Europe xiv, 41, 52, 65–6, 69, 90, 92, 200–1, 204 courts (see judiciary) crime (see also corruption) 62, 67, 117, 120, 181, 192 criminal codes xiv criminal law 64, 84–5, 90 death penalty 65 Demirchian, Karen 9 Demirchian, Stepan 152 democracy, democratization xiii, 3, 4–5, 7, 21, 41, 47–8, 145–53, 168–70

219

220 Index doctrinal approach xv domestic violence 192–3 economic development xiii, 5, 17, 81 education 189–91, 207 elections xiii–xiv, 4, 20–40, 47–51, 69–70, 151–3, 204 elites 3, 92, 119 employment rights 186–8 energy (see also oil) 144, 150, 154–5, 157–8, 161, 167, 168 environment 51, 106, 108, 144–78 equality (see also human rights) 12, 208 ethnic conflict 6, 61–2, 197–8 ethnic minorities 61 European Convention on Human Rights 45, 69, 200–1 European Court of Human Rights xiv, 201 European Union xiv, 3, 41–58, 67, 69, 97, 123, 162, 193 foreign aid 3, 13, 46, 68, 71, 81, 91, 150, 159–60, 166, 168, 169 forestry resources 145, 150, 153–69 Gambar, Isa 49 Gamsakhurdia, Zviad 23, 33, 162 Georgian Stock Exchange 123 Georgian Young Lawyers Association 91, 204–5 German Technical Cooperation Agency 97 Ghukasian, Arkady 69 Gorbachev, Mikhail 14, 23 governance (see democracy) Green Parties 144, 151, 159, 162, 166 Guliyev, Rasul 49 health care 191–3, 207 human development 17 human rights xiii, 4–7, 12, 41, 43, 46, 50, 63, 64, 69–70, 81, 106, 108, 149, 150–3, 181–95, 196 informal economy (see also informal law) 117–22, 160, 210–11 informal law xvii, 5, 8–9, 85, 126, 210–11 information technology (see also telecommunications) 109

internally displaced persons 26, 31–3, 61, 67, 196–218 international community 16–17, 59, 62, 67, 196, 198, 202 international humanitarian law 62 international instruments (see also European Convention on Human Rights) 41, 63, 68, 159, 181–3, 196, 207–8 international organizations xvii, 3, 15, 20, 49, 67, 68, 71, 90, 92, 118, 149, 157–9, 169–70, 192, 199, 203, 213 investigators 85, 86–7 investment 4, 5, 41, 46, 123–4, 130, 135 judiciary xiii–xvi, 7, 11, 15, 35, 43, 44–5, 54, 66–7, 68, 69, 70, 87, 122, 123–7, 155, 163, 164, 188, 199–201 KGB 10 Khazar University 106 Kocharian, Robert 15, 20, 152 Kochladze, Manana 167 Kokoity, Eduard 70 Kosovo 71, 202, 205 Kutaisi 33 Kvemo Kartli 33 law and development movement 96 lawyers xiv–xv, 43, 68, 70, 81–95, 118, 121, 126, 199–200 Lawyers Forum 91 legal aid 85–7 legal clinics 88, 106–7 legal culture xv, 7, 12, 17, 65, 82, 84, 92, 117, 120, 125, 196 legal education 68–70, 83, 88–9, 96–114 legal ethics (see also corruption; lawyers) 90 legal institutions (see also judiciary) xiv, xv, 11, 42, 66, 124–7, 203 legal texts 64, 66, 68, 88, 108, 126 legislation, legislative reform 42, 43, 46, 63–6, 92, 117–19, 124, 126, 134, 155, 162, 163, 168, 183, 202–8 literacy 99, 182 Machiavelli 72 market economy 4–5, 81, 106, 110, 117, 119, 122, 125, 131, 137, 139–41, 169–70, 187

Index 221 media 28, 33, 42, 48, 51–3, 70, 134–5, 152, 155 methodology xv Milli Majlis (see parliaments) Mingrelia 34 Ministries of Justice 45, 61, 84, 89 minorities xiii Mironov, Sergei 50 model laws xiv, 64–5, 122–4, 126, 162, 202–3 Mutallibov, Ayaz 49 Mzhavanadze, Vasili 9 Nagorno-Karabakh 15, 41, 54, 59–77, 135, 213 nationalism 60–2, 144 networks 8, 10–11, 16, 69, 126 NGOs 13, 16, 22, 49, 90, 91, 155, 157–61, 165, 166–7, 169, 182, 184–6, 192–4, 199–200, 203–4 non-state law (see informal law) North Ossetia 61, 67, 197–8, 201 notaries 83 officials 6, 8–11, 13–14, 16, 69–70, 92, 121, 156–7 oil 15, 41, 43, 50, 54, 108, 110, 163, 165 oligarchy 5 Ombudsman 44 Open Society Institute 88, 90 Organization for Security and Cooperation in Europe 16, 32–5, 42, 49–50, 61–2, 203 parliaments xiii, 13, 20–40, 44, 47–8, 61, 65–6, 70, 119, 151, 155, 181, 184, 209 Partnership and Cooperation Agreements (see also European Union) 41 patron-client relationships 8–9, 10 peacekeeping 61–2, 197 plea bargaining 85 police 9, 15, 50, 61, 67, 70, 153 political culture (see also legal culture) 4, 7 political parties 23–5, 42, 47, 49–50, 144, 151–2, 166–7, 184–5 pollution (see environment) pre-trial detention 12

privatization 10, 15, 90, 131, 133–4, 163, 168, 170, 198, 209–10, 212–13 procuracy 9, 12, 68, 70, 82, 84–5, 87 property rights 5, 42, 117, 181, 196–201, 208–9 public opinion polls 11, 28, 102 public protests 20, 50, 52, 61, 162 Putin, Vladimir 50, 150 refugees (see internally displaced persons) regulatory agencies 124, 137–42, 156–8, 163, 166–7, 169, 188, 203 Rose Revolution xiv, 3, 15, 20, 21, 25, 35, 47–8, 92, 118–19, 127, 145, 149, 151, 197, 204 Round Table Coalition 23–4 rule of law xiii, xv–xvi, 3–4, 21, 41, 45–6, 54, 70–3, 147, 170 Russia 13, 61, 64–9, 150–1, 161, 197 Russian language 99 Saakashvili, Mikhail 15, 25, 36, 118, 151, 153, 168, 197–8, 200, 203 Sargsian, Serge 15 securities law 119, 123–4 Serbia 54 Shevardnadze, Eduard xiv, 14, 20, 24–5, 33, 35, 36, 151, 163, 165–6, 168, 197, 200, 203 Siradegian, Vano 15 South Ossetia 24, 32, 34, 196–218 Soviet Union 3, 7–9, 13–14, 42, 59–77, 61, 66, 84, 99–102, 117, 144, 150, 154–8, 161–2, 182, 185, 196 state institutions 4, 6 state recognition 62, 71 State University of South Ossetia 68 state, role of xv, 6, 7 Stepanakert 69 Supreme Court of Georgia 126, 200, 203 Supreme Court of South Ossetia 66 Supreme Soviet of Georgia 25, 27–9, 34–5 sustainable development xiii, 162, 164 tax 52, 64, 90, 117, 119–22, 163, 168 Tbilisi 12, 23, 35, 85, 136, 201, 206, 210, 212 Tbilisi City Court 35 telecommunications 130–43 Ter-Petrosian, Levon 11, 15, 152

222 Index trade 41–2, 51, 69 trade unions 188 treaties (see international instruments) Tskhinvali 61, 66, 210 Ukraine 54 United Nations Development Programme (UNDP) 3, 212 United Nations High Commissioner for Refugees 90, 203–4 United States Agency for International Development (USAID) 3, 67, 97, 158–60, 192

Venice Commission

205

water resources 145, 150, 153–69 whistleblowers 11–12 women’s rights 181–95 World Bank 67, 97, 156, 158, 160–1 Yerevan 189 Yugoslavia 59, 71 Zhvania, Zurab

25, 35, 151, 166