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: Law at the End of the Day

States, Labor as a Market Commodity, and Human Rights Frameworks--Cuba's Grannacional Programs at the Intersection of Business and Human Rights

ADVERTISEMENTS

The Association for the Study of the Cuban Economy (ASCE) will beholding its 20th annual meeting this coming July 28-Aug. 1, 2010 in Miami, Florida. As usual, the program is varied and informative, combining representatives from a broader spectrum of opinion than is common in meetings associated with the study of Cuba. "The main theme for the meeting will be ?Cuba at the Crossroads in the 21st Century" focusing on Cuba's existing economic and social conditions, recent Cuban policies to address the impact of the world economic and financial crises, Cuban policy shortcomings, and needed structural reforms. " ASCE XXth Annual Meeting.

I have provided below a preliminary draft of the paper I will be presenting at the conference, as part of a panel discussing issues of Human Rights in Cuba.

Cuba's Grannacional Projects at the Intersection of Business and Human Rights (Preliminary Conference Draft)

Larry Catá Backer [i]

ABSTRACT: This paper considers recent to Cuban led efforts to develop new forms of state-owned multinational enterprises and the potential conflicts between these entities and the emerging rules for international business behavior, especially those touching on business and human rights. The paper starts by discussing the basic theory and objectives of the grannacional generally, as a new form of transnational public enterprise, one that is meant to provide a viable challenge to current conventional global systems of economic organization. These ideas have been articulated as the ?concepto grannacional? being given effect through the inter-governmental arrangements of the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). Grannacional economic activity, ideologically based, is divided into two categories. The first, proyectos grannacionales, are inter-governmental in character. These include enterprises targeting education, tourism and the provision of medical services. The second, empresas grannacionales, focus on the creation of entities controlled by ALBA states and geared to the production, sale and distribution of goods. It then focuses on a specific grannacional related project--the Misión Barrio Adentro (MBA), a socio-political barter project in which Cuba exchanged doctors and other health field related goods and services under its control for Venezuelan goods, principally petroleum. (Convenio 2000). For Cuba programs like MBA have served as a means of engaging in economic globalization and of leveraging its political intervention in the service of its ideological programs in receptive states like Venezuela. It has also provided a basis for expanding Cuba?s commercial power by permitting large scale state directed barter transactions. But when bartering involves labor as well as capital, the fundamental premises of the ALBA system?and Cuban ideological notions of the fungibility of labor and capital in the service of the state?may collide with emerging global frameworks for human rights and economic activity. That collision is examined against (1) recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor, (2) the possibility of conforming to the OECD's Guidelines on Corporate Governance of State Owned Enterprises, and (3) the possibility that these enterprises will not be able to conform to the United Nation's developing business and Human Rights project. The paper concludes that these emerging forms of economic enterprises, like related public ventures into private markets pose substantial political and legal issues at the intersection of public, private, national and international law. Global human rights norms, then, might as effectively confine grannacional activity to the territory of the sponsoring states more effectively than any sort of politically motivated embargo.

I. Introduction.

Cuba is quickly learning one of the great lessons of global engagement. ?Seven Cuban doctors and a nurse have accused their government of engaging in a ?modern form of slavery? with Venezuela after bartering their services for cheap Venezuelan oil.? (Galliot 2010). This is what might happen when state operated enterprises that combine sovereign and private activity collide with emerging international human rights rules. This collision, and its particular potential effects on Cuba?s recent efforts to define a space for itself within global economic frameworks, is the subject of this paper.

Since the 1959 Revolution, Cuba has fought a number of wars on multiple fronts in the service of its national interests and internationally significant ideological campaigns. Virtually every lever of state power has been used in these efforts?including military, diplomatic, organizational, economic, media, cultural, religious and ideological efforts. Most of these have used the United States, and its socio-political, economic, cultural and ideological values as the great foil against which to battle. Over the course of the last half century, these efforts have had mixed results. But they have had one singular success?they have propelled Cuba to a level of influence on the world stage far beyond what its size, military and economic power might have suggested. Like the United States, Cuba has managed to use internationalism, and especially strategically deployed engagements in inter-governmental ventures, to leverage its influence and the strength of its attempted interventions in each of these fields. (e.g., Huish & Kirk 2007). For this reason, if for no other, any great effort by Cuba to influence behavior is work careful study.

Since the start of the 21st century, conventional economic globalization has been the object of one of the principal long term ideological wars waged by the Cuban state. (Castro 2003). The Cuban state has been active in its attacks on the organizational framework of global conventional economic organization, from sovereign debt (Backer 2006) and business organization (Backer 2004) to the basis of private power to effect trade between states. (Castro 2000). Among its many activities in this realm, the Cuban state has undertaken two significant efforts. The first seeks to develop an alternative basis for inter-governmental management of trade through the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). (Backer & Molina 2010). The second, realized in large part within the ambit of the first, seeks an alternative basis of the organization of economic activity for the production of goods and provision of services.

The basic theory and objectives of the grannacional generally, is offered as a new form of transnational public enterprise, one that is meant to provide a viable challenge to current conventional global systems of economic organization. These ideas have been articulated as the ?concepto grannacional? being given effect through the inter-governmental arrangements of the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). Grannacional economic activity, ideologically based, is divided into two categories. The first, proyectos grannacionales (PGs), are inter-governmental in character. These include efforts to create alternatives to dollar denominated trade transactions grounded in the ?sucre? (Venezuela July 9, 2010) but also embrace enterprises targeting education, tourism and the provision of medical services. The second, empresas grannacionales (EGs), focus on the creation of entities controlled by ALBA states and geared to the production, sale and distribution of goods. (Venezuela August 21, 2009).

These projects and enterprises are still at a very early stage in development. But all of them share certain characteristics founded on their organizational framework: control by the state, a conflation of labor and capital as components of production and a focus on state policy for the production and distribution of goods and services in the service of state determined economic welfare maximization. Yet, these enterprises, arguably created as a challenge to the conventional global economic framework still must operate within the general parameters of human rights and other norms with respect to which international consensus has been developing, many with Cuba?s approval. Among important new developments in the rules of business behavior, especially those touching on internationally recognized human rights, are soft law instruments developed through the Organization for Economic Cooperation and Development (OECD), and the principles of business and human rights being developed by the United Nations through the Secretary General?s Special Representative, John Ruggie?the Protect-Respect-Remedy framework. (Backer 2010). In particular, the relationship between enterprise, state, and worker appears to serve as a flash point for conflict between the grannacional conception of business and global consensus on the rights of workers?especially in areas of pay, and trafficking. There is already an indication of potential conflict in recent cases filed in the United States in which these issues have been raised. (Licea v. Curaçao Dry Dock Co. 2008). ?For multinational corporations facing allegations of human rights abuses, the stakes have never been higher.? (Drimmer 2009). That applies, in equal measure, to economic enterprises sponsored, owned or controlled by Cuba. And this is an area in which state sovereignty will provide little protection to enterprises geared to projection within world markets.

This paper considers Cuba?s new efforts at global engagements through the device of the grannacional in its ALBA framework. The paper starts by examining the basic theory and objectives of the grannacional generally as articulated as the ?concepto grannacional? being given effect through ALBA. It considers distinctions and implications for the division of grannacional efforts between proyectos grannacionales and empresas grannacionales. It then focuses on a specific grannacional related project--the Misión Barrio Adentro (MBA), a socio-political barter project in which Cuba exchanged doctors and other health field related goods and services under its control for Venezuelan goods, principally petroleum. (Convenio 2000). MBA is analyzed as an example of the application of Cuban-Venezuelan approach to economic and social organization through the state. The MBA is also useful as an illustration of the difficulties of translating that approach into forms that might conform with emerging global expectations of economic conduct by private and state actors. The recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor by both laborers and doctors, and soft law systems of governing business conduct (Galliot 2010) serves as a backdrop against which this analysis is undertaken.

For Cuba programs like MBA have served as a means of engaging in economic globalization and of leveraging its political intervention in the service of its ideological programs in receptive states like Venezuela. (Bustamante & Sweig 2008; Kirk & Erisman 2009). It has also provided a basis for expanding Cuba?s commercial power by permitting large scale state directed barter transactions. But when bartering involves labor as well as capital, the fundamental premises of the ALBA system?and Cuban ideological notions of the fungibility of labor and capital in the service of the state?may collide with emerging global frameworks for human rights and economic activity. That collision is examined against (1) recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor, (2) the possibility of conforming to the OECD's Guidelines on Corporate Governance of State Owned Enterprises, and (3) the possibility that these enterprises will not be able to conform to the United Nation's developing business and Human Rights project. MBA serves as a template both for understanding the character of the operationalization of social sector grannacionales and also as a means of illustrating the way in which these projects raise significant questions of international law compliance, especially the ability of these enterprises to comply with emerging standards of business conduct.

II. The Grannacional?Concept, Project, Enterprise.

To understand the grannacional project, one must start with the presumption that its contours are a construct of applied ideology. It serves as an application of the fundamental ideological premises of ALBA, grounded in opposition to what Castro has long derided as ?neo-liberalism?. Those ideological premises include a deep suspicion of private sector globalization without strong state control and the understanding of the deployment of economic globalization as a means of deepening the dependence of developing states to the great national economic powers, headed by the United States. Castro has made that clear in speeches since the mid 1980s. (Backer 2006). ALBA is meant to provide an inter-governmental context within which these ideological confrontations with conventional globalization can be implemented.[ii]

The conception of grannacional projects is understood as essentially political. (ALBA Jan. 27, 2008). This political conception of the grannacional function is divided into three components. The first is historical and geopolitical. Its object is integration at the supra-national level, that is, to understand grannacionales as the formal expression of efforts to create a single nation (?la visión bolivariana de la unión de las repúblicas latinoamericanas y caribeñas para la conformación de una gran nación.? (ALBA Jan. 27, 2008)). Thus the derivation of the name gran-nacional, a national grouping cemented through its political-economic relations but which would also respect national peculiarities and sovereignty.[iii]

This vision of the grannacional as a means to integration of Latin American and Caribbean states is augmented by the use of the grannacional as a functional means to reach the political ends of integration. It is in this functional sense that the grannacionales are understood to have a socio-economic foundation. (ALBA Jan. 27, 2008). Grannacionales are meant to serve as the great vehicle for state directed development. They are the embodiment of an ideology that sees economic activity as a means to satisfy public policy rather than as an end in itself (that is as a vehicle to maximize individual welfare). This development is meant to maximize national and regional needs rather than aggregated global needs.[iv]

Taken together, the grannacional is understood first as an ideological vehicle advancing political and economic aims of the state. Specifically, the grannacional enterprise has as its objective the manifestation of a united front by generating a multi-national block for the structuring of sovereign regional politics. (ALBA Jan. 27, 2008).[v] This functional manifestation of a united front is best understood in its Marxist-Leninist form): ?It is particularly important when using the united front tactic to achieve not just agitational but also organisational results. Every opportunity must be used to establish organisational footholds among the working masses themselves.?(Communist International 1922, ¶10). The grannacional enterprise contributes to united front tactics by contributing functionally to the structuring of a successful supra national trade system that counters the deleterious effects of the conventional global economic order, supports what ALBA states understand to be sustainable development that is socially just, preserves national sovereignty and self determination.[vi] That focus has consequences beyond the cultivation of old fashioned Marxist-Leninist internationalism. The most important, perhaps, is that efficiency is measured differently than in classical economics or under the framework of conventional economic globalization. It is understood only in relation to the aims of the state in meeting its political goals, measured to some extent on the state?s assessment of its ability to meet the needs of a majority of its people. Both the political and needs objectives are also constructs of state policy. This produces something of an inversion from concepts in classical economics.

As a consequence, the grannacional enterprise is understood as process of experimentation in the application of ALBA principles. (ALBA Jan. 27, 2008).[vii] It is the means through which the ideological framework of ALBA is to be manifested among its member states, with the objective of moving the ALBA states toward political union. That union is bound up in notions of Marxist economic determinism: union will be achieved as the inevitable consequence of global dynamics dominated for the moment by the great industrial powers and blocks of economically hegemonic states. (ALBA Jan. 27, 2008 (?hacia la cual nos empuja la dinámica del mundo actual dominado por las grandes potencias industrializadas y los bloques económicos hegemónicos.?)). ?Now, more than ever, the strictest international discipline is necessary, both within the Communist International and in each of its separate sections, in order to carry out the united front tactic at the international level and in each individual country.? (Communist International 1922, ¶13). The grannacional enterprise is meant to provide a framework for that discipline.

This experimentation manifests in two concrete forms??proyectos grannacionales? (PG) and ?empresas grannacionales? (EG). PG programs are meant to organize integrated ALBA member state activity around key fields of activity, encompassing political, cultural, economic, scientific, and industrial activity. (ALBA Jan. 27, 2008). PG include all programs undertaken to benefit the greatest number under the ideological framework and goals of ALBA, approved by ALBA Member States, and whose execution requires the participation of two or more ALBA Member States. Since 2009, the ALBA Member States agreed to the creation of a permanent commission to oversee the development of PGs. (Venezuela Feb. 27, 2009).).

If PGs are meant to organize productive activities, EGs are meant to implement them in an orderly way. (ALBA Jan. 27, 2008).[viii] But the relationship between PG and EG is not strictly linear?though it is clear that every EG must derive from a PG, not every PG will require the establishment of an EG.[ix] This is especially the case with respect to political, social and cultural projects for which the apparatus of the state may be used directly to implement PG objectives. Nor are all PG and EG projects required to be established at the supra-national level?single state PGs and EGs may be created as long as they are consonant with ALBA principles and goals. (ALBA Jan. 27, 2008).

EGs are meant to embody an alternative to the model of the private multinational enterprise, which seeks to maximize the welfare of its shareholders and other important stakeholders. EGs are said to invert the traditional maximization model by seeking to maximize the welfare of the objects of economic (or other) activity, rather than those involved in the production or financing of that activity.[x] That effective inversion is what is meant by the ideological focus on ?just commercial zone? within the ALBA region. EGs are all state owned enterprises, established a separate juridical persons, interest in which is measured through share ownership by participating ALBA Member States. (ALBA Jan. 27, 2008). But they might be organized in other ways. In any case, EGs will be established under special legislation, rather than under the incorporation rules of any one of the participating ALBA Member States, a supra-national sovereign joint venture operating in private form. (Telesur Jan. 29, 2010) EGs are understood to be autonomous and might enter into joint venture arrangements with private sector enterprises. (ALBA Jan. 27, 2008). The primary focus of activity is within the ALBA zone, directed toward economic development therein.[xi] Thus, in a sense, the EG presents a modified form of globalization?a regionalist model meant to construct a supra-national internal market established through the direction of economic power in private form by states asserting sovereign authority for that purpose. A recent example includes the effort to create a Food EG (ALBA-Alimentos) to control the market for agricultural products within the ALBA zone. (ALBA Aug. 25, 2008). This suggests a new face for traditional command economy activity, but it is unclear whether it also suggests a change in function.

To their ideological ends, EGs are subject to a number of general parameters. EGs should operate to maximize the use of the existing capacities of the economies of each ALBA state in they operate for the purpose of aiding economic development in each of the participating states.[xii] EG production should be directed to satisfy the needs of the ALBA zone first, excess production might be directed to international markets.[xiii] Though the EG maximization model posits a focus on the needs of consumers, EGs must arrange their internal operations to be self-sustaining, a task acknowledge to be difficult.[xiv] To this end, EGs must also ensure environmental sustainability, promote equitable labor conditions and an equitable distribution of wealth.[xv] It is understood, however, that EG earnings will be distributed to the ALBA Member States shareholders for their use for social ends, or retained by the EG. (ALBA Aug. 25, 2008). While the EGs are grounded in a rejection of the welfare maximization principles of multinational corporations, they embrace the form of organization and production of those entities, including supply and production chain principles, and resource procurement optimization. The notion of ?fair price? is identified, though its definition is ambiguous. And with respect to the exploitation of natural resources, there is a suggestion of a melding of state and private function.[xvi]

PGs and EGs have been used increasingly to organize state sector economic activity within and across ALBA states. In states like Cuba with minimal private sector activity of any significance, the use of these vehicles merely suggests a rearranging of the economic sectors affected. In other ALBA states, especially Venezuela and Bolivia, the result has been to effect a nationalization of economic sectors by a process of public privatization?that is the use of private sector entities ?owned? by the states that also regulate the enterprises operating in that sector. This is the sort of double-edged activity that has been rejected as inequitable under principles of market integration within the European Union, for the very reason that it tends to disadvantage non-state private competitors in these markets. (Backer 2008). Since ALBA?s inception, a number of PG and EG projects have been initiated or announced. (Regueiro Bello, Lourdes María. 2007). These include plans for a fisheries EG (Venezuela May 10, 2010), forestry EG (Venezuela July 3, 2008), a coffee EG between Venezuela and Dominica (Venezuela July 1, 2010), four energy related EG between Venezuela and Bolivia (Venezuela April 30, 3010), an ALBA zone Hotels EG (TeleSur January 30, 2010), a mining EG between Ecuador and Venezuela (Venezuela March 26, 2010); an import-export bank to facilitate trade (ALBAexim) (Los Tiempos Oct. 19, 2009), an energy EG among Cuba, Venezuela, Ecuador and Nicaragua (El Ciudadano Jan. 27, 2010), a number of mining and extractive minerals EGs (FM Bolivia Oct. 18, 2009), and a transport EG between Cuba and Venezuela to stimulate trade within the ALBA zone and internationally. (Ramírez Cruz et al. 2007, at 3.1.1.1. PGs predate EGs in many fields. They predominate in the social, cultural and political areas, though they also encompass important service sectors?principally the health and health care fields. Many of these were organized early on as ?Missions? (Misones) and formed the basis of early bi-lateral arrangements in the service sector between Cuba and Venezuela leading up to ALBA. (Aponte Garcia 2009, 95). Among more recent PGs are projects for the provision of quality medicines (ALBA-MED) between Cuba, Venezuela, Bolivia, Ecuador, and Nicaragua (PL2009). A number of other PGs involve literacy cultural identity and diversity and genetic studies.[xvii]

Most of these remain in the planning stage. Many of them are only recently announced. A number of them seem to serve their greatest purpose for their ideological rather than their functional value, appearing in most concrete form on the media sites of ALBA organs. Virtually all of the PG and EG initiatives appear aimed at organizing an economic or social sector under state direction and them marshalling productive capacity within a state controlled entity or otherwise within a state ministry. What is new is that this fairly common form, with origins in commend economy practice, is within the grannacional context now practiced as a series of joint or multilateral ventures among states. The great innovation of the grannacional concept, then, lies in this internationalization of state-based central planning and control model within a regional trade zone. ALBA Member States now seek to create a web of economic arrangements, of state generated and controlled markets, that flow from state public policy based determinations of appropriate production, sale, distribution and development. The ultimate stakeholder in these enterprises thus shifts from the shareholder (and lender), to the national demoi of participating states, whose interests are represented by the state apparatus. Rather than maximizing shareholder value, the EG must now maximize national welfare, as those things are measured by the states who participate (and regulate those markets). ALBA Member States have sought to turn the conventional economic model from one that privileges private interests to one that adopts the forms of private organization, but in which the state acts as both regulator and shareholder. (Backer 2004). ALBA Member States have also sought to expand the utility of the grannacional form of sectoral organization by extending the use of these PG and EG projects to functions traditionally the province of religious and social organizations, or the state. Having conflated politics and economics, the grannacionales also merge the public and private. This amalgamation is then organized as state controlled enterprises, projects, missions, and the like. To date, PGs have sought to organize the following sectors: energy, finance, commerce, transport, telecommunications, education, culture, health, manufacturing, tourism, and mines. (Regueiro Bello, Lourdes María. 2007). Newer ventures include agriculture, fishing and other economic sectors.

Organizational form assumes less importance than the ideological framework and the functional objectives of these programs. Yet legal consequences follow organizational form. Those legal consequences may affect both the state as shareholder or as principle in the implementation and operation of these programs. As supra-national programs, the grannacionales will be subject to the rules (and protections) of the domestic legal orders of the ALBA Member States that have an interest in specific programs. But they may also incur obligations to critical stakeholders?workers, consumers, lenders, and others?under international law. Moreover, to the extent that these grannacionales operate outside the ALBA zone, they may also incur obligations under the domestic law of host states. Precisely because the grannacionales are meant to challenge the basis of conventional economic (and legal) organization, it is likely that some of its practices may be incompatible with legal norms outside the ALBA zone. That incompatibility may give rise to significant legal liability where grannacional activities are judged outside of the ALBA zone. Where this liability touches on issues of human rights, it may suggest implications well beyond the legal. It is especially in those area that ALBA?s ideology of ?just commerce? may come in conflict with global human rights norms, especially with respect to the power of the state over individuals as citizens and as workers.

III. From Theory to Practice: Just Commerce, Grannacional Organization, and the Misiones Barrio Adentro.

PGs and EGs function on the basis of the principle of the fusion of political and economic objectives under the direction of the state in which the state, as shareholder, supplies both capital and labor. In functional terms, many PG and EG operations are accomplished on a barter system in which each state maximizes the value of transactions in organized sectors of activity by trading capital, goods or labor among themselves. These transactions are memorialized by the states directly through Conventions (Convenios Comerciales Compensados or CCC) memorializing the terms of the barter transactions.[xviii] A number of these projects were organized as misones (missions), an organizational term with origins in the revolutionary politics of Venezuela. Misiones were originally produced to privatize traditional state activity in Venezuela after the 1999 election of Hugo Chavez. ?A ?mission? was aimed at concentrating efforts of different sectors and public organizations in order to rapidly satisfy urgent social needs, increase community participation, circumvent bureaucratic obstacles, and to employ the organizational and logistic facilities of the Armed Forces in the development of civil social actions.? (Muntaner et al. 2008, 236).

The organization of the health sector ion Venezuela was particularly susceptible to this form of organization. The privatization was necessary as a means of subverting the opposition of the state sector to Chavez?s programs reforms. (Muntaner et al. 2008, 235). If the state apparatus opposed the reforms, and if these organs were within their rights in doing so, then it might be possible to reconstitute these activities in private form and proceed as a state based but private endeavor.[xix] Eventually these programs were brought back within the state administration but by then they had acquired their own distinctive form. (Aponte García 2009). Health care sector misiones were also particularly important to Cuba, Venezuela?s ally in this revolutionary transformation.[xx] It was a small step from conceptualizing a project for state organization of the medical treatment sector to the creation of a bi-lateral arrangement for the implementation of the program. The lubrication necessary to make this step possible was the ideological framework of ALBA, especially its notions of non-reciprocal trade as a basis of commercial activity between (or directed by) sovereigns. (Aponte García 20090).

In the health care sector, two misiones, Misión Milagros and Misión Barrio Adentro (MBA) were expanded as a vehicle for bi-lateral and multi-lateral exchanges among states, principally at first, between Cuba and Venezuela. Misión Milagros was conceived as a program to provide people of Latin America with certain eye care services.[xxi] These envisioned a set of programs, projects and cooperative arrangements, directed by the Cuban and Venezuelan states. To that end, both states would organize within joint ventures established in any number of formal and informally constituted entities, into which each state would contribute the appropriate mix of both public and private sector entities, universities, research organizations, and non-governmental organizations. (Convenio 2000, art. I). The more important effort, for purposes of this paper was in the organization of health care to the poor in Venezuela in the form of MBA. That effort was memorialized as part of a wide ranging Convenio (2000) between Cuba and Venezuela meant to establish a series of programs to aid in the development of both states in a variety of sectors?agriculture, tourism, medical products, education, transportation, and sports. (Convenio 2000, Annex I). To that end, each state would contribute in according with its economic strengths and state directed economic development objectives. Cuba agreed to ?prestará los servicios y suministrará las tecnologías y productos que estén a su alcance para apoyar el amplio programa de desarrollo económico y social de la República Bolivariana de Venezuela.? (Convenio 2000, art. II). Venezuela agreed to provide petroleum among other goods and services. (Convenio 2000, Art. III). Importantly, Cuba also agreed to the provision, at no cost to Venezuela, of the services of doctors to serve in the health care sector in Venezuela.[xxii] (Convenio 2000,art. IV). Under the terms of the Convenio, Cuba was to supply these medical personnel to work in underserved areas of Venezuela, and bear the costs of their salaries. These medical personnel were to provide medical services and training of locals. Venezuela was obligated to pay only provide the costs of food, lodging and internal transportation of these medical personnel supplied by Cuba.[xxiii] These programs were to be administered at the state level through the establishment of a ?Comisión Mixta? (Convenio 2000, art. V) headed jointly by representatives of the Venezuelan Production and Commerce Ministry and by MINVEC, the Cuban Ministry for Foreign Investment and Economic Collaboration. (Id.). The details of the programs undertaken, and their day to day running were to be delegated jointly within each of these ministries. (Id.).

The MBA started through a pilot program arrangement with the municipal government of Caracas. According to one source.

Based on the humanitarian support provided by Cuba during the Vargas tragedy, Caracas Mayor Freddy Bernal, with the support of President Chávez, agreed on a pilot project with the Cuban government. In April 2003, 58 Cuban doctors specializing in integral general medicine (a form of family medicine) were established in several peripheral neighborhoods (barrios) of Caracas, to provide primary health care. Health team personnel live in the same barrio in which they work . . . and an assistant known as a ?Defensor de la Salud? (?Defender of Health?), is chosen from the community and trained by the Ministry of Health to provide basic support to the physicians. (Mutaner et al. 2008, 236).

Judged a success after a few months of operation, it was converted into a national program and given its name by Chavez in September 2003, and officially inaugurated in early 2004, despite substantial opposition by the Venezuelan medical establishment. (Mutaner et al., 2008, 236-237). It was administered through a special Venezuelan Presidential Commission, the Black Gold Civil Association (Oro Negro) that emphasized both the public character of the mission and the ideological objectives of the program.[xxiv] Cuban doctors enrolled for these programs signed up for two year tours of service. (Brouwer 2009). The principal purpose of the initial phase of MBA was to provide primary care and instruction. MBA I was followed by a second phase, that sought to provide secondary, hospital and extended care as well as more advanced training of locals. MBA III had a more ambitious agenda, the consolidation of a significant portion of the Venezuelan public hospital system within its ambit. (Muntaner et al. 2008, 240). The latest phase, MBA IV, focuses on the construction of specialized care hospitals. (Id.). ?At its peak in 2006, the Cuban presence numbered about 14,000 physicians plus thousands of other medical personnel. By 2008, the number of Cuban doctors had declined as some moved on to work in Bolivia and other countries or returned home.? (Bouwer 2009). In addition, many of the facilities remain unbuilt, a number of other have had to be abandoned because of structural problems, and the programs have been criticized for the use of Cuban doctors for political purposes and the Programs? effects on the wages and working conditions of Venezuelan health care workers. (Pérez & Haddad 2008, 333-34).

The MBA programs have been lauded as a great advance in compliance with international obligations with respect to health care. It is said to demonstrate the ?validity of incorporating health as a universal right and confirms the relevance of principles contained in the Alma Ata and Ottawa Declarations.? (Mutaner et al. 2008, 242). However, the operations of the program, rather than its objectives, might measure differently under those standards. The issue relates to Cuba?s end of the MBA barter?the provision of doctors. Within the ideological parameters of ALBA, this construct, the Cuban doctor is also painted in heroic strokes. (Brouwer 2009). Cuba has been using its doctors as instruments of state policy since the early days of Che Guevara, who understood the use of medical personnel as weapons of revolutionary solidarity. (Id.). The MBA program was described as

the newest reflection of how Cuba, in concert with the people of many nations in Africa, Latin America, and the Caribbean, is transforming the training of doctors, nurses, and other health professionals while also delivering medical care to poor populations that in the past seldom received any attention at all. This dynamic notion, planted by Che and others at the beginning of the Revolution, has taken decades finally to develop, and now has come to fruition: thousands of doctors have been created who are capable of practicing and teaching revolutionary medicine, and they are putting this ?weapon? to good use. (Id.).

The political nature of this economic enterprise was well recognized. (Saney 2009; Kirk & Erisman 2009). The political importance of these programs, solidarity through enterprise, was recognized by the Americans at the time. If ?the brigades of Cuban doctors working abroad represented the front lines in a struggle to assert that alternatives to profit-centered human interactions were viable,? (id.) then it was also likely that the United States would respond politically. They instituted a program, the Cuban Medical Professional Parole Program, encouraging Cuban doctors abroad to defect to the United States. (Feinsilver 2008). The Americans have taken the position that these doctors have been conscripted by the Cuban government. ?Under Cuban Resolution 54, these same Medical Professionals are often denied exit permission by the Cuban Government to come to the United States when they qualify under other established legal channels to migrate from Cuba. Doctors, nurses, paramedics, physical therapists, lab technicians and sports trainers are examples of groups that may qualify for the CMPP program.? (U.S. Dept. of State. Jam. 26, 2009). Though successful, the United States did not always grant asylum petitions from doctors. (El Universal March 2, 2007).

The Venezuelan medical community also mobilized against the importation of Cuban doctors as an instrument of the nationalization of a portion of the medical sector. ?The Venezuelan Medical Federation, the largest association of medical doctors in Venezuela, has lobbied vigorously against the use of Cuban doctors in Mission Barrio Adentro, and was in a legal dispute with the Chavez administration over the legitimacy of the Cuban doctors' licensure and practice.? (Mundoandino.com 2009). Though the Venezuelan doctors succeeded in their court challenges, eventually a compromise was reached permitting MBA to be staffed with foreign (Cuban) doctors.

But these political movements would be of little interest for corporate or enterprise governance except that the issue of the employment of Cuban doctors by the Cuban state in Venezuela proved to be more ambiguous. The Cuban state never explained many of the conditions under which it recruited and maintained the doctors gathered for participation in MBA. It has not been transparent with respect to salaries work working conditions. But it is clear that while the MBA program is founded on political goals, it also is a business operated by the Cuban state.

International missions have allowed Cuba to fulfill dual goals of capitalizing on its highly educated population as a source of export income while pursuing its humanitarian goals of international solidarity. Cuba's model of charging below-market rates for professional health services has expanded exponentially since 2003 in a win-win situation for poor countries with insufficient medical care. Revenues for services earned from international missions (as well as the licensing and export of Cuban biotechnology and medical treatment to foreigners in Cuba) have become a major source of hard currency earnings, surpassing tourism earnings every year since 2005. (Blue 2010).

Thus, MBA functions at a variety of levels. It serves the ideological goals of the Cuban regime. It is an important means of advancing Cuban international relations. It serves as a template for Marxist Leninist development models. It provides a different basis for state-to-state relations and commerce, based on government directed, non-reciprocal trade in furtherance of divergent objectives. Yet it is also a business. (Pérez & Haddad 2008). For Venezuela, Cuban doctors serve as a valuable input in the business of creating a viable public health sector. For Cuba, it serves as the core of the business of hiring out labor. Cuba has a long history of hiring out labor to foreigners within the Island. But the business of hiring out workers to outsiders?whether to directly advance state objectives, like the MBA program, or merely to serve the economic interests of foreign partners?essentially treats individuals like factors in the production of national wealth. That wealth is produced by the profit generated in those transactions. That profit is related to the differences between the compensation paid by the Cuban state to its employees sent abroad, and the amounts it charges its ?clients? for the services of these individuals. ?Loaned? individuals do not participate in discussions over the pricing of their services to third parties, and they are required to accept state determined compensation for their services.

While many thousands of individuals employed by the Cuban state abroad in this program have complied with their obligations, a number of doctors have not.[xxv] ?The need for hard currency and their inability to earn it legitimately is clearly a factor in individual health care workers' decisions to endure difficult two-year assignments abroad. When tens of thousands of health workers accepted temporary overseas posts, their absence was acutely felt at home. Though health indicators have not declined, Cubans who were used to the highest and most accessible doctor-to-patient ratios in the world are now adapting to a restructured health system that can accommodate an expanded medical presence abroad.? (Blue 2009, 43). And it was among those doctors dissatisfied with the terms of their service that the possibilities of collision between Cuban medical internationalism and international human rights norms were realized. The issue of compulsion is at the heart of the loan system. On the one hand, it appears that, as a formal matter, individuals are not formally coerced to serve the interests of the state?s business and political dealings abroad. On the other hand, some have argued that as a functional matter the state effectively coerces service, and then, once abroad, tightly controls the freedom of movement of bartered employees. Yet what might appear to the Cuban state as appropriate behavior to compel its citizens to do their duty within the substantive parameters of the domestic legal order might be characterized as compulsion under the substantive parameters of other systems. The characterization is important for its consequences under international law.

IV. Points of Conflict and Intersection between ALBA Just Commerce and International Human Rights Regimes.

Two recent cases highlight a new reality for the socialist construct within the broader context of emerging regimes of international human rights systems. They also point to the shape of the future with respect to these ALBA zone enterprises as they expand beyond and seek partners from outside the ALBA zone. Both cases suggest that the ways in which the ALBA model of social and economic organization, in which the state directs sovereign or market economic activity directly, or through an entity formed for that purpose, can arguably present a case of human rights violations in the way in which the state conducts its business. In addition, whether as sovereign or market based activity, the commercial activities of public actors may also constitute violations of soft law frameworks. Lastly, non-state foreign partners or other entities participating directly or indirectly in these activities might also face liability for complicity in the human rights violations of the state. There is irony here, of course. Especially in GPs like MBA, created in part as an ideologically pro-active response to human rights disparities within developing states may itself serve as a basis of violation of those human rights.

But both cases have been brought in the United States. From the Cuban perspective, the United States is in no position to neutrally judge the Cuban state?s compliance with international human rights norms. But as important, the United States does not have a strong reputation for adhering to or imposing internally international human rights norms. To use the U.S. courts for the purpose of determining compliance of the Cuban state with international norms with respect to activity that occurs within the territory of a third country suggests a political motive and reduces the authority of the cases, at least outside the United States. And yet, the United States has served as the best site for the vindication of international human rights within the court system of a state. As such, though the cases present a judgment about the character of Cuban state business activity in the context of its barter arrangements with third countries, those determinations should be understood as less authoritative outside the territorial borders of the United States. Still, each serves as a warning, harbinger and template of possible future actions against the Cuban state and others tied to the arrangements at issue?especially the bartering of individuals for other goods and services, not only for the state but also for its non-state partners.

The first case suggests the potential exposure of states with respect to their economic activities in the form of PGs or EGs. In February 2010, a group of Cuban doctors who had participated in MAP filed a lawsuit in the United States against Cuba, Venezuela and Venezuela?s state run petroleum corporation, Petróleos de Venezuela (PDVSA). (Galliot 2010).

The doctors told reporters at a press conference in a Miami suburb on Tuesday that they were forced to enrol in the programme with Venezuela due to dire economic circumstances and political pressure at home. According to several US and Venezuelan media sources, the plaintiffs described being held captive in crowded lodgings or with families affiliated with the Venezuelan regime, and forced to work seven days a week. ?We were under strict surveillance at all times. We weren?t allowed to go out when we wanted to or interact with Venezuelans other than our guardians,? plaintiff Frank Vargas, a 33-year-old general practitioner from Havana, told reporters. His colleague Maria del Carmen Milanés, 34, added that interacting with known regime opponents was especially forbidden. . . . Had they protested, the doctors explained, they would have been forced to return to Cuba where they would have paid for their insubordination. (Id.).[xxvi]

The complaint painted a picture that served as a perverse reflection of the amalgamation of political and economic factors on which ALBA itself is based, suggesting, for example a tie between Venezuela and what it described as terrorist regimes in Cuba and Iran. (id.). The complaint also specified a number of legal violations grounded in the arrangements between Cuba and Venezuela for the management and control of Cuban medical personnel. [xxvii] The legal basis of this complaint, grounded in the Alien Tort Claims Act (ATCA), is similar to another complaint recently concluded in Miami. (Licea v. Curaçao Dry Dock 2008). The object is to draw on international norms applicable to non-U.S. citizens in American courts. Traditionally, these provisions have been applied against right wing dictatorial regimes, especially in developing states. (e.g., Filartiga v. Pena-Irala 1980) These cases represent a reversal of sorts, where they are applied to test the legal validity under international law as understood by American courts, to a Marxist-Leninist organization of economic activity.

More importantly, litigants have begun to seek to apply ATCA to the activities of corporations and other economic enterprises for violations of international law outside of the United States. (Presbyterian Church of Sudan v. Talisman Energy 2009). The MBA program, and the Convenio giving that program its Cuban labor component, provides both a basis for suit against a sovereign for direct violation of international law, and also for suit against the corporate instrumentalities of such sovereigns for their own violation (or complicity in violation) of those norms. Indeed, one of the great movements at the global level has been the search for means to police the conduct of economic enterprises, in whatever form economic activity takes, for breaches of international norms, especially those touching on human rights. (Taylor, et al. 2010). Systems that tend to barter labor, however consistent that transaction might be within the ideological framework from which it is derived, may not stand up to examination under international standards applied from outside the state system that sustains it. And it appears that business conduct is increasingly open as a basis for testing the legal sufficiency of rules that support such conduct under national or bi-lateral governance arrangements (for example through the Convenio (2000).[xxviii]

The second case suggests the potential exposure of non-PG or EG entities for complicity. The Curaçao Dry Dock Company learned that lesson the hard way. (Licea v. Curaçao Dry Dock 2008). That case involved a number of Cuban workers who, having emigrated to the United States, brought suit against the Curaçao Dry Dock Company for complicity in the Cuban government?s business of bartering labor for goods and services.[xxix] The court determined that the agreement between Curacao Dry Dock and Cuba to barter Cuban workers to pay off the debt owed by Cuba amounted to forced labor under international law norms. (Id., at 1359-63).[xxx] The court summarily dismissed the bartering arrangement as inherently violative of an individual?s human and labor rights on the basis of its characterization of the Cuban political and labor system.

Cuba is a totalitarian state that abuses human rights; that Cuba has a long historyof forced labor and routinely compels labor under threat of imprisonment in violation of international law; that any Cuban who resists performing work is subject to persecution; that Cuba imposes prosecutions or ?therapy and reeducation? at police discretion for the crime of ?potential dangerousness? on those who refuse to work for the socialist cause; that Cuba imprisons those who refuse to work at worksites in prisons that are particularly inhumane and dangerous; that Cuba employs outrageous means to persecute those who resist the will of the state; that the Cuban state was particularly concerned with the laborers it was deploying to Curaçao because they generated hard currency; that the punishment workers would receive if they refused to work in its forced labor program would be particularly harsh because the program generated foreign currency that allowed the state to survive economic sanctions on it; and that the laborers provided by Cuba were not free individuals. (Id., 1359-61).

The basis of these conclusions were drawn from a report prepared by the U.S. State Department (United States Department of State 2008), which the court took as uncontroverted because of the procedural posture of the case. Although the violations of international law were committed by the Cuban state, the company was exposed to liability on a complicity theory.

The Defendant in this case, one of the largest drydock companies in the Western Hemisphere, with tens of millions if not hundreds of millions of dollars in annual revenues, conspired with the Republic of Cuba to force Cuban citizens to travel to facilities the Defendant owns in Curaçao, to hold them in captivity there, and to force them to work repairing ships and oil platforms. (Id., at 1360).

Despite its result, even in the United States, the precedential value of the case may be limited. The court initially entered a default judgment against defendant (id., at note 3), because the Curaçao Dray Dock Company refused to defend the matter. Critical facts leading to the conclusion were never controverted or effectively put at issue either by the Cuban state or by Curaçao Dry Dock. The company eventually offered evidence was only produced during the more limited damages phase of the proceedings (id., at 1357-58).[xxxi]

Yet, despite these caveats, the sweeping language of the court does suggest the potential difficulties of exporting a labor barter system grannacional concept outside of the ALBA zone in a way that would minimize exposure to risk, for Cuba or its trading partners, for lawsuits and claims of this type. This is especially the case for non-ALBA trading partners, or entities involved in GP or EG production or supply chains. Three factors are especially important in this regard. First, Licea increases incentives to bring additional cases of this kind before U.S. courts. While future cases are likely to see more aggressive defenses, the fact of litigation exposure itself may serve to chill economic activity involving ALBA Member States under GP and EG arrangements. Because of the extensive jurisdictional reach of U.S. courts, a large number of enterprises, especially those that produce assets resident in or subject to the reach of the American government, will be sensitive to these issues.

Second, liability for violations of human rights under a complicity theory has become more important as a mechanism for enforcing human rights norms, especially against businesses. (Clapham & Jerbi 2001; Ramasastry 2002). The legal basis of complicity remains unsettled as a matter of transnational law. But this basis for liability extends beyond U.S. law in the form of aiding and abetting the violation of human rights or humanitarian law.[xxxii]

?Corporate complicity" is a relatively new concept. Although it has echoes in the law of accomplices in criminal law, those active in the area of business and human rights are seeking to describe what "corporate complicity" means in terms of legal policy, good business practices, as well as in different branches of the law. But there remains considerable confusion and uncertainty about when a company should be considered to be complicit in human rights violations committed by others. (Backer 2010).

Despite its recent emergence, notions of corporate complicity are likely to become more important. They play a significant role in the liability framework under emerging corporate governance soft law frameworks at the international level. The issue of complicity will tend to revolve around a number of factual determinations: whether through action or inaction, a company enabled, exacerbated or facilitated the specific abuses, intent or reckless disregard, and proximity. (Clapham & Jerbi 2001).

Third, emerging international hard and soft law systems are likely to increase the scope of exposure of states, their controlled enterprises and trading partners to liability for violations of international human rights norms. Cuba?s EGs and PGs are likely to play a role in the development of these bases for liability. Consider a recent complaint filed by the Unitary Council of Cuban Workers to the International Labor Organization related to the Licea case (Unitary Council of Cuban Workers 2009). The object was to use the standards of the international agreements to which Cuba is a party, against it. (Id.). The complainant argued that the basis of Cuban state labor policy, and its implementation in its economic regulations and commercial activities, violates ILO Convention Article 29 on forced labor ratified by Cuba in 1958. (Id.) The complainants echoed language from ILO documents that assert that the ?prohibition of the use of forced or compulsory labor in all its forms is considered now a preemptory norm of modern international law on human rights.? (Id.). The complaint suggested that the Cuban barter system, grounded in a state power to command behavior coupled with the use of that pow

Full post as published by Law at the End of the Day on July 17, 2010 (boomark / email).