International Development Law Organization

Business, Civil Society Leaders gather in Davos to Mobilize Support for Rule of Law

During a private event in Davos, Switzerland on 22 January 2015, UN Deputy Secretary-General Jan Eliasson stressed that “the rule of law is crucial for sustainable development, human rights, peace and security”.

Convened by IDLO, United Nations Global Compact and Diplomatic Courier, the event brought together business leaders and representatives of think tanks and the civil society to discuss the importance of the rule of law for global stability, including business stability.

IDLO firmly believes that where the rule of law is absent, business finds it hard to operate and that there are significant damaging commercial ramifications, such as a lack of respect for intellectual property, legal transparency and reliable mechanisms of arbitration, and poor means of contract enforcement and regulatory compliance. Each of these factors stifles entrepreneurial creativity and works to the detriment of global business stability.

IDLO Director-General Irene Khan, who moderated the event, said: ‘‘One of the key indicators for doing business is how long it takes for dispute resolution. It is important not just for the private sector but also for civil society. Indeed, in many developing countries, 80 percent of disputes are resolved through community groups and informal systems which are faster.’’

Ms. Khan highlighted the fact that “getting the systems and institutions right, has a huge knock-on effect that benefits society and business”, adding: “There is a bottom-up demand to make the national systems work’’.

Aurelia Frick, Minister of Foreign Affairs of the Principality of Liechtenstein, stressed that the rule of law is crucial for countries like hers, which she said might not have existed in its absence.

UN Global Compact Executive Director Georg Kell referred to the Business for Rule of Law (B4ROL) plan launched by the UN initiative in 2013, to bring the global business community together in support of the rule of law.

Elaborating on the benefits of the rule of law, UN Deputy Secretary-General Eliasson said it “secures property and contracts; it helps establish regulatory systems and protection for labor rights and environmental rights. Laws enable women to gain financial independence by protecting their inheritance rights and their ability to enter into contract”.

Director-General Khan wrapped up the discussion pointing out that the various perspectives and views expressed had one common underlying theme: the importance of justice, rules, transparency and effective institutions. 

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