1. Historical Background
1 The movement to create the Charter of Economic Rights and Duties of States (UNGA Res 3281 [XXIX] [12 December 1974]; ‘CERDS’) was led by lesser developed Member States of the United Nations (UN), and was an integral part of the movement to establish a New International Economic Order (NIEO) (see also Developing Countries ; Developing Country Approach to International Law). CERDS was adopted in the wake of the Organization of the Petroleum Exporting Countries (OPEC) oil crisis of 1973, against strong objections from developed countries. 120 States voted in favour, six States voted against—Belgium, Denmark, the Federal Republic of Germany, Luxembourg, the United Kingdom, and the United States of America (‘US’)—and ten States abstained—Austria, Canada, France, Ireland, Israel, Italy, Japan, the Netherlands, Norway, and Spain. The only Member States of the Organization for Economic Co-operation and Development (OECD) to support CERDS were Australia, Greece, Finland, New Zealand, Sweden, and Turkey. The division of opinion between developing and developed States over the content of CERDS was ultimately disabling.
2 CERDS grew out of United Nations Conference on Trade and Development (UNCTAD) Resolution 45 (III) of 18 May 1972, which acknowledged the necessity of establishing legal norms to govern international economic relations (see also International Economic Law). It formed an integral part of a strategy by developing countries to use the UN to place economic cooperation in a legal context. CERDS was also the legal arm of the related NIEO Declaration and Program of Action which were adopted by consensus in UN General Assembly Resolutions 3201 (S-VI) and 3202 (S-VI) of 1 May 1974 (United Nations, General Assembly). The developing States that propounded CERDS hoped to establish a new system of rights and duties between developed and developing countries.
2. Scope
3 CERDS contains a preamble and 34 articles organized into four chapters. The fundamental principles of CERDS are equity, sovereign equality, interdependence, common interest, and cooperation between all States (Cooperation, International Law of; Equity in International Law; States, Sovereign Equality). It is in this spirit that Art. 1 CERDS provides that ‘every State has the sovereign and inalienable right to choose its economic system as well as its political, social and cultural systems in accordance with the will of its people, without outside interference, coercion or threat in any form whatsoever' (Coercion; Economic Coercion; International Covenant on Economic, Social and Cultural Rights [1966]; Use of Force, Prohibition of Threat). CERDS stands for the establishment of a NIEO irrespective of domestic economic and social systems (see also International Law and Domestic [Municipal] Law). It is the only UN General Assembly resolution to consolidate fundamental precepts of international economic relations.
4 Chapter I CERDS identifies the pillars of the Charter, which include sovereignty, territorial integrity and political independence, sovereign equality, respect for human rights, promotion of social justice and international cooperation for development (see also Development, International Law of; Development, Right to, International Protection ; Human Rights, Domestic Implementation; Social Security, Right to, International Protection).
5 The most controversial elements of CERDS appear in its Chapter II, which addresses the ‘Economic Rights and Duties of States’. Art. 2 CERDS brings the principle of sovereignty to bear on a State’s jurisdiction over its wealth, natural resources, and economic activities (see also Natural Resources, Permanent Sovereignty over). In particular, Art. 2 (2) (c) CERDS sets out a core principle of the NIEO movement in that it recognizes the right nationally to regulate and exercise authority over foreign investment and the activities of transnational corporations, and to nationalize, expropriate or transfer ownership of foreign property (see also Corporations in International Law; Investments, International Protection; Property, Right to, International Protection). This article dispensed with conventional international legal principles on expropriation, which required a showing of public purpose and payment of just compensation. Instead, CERDS states that expropriation and compensation are largely at the expropriating State’s discretion. From the earliest sessions of the Working Group of governmental representatives drafting CERDS, opposition to this provision became clear. The US, for example, stated that while every State exercises permanent sovereignty over its natural resources and may dispose of them freely and fully, nationalization and compensation cannot be within the exclusive domain of the nationalizing State (see also Domaine réservé).
6 Art. 4 CERDS addresses the establishment of a NIEO, which pursuant to the preamble is based on ‘equity, sovereign equality, interdependence, common interest and cooperation among all States’ and, in light of the Cold War (1947–91) context, notes the right of States to choose the forms of their economic organizations. Art. 5 CERDS refers to the right of every State to associate in organizations of primary commodity producers (see also Commodities, International Regulation of Production and Trade). This article was championed by developing States because it introduced the notion of cartelization among producers of raw materials. Art. 7 CERDS establishes that it is the primary responsibility of each State—and not just of wealthier States—to pursue economic, social, and cultural development. The principle of sovereign equality underlies each of these articles.
7 Chapter III CERDS addresses two ‘Common Responsibilities Towards the International Community’: the environment and seabed (see also Community Interest; Environment, International Protection; International Seabed Area).
8 Chapter IV contains the final provisions of CERDS. Art. 33 CERDS notes that nothing in CERDS should be construed as impairing or derogating from the United Nations Charter, and Art. 34 CERDS provides that CERDS will be implemented by including it on the agenda of every 5th session of the UN General Assembly. No other enforcement mechanisms were incorporated.
9 Although most obligations in CERDS are expressed in the language of inherent rights or duties of individual States, some common duties are identified (see also States, Fundamental Rights and Duties). Art. 17 CERDS, for example, discusses international cooperation for development, and Arts 29 and 30 CERDS address the seabed and environment. Developing States are also given special duties in Arts 20, 21 and 23 CERDS. For example, Art. 20 CERDS requires developing countries to ‘give due attention’ to the possibility of expanding trade with socialist countries, by granting conditions for trade not inferior to those granted normally to countries with developed market economies. Arts 21 and 23 CERDS encourage developing countries to promote trade and economic cooperation among each other. Developed States are required to assist with technology transfer (Art. 13 CERDS), extend, improve, and enlarge non-discriminatory tariff preferences (Art. 18 CERDS), and grant generalized preferential, non-reciprocal, and non-discriminatory treatment to developing countries in the field of economic cooperation (Art. 19 CERDS; see also Reciprocity). One conspicuous gap is that CERDS only addresses the rights and duties of States; it does not extend to other actors, non-State actors such as corporations, non-governmental organizations, associations, and individuals (Individuals in International Law).
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