The AIIB Under International Law
The AIIB is an international organization established by the AIIB Articles of Agreement (entered into force December 25, 2015), a multilateral treaty, the Parties to which comprise the Membership of the Bank. Accordingly, the AIIB is both constituted, and governed, by public international law, the sources of which include applicable international conventions, customary international law, general principles of law and subsidiary means for the determination of rules of law.
Notwithstanding its international legal personality independent of that of its Members, the AIIB, unlike States, does not possess general competence. In other words, it may only exercise those powers expressly or impliedly bestowed upon it by the Articles of Agreement. In the furtherance of the AIIB’s mandate, internal legislation is issued by the governance organs of the AIIB, deriving its effect from the Articles of Agreement. The resulting organization and effect of such legislation is established by the AIIB’s Internal Legal Framework.
Internal Legal Framework
The AIIB’s Internal Legal Framework legally and logically arises from the Articles of Agreement and the roles and competence attributed to the Board of Governors, the Board of Directors and the President. It responds to the authority of the Board of Governors to adopt rules and regulations, and the power of the Board of Directors to establish Policies and adopt the Staff Regulations. It is also established in accordance with the generally recognised principles of international administrative law which derive from public international law which governs the AIIB.
Together, this forms a governance hierarchy, ordering the Board of Governors highest, with the Board of Directors subject to the Board of Governors, and in turn the Board of Directors may direct the President. However, the Articles of Agreement specify that the President is, independently of both Governors and Directors, the chief of staff and legal representative of the AIIB. As such, the President may add to the Policies and Staff Regulations issued by the Board, but not detract from them or alter them.
Therefore, within the AIIB, the Board of Governors adopts the Codes of Conduct for Bank Personnel and Board Officials, the Board of Directors adopts all Policies as well as the Staff Regulations. The President adopts Directives and also the Staff Rules. Directives may implement Policies, but they may sometimes be standalone initiatives of the President. Directives and Staff Rules may be complemented by Administrative Guidance issued under the delegated authority of the President.
In accordance with Article 30(2) of the Articles of Agreement, the Staff Regulations adopted by the Board of Directors set forth the fundamental conditions of service and the basic rights, duties and obligations of AIIB and its staff. These establish the broad policies in accordance with which the President shall organize and manage AIIB staff.
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The Staff Rules are adopted by the President and prescribe the legal employment rights of AIIB staff. The Staff Rules, together with the Staff Regulations, form the essential employment law of the AIIB. This is complemented by individual contractual provisions as well as application of the generally recognized principles of international administrative law.
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Directives are binding instructions issued by the President to AIIB staff. They may also serve to delegate authority and attribute responsibilities. Directives may implement a Policy adopted by the Board of Directors are be standalone. They are one of the ways in which the President, as chief of staff, ensures the staff of the AIIB work together in a coordinated, efficient, confident way that leads to high-performance and institutional success. Some key points:
- Directives are issued by the President (following deliberation by the Executive Committee).
- Directives are binding rules, enabling provisions and delegations of authority and responsibility.
- Staff Members who disregard a Directive are disregarding the President’s authority as chief of staff and so will likely be acting contrary to the terms of the Code of Conduct for Bank Personnel.
- For these reasons, the content of Directives is intended to be precise, specify what is to be done and by whom, and provide no more binding rules than are strictly necessary.
Directives and Staff Rules are usually supported by Administrative Guidance (AG). AG may contain written administrative practices, forms and details, which AIIB staff should follow because it is essential for superior performance. AG is issued by Vice Presidents and other Heads of Department reporting directly to the President. AG can be updated and changed as often as needed. AG cannot, however, revise, amend or contradict any Policy, Staff Regulation, Directive or Staff Rule. In order to ensure the functional integrity of the AIIB, AG is not made public.
AIIB 2017 Legal Conference
The 2017 AIIB Legal Conference theme was Good Governance and Modern International Financial Institutions. Four panels were convened, chaired by senior lawyers of the AIIB’s Office of the General Counsel, on the topics of "The Governance Role of Multilateral Shareholders", "Institutional Design and Effective Governance", "External Dimensions and Governance Mandate" and "Governance and the Rule of Administrative Law". The Conference concluded with a plenary discussion, chaired by the AIIB's General Counsel, and closing remarks by the President.
The 2017 AIIB Legal Conference speakers were drawn from Academia, International Financial Institutions and Practitioners. From Academia: Yifeng Chen, Peking University Law School; Catherine Weaver, University of Texas; Ngaire Woods, Dean of the Blavatnik School of Government, University of Oxford; and Dan Sarooshi, Essex Court Chambers and University of Oxford. From International Financial Institutions: Marie-Anne Birken, General Counsel, EBRD; Pascale Helene Dubois, Vice President for Integrity, World Bank Group; Yan Liu, Assistant General Counsel, IMF; Christopher Stephens, General Counsel, ADB; and Rutger de Witt Wijnen, General Counsel, Global Fund. As well as other Practitioners: Whitney Debevoise, Arnold and Porter Kaye Scholer LLP and former World Bank Group Executive Director; Natalie Lichtenstein, inaugural General Counsel, AIIB; Stilpon Nestor, former Head of Corporate Affairs Division, OECD; and Joan Powers, former Assistant General Counsel, IMF.
Additionally, attendees at the AIIB Legal Conference were also able to hear the inaugural AIIB Law Lecture on Oct. 19, 2017 at AIIB Headquarters, given by Miguel de Serpa Soares, United Nations Under-Secretary-General for Legal Affairs and Legal Counsel. The title of the Under-Secretary-General’s lecture was "The Necessity of Cooperation between International Organizations".
AIIB Legal Journal
The papers contributed by speakers to the 2017 AIIB Legal Conference will form the basis for the first edition of the AIIB Legal Journal, due to be published in June 2018.