Perspectives
Treaty-Making Powers: A Case for ‘Federalisation’ and ‘Parliamentarisation’
Rapid globalisation and liberalisation have led the union government to sign several international treaties with little or no consultation with the states. Conflicts arise when the interests of the centre differ from those of the states. Though treaty-making power lies with the centre, it needs to consult the states before signing agreements that affect state jurisdiction under the Constitution. Moreover, the process of consultation needs to be institutionalised in the federal polity.
REKHA SAXENA
The GATT treaties and the WTO affect
the sovereignty of the nation and trench
upon the federal character of the polity.
I am convinced that the Supreme Court
has to examine these treaties…
–V R Krishna Iyer1
I
In his powerful indictment of the “ultramodern mantras” of the new economic order, Justice Krishna Iyer has warned that developing nations are deluding themselves if they think that they can “trade themselves out of poverty” by being a part of the World Trade Organisation (WTO) or, for that matter, by signing international commercial agreements which are corrosive of their sovereign powers.2 “The legal methodology of treaties legitimises the process of economic exploitation”, argues Justice Iyer, “and international treaty jurisprudence is today a ‘might is right’ manoeuvre to subjugate, without arms, nations which are forced to jettison their national sovereignty and abandon their commitment to their people by the diplomacy of signatures. The pen has done without blood what needed a gun before; what once required wars of conquest are accomplished by words of treaties.”3 India, Justice Iyer regrets, “without consulting Parliament or people, signed on the dotted line, signing away the safeguards for crucial sectors such as agriculture on which nearly 70 per cent of the Indian population still depends for a living.”4 There is a need, argues Justice Iyer, to check the treaty-making power of the central executive. “Assuming vast powers in the executive (Article 73), it is outrageous to use it to make treaties and stultify the essentials of the very Constitution sans which no power subsists. It follows that the potential terrorism of treaty power desiderates sharp checks on its adventurist use.”5
This article argues that the union government should develop mechanisms of consultation with state governments before signing international treaties – commercial or non-commercial – and conventions which affect state jurisdictions under the Constitution of India. The Indian polity, needless to emphasise, is more federated today than it was during the dominance of the one-party system. Not only have some of the state governments protested against the union executive unilaterlism in signing some international treaties and conventions (aside from entertaining foreign investors in their competitive bids to attract foreign investment and multinational corporations), but also approached the Supreme Court of India to adjudicate in such matters. Before the docket of the Supreme Court gets flooded with such petitions, the politics of current federalism (and there is little hope that it is going to change in favour of a centralised federalism of the earlier years) demands that the interests of the state governments be accommodated within a broad centrestate consultation framework. It was in this context that the national commission to review the working of the Constitution (NCRWC 2002) recommended: “The commission recommends that for reducing tension or friction between states and the union and for expeditious decision-making on important issues involving states, the desirability of prior consultation by the union government with the interstate council may be considered before signing any treaty vitally affecting the interests of the states regarding matters in the state list.”6
Background
It is well known that in the wake of independence and partition in 1947, India drafted and adopted a federal constitution with a strong parliamentary centre. Taking the lessons from history and contemporary times, the constituent assembly of India settled for a Constitution which, as B R Ambedkar put it, would work as a federal one but would be amenable to transformation into a unitary one in constitutionally contemplated emergencies. Without going into the details of controversial centralisation of a potentially federal Constitution and the displacement of the cabinet system by a prime ministerial system in the 1970s, it is evident that the system has been in for a remarkable degree of federalisation since the 1990s. The
Economic and Political Weekly January 6, 2007
economic reforms have reversed the process of state-led strategy of growth and given a greater leeway to the market forces both in national and multinational terms. Federalisation and marketisation have conjointly augmented the autonomy of both the state governments and the private sector. In this new ambience, the channels of communication between the state governments or the sub-national governments (SNGs) and foreign governments and between Indian corporate companies and foreign companies are expanding at a remarkable pace. This symbolises the growing trends of federalisation in the country as much as it represents the “statebuilding” activities of the SNGs in collaboration with multilateral financial institutions such as the International Monetary Fund, World Bank, and other foreign investors. Several state governments have entered into or are in the process of negotiating contracts with foreign governments and multilateral international agencies for development of infrastructure and vital sectors of the economy. During his previous visit to India, the World Bank president spent more time in some state capitals than in New Delhi. And the state chief ministers, as the Rudolphs noted, have become “the marquee players in India’s federal market economy”.7 This changed context requires a fresh look at our constitutional and legal frameworks with a view to bringing about positive reforms in policy coordination between the centre and the states.
With Whom Does the Power Lie?
A reading of the constituent assembly debates as well as the text of the Constitution indicates that its authors were essentially motivated by the theory that external affairs and treaty-making powers should be an exclusively union jurisdiction, and primarily an executive affair. Presumably, colonial practice and nationalist sentiment had made them oblivious to the fact that the matter at some stage would become federally sensitive and that states and regions would develop a desire for being effectively consulted and represented in the process of treaty making. This argument appears to be validated by observations made by K M Munshi (Bombay: General) who made a rather detailed comment on the nature of the union executive in the draft Constitution, strongly advocating the British model against the American model but completely glossing over the difference between the two models with regard to the treaty-making power. As is well known, the treaty-making power in the US is shared between the executive and the federal second chamber whereas the British follow a unitary executive model of treaty-making. Munshi argued that the model of the British executive “is the best form suited to Indian conditions”. He went on to say:
We must not forget a very important fact that during the last 100 years, the Indian public life has largely drawn upon the traditions of the British constitutional law. Most of us, and during the last several generations before us, public men in India, have looked up to the British model as the best. For the last 30 or 40 years, some kind of responsibility has been introduced in the governance of the country. Our constitutional traditions have become parliamentary and we have now all our provinces functioning more or less on the British model. As a matter of fact, today the dominion government of India is functioning as a full-fledged parliamentary government. After this experience why should we go back upon the tradition that has been built for over 100 years, and try a novel experiment which was, as I said, formed 150 years ago and which has been found wanting even in America.8
Nevertheless, Article 51 of the Part IV of the Constitution on the directive principles of state policy, dealing with promotion of international peace and security, uses the term “the state” rather than the union. This article provides that “the state shall endeavour to (a) promote international peace and security; (b) maintain just and honourable relations between nations; (c) foster respect for international law and treaty obligations in the dealing of organised people with one another; and
(d) encourage settlement of international disputes by arbitration.”9 It may be argued academically as also by the judiciary with greater authoritativeness that this article leaves enough scope for greater participation of SNGs in the exercise of the treatymaking power of the union – after all, the concept of the “state” has to be inclusive of the federal units.
In terms of the original constitutional design, the treaty-making power appears to be an essentially executive power. This is for two reasons. First, prior parliamentary sanction is not required for the executive signing a treaty. Second, parliamentary legislation is required pro facto for implementing a treaty. Thus, the executive can very well present the Parliament with a fait accompli and constrain its options by the argument that treaty is already signed and the federal state cannot go back on the commitments already made to a foreign government. On the face of it, it appears to be a historical hangover of the imperialist British tradition which is a mixture of royal executive prerogative as well as undemocratic colonial heritage. This state of affairs however can be questioned and an alternative point of view may even assert itself on an unwilling executive whose survival is dependent on coalitional majority support with parties supporting the government from outside. For instance, in 2005-06, the Indo-US nuclear deal was formalised in a series of steps whereby prime minister Manmohan Singh and president George W Bush signed an agreement in the first instance in July 2005 which was followed up by subsequent deliberations and signing of documents by the two governments. Interestingly, around the same time, when this treaty was going through process of ratification by the American congress, especially the senate, the Indian parliamentary scene was also replete with heated debates in which the left parties supporting the Congress-led minority coalition government insisted and were assured that the government would proceed in the matter on the basis of the sense of the houses of Parliament as revealed in the long drawn out debates. A similar demand was made by the Bharatiya Janata Party.
Some scholars have argued that the treaties made by the union executive should be subject to ratification by the Parliament and that the Supreme Court should watch them if they are in conformity with the “basic structure” of the Constitution.10 “Under the scheme of the Constitution”, writes Rajiv Dhavan, “it is Parliament that needs to legislate on the manner and extent to which the union may participate in international conferences, associations and other bodies, enter into treaties and agreements and implement whatever decisions are made at these meetings through these instruments….There is nothing to prevent Parliament from passing legislation which will place treaty negotiations within a framework of democratic accountability of India.”11 In the same vein, Justice Krishna Iyer wrote: “So it is fair to implant parliamentary ratification as a condition precedent to validation of a treaty negotiated, even signed by a minister or head of the state.”12 Similarly, the NCRWC’s consultation paper observed: “The power of treaty-making is so important and has
Economic and Political Weekly January 6, 2007 such far-reaching consequences to the people and to our polity that the element of accountability should be introduced into the process.”13 It is my argument that this democratic accountability needs to be expanded into federal accountability in the sense that the centre should consult SNCs before concluding international treaties and agreements which affect the interests of the SNCs (state governments).
Under the Constitution, SNGs are not authorised to contact foreign authorities directly. Under the union list, Article 246 read with the seventh schedule of the Constitution specified by entries numbers 10 (foreign affairs), 11 (diplomatic representation), 12 (United Nations Organisation), 13 (international conferences), 14 (war and peace) and 41 (international trade) give exclusive authority in this regard to the union Parliament.14
According to Article 73(b), the executive power of the union extends “to the exercise of such rights, authority and jurisdiction as are exercisable by the government of India by virtue of any treaty or agreement.”15 Treaty-making power is thus an executive act performed by the government of India on behalf of the Parliament. The executive power of the union (particularly when it commands solid partisan majority in the Parliament) is further enhanced by Article 253 which confers overriding power to Parliament for giving effect to international agreements. According to Article 253, “Parliament has the power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body”. Thus, the treaty-making power of the centre overrides the normal federal-state jurisdictional lines.16
Rulings on Treaty-Making Power
The constitutional provision in India with regard to the power of the central executive to conclude treaties is consistent with the practice in the British Empire though the parliamentary power to override the normal federal-state jurisdictional lines is not consistent with the framework of a federal system. In a 1937 case, Attorney General of Canada vs Attorney General of Ontario, the privy council observed: “Within the British Empire there is a well established rule that the making of a treaty is an executive act, while performance of its obligations, if they entail alteration of the existing law, requires legislative action. Unlike some other countries, the stipulations of a treaty duly ratified do not, within the empire, by virtue of the treaty alone, have the force of law.”17 At the same time, however, the privy council noted that this practice is simple enough in case of unitary countries but somewhat complex in the Canadian case by virtue of it being a federal system. “There being no such thing as treaty legislation”, the judgment said, “but only a distribution of legislative powers between the dominion and the provinces, the distribution being based on classes of subjects and it being one of the essential conditions in the inter-provincial compact to which BNA Act gives effect, the dominion parliament could not be said to have power to legislate for obligation arising out of treaty and make the same binding on the provinces in [the] face of Sections 91 and 92 of the act.”18
The Supreme Court of India, in the few cases having to do with international treaties and agreements, has affirmed the constitutional position to the effect that
In Maganbhai Ishwarbahi vs Union of India (1969), the Supreme Court, speaking through Justice J C Shah, held:
The effect of Article 253 is that if a treaty, agreement or convention with a foreign state deals with subject within the competence of the state legislature, the Parliament alone has, notwithstanding Article 246(3), the power to make laws to implement the treaty, agreement or convention or any decision made at the international conference, association, or
other body… thereby power is conferred
upon the Parliament which it may not
otherwise possess. But it does not seek to
circumscribe the extent of power conferred
[on the central executive] by Article 73.
If, in consequence of the exercise of
executive power, rights of the citizens or
others are restricted or infringed, or laws
are modified, the exercise of power must
be supported by legislation; where there
is no restriction, infringement of the right
or modification of the laws, the executive
is competent to exercise the power.20
This judgment of the Supreme Court was endorsed in the P B Samant vs Union of India case (1994). A petition was filed in the Bombay High Court invoking its power to issue a writ of mandamus under Article 226 to restrain the union of India to enter into the final treaty relating to Dunkel proposals without the prior consent of the Parliament and state legislatures. It was contended that the intended treaty would affect agricultural products, irrigation facilities, and raw cotton which fall within the jurisdiction of state legislatures. The court overruled these contentions and endorsed the earlier decision of the Supreme Court in the Maganbhai Patel case. “It is undoubtedly true”, surmised the court, “that the executive power of the central government flows from the provisions of Article 73 of the Constitution of India. It is equally true that the proviso set out that the executive power shall not, save as expressly provided in this Constitution or in any state, extend to matters with regard to which the legislature of the state has the power to make laws.”21 In other words, the central executive has the power to conclude treaties, but it has no power to legislate for the purpose of implementing these treaties – a power that rests with the state legislatures or the Parliament (Article 253).
Notwithstanding the above judgments, the Supreme Court, in Vishaka vs State of Rajasthan (1997),22 ruled that international conventions signed by the government of India that are consistent with the spirit of the fundamental rights, even though not exactly in terms of letters of the Constitution, can be read into fundamental rights, although the union and state legislatures may not have passed an implementing legislation to that effect. It, therefore, follows by implication that such judicial expansions of fundamental rights by the courts are equally binding on the government of India and the state governments. Thus, by entering into such international
Economic and Political Weekly January 6, 2007
conventions, the government of India binds itself as well as the state governments.
Problem Areas
In the constitutional scheme, the treatymaking power was treated as a special aspect of executive power. Article 131 of the Constitution dealing with original jurisdiction of the Supreme Court over union, state and interstate disputes adds a clarification to the effect that the Supreme Court’s jurisdiction “shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad or other similar instruments which, having been entered into or executed before the commencement of this Constitution, continue in operation after such commencement, or which provide that the said jurisdiction shall not extend to such a dispute”.23 However, for an activist court like the Supreme Court of India, the inhibition in this article may not stand the litmus test of the doctrine of ‘basic structure’ of the Constitution of which federalism has been declared to be an essential part of the Constitution. Further, Article 131 does not prevent the aggrieved parties to approach the court for a decision on questions of law or of fact on which “the existence or the extent of legal right claimed depends”.24
In the absence of an institutionalised consultation process between the centre and the states prior to making treaties, the exclusive monopoly of the central executive in this area is likely to run into conflict. In respect to participation at international conferences, the centre alone is entitled to send delegations which the state governments may join as a matter of courtesy. This speaks to the ad hoc nature of the consultation process which is certainly a fertile ground for tensions between the union and the state governments. For example, at least three petitions, one each by governments of Tamil Nadu, Rajasthan and Orissa were filed in the Supreme Court under Article 131 of the Constitution. The cases have been withdrawn but the pressure from the SNGs for participation in the treaty-making power is not likely to disappear in the growing context of federalisation within and globalisation without.
There are other unanticipated problems that the treaty-making power of the union may give rise to in the context of India’s growing integration with global and supranational regional economies. For example, there is a widely shared apprehension that relatively low prices of medicines in India may increase phenomenally as a result of the TRIPS clauses of the WHO treaty. To quote Dhavan:
The Indian Constitution guarantees life and liberty to each person in India. This has been interpreted to include the right to health. Read with the directive principles, there is a positive obligation on the state to ensure the health of persons. If the patent regime is changed or EMR protection is given for drugs and medicine, there would be good public interest reasons for asserting that by virtue of the executive action of agreeing to these patent law changes and committing the legislature to change its laws, the direct and inevitable effect of these changes would be that India would not be able to fulfil its constitutional obligations to its own people…It is these considerations (amongst others) which persuaded the states of Tamil Nadu, Rajasthan and Orissa to raise federal disputes with the union on the signing and implementing of the GATT treaty.25
The economies of the SNGs are affected by trade treaties made in pursuit of globalisation and liberalisation. While some states may be winners in the competition to attract foreign investment, others may be losers in this competition. Market solutions may also generate inequalities within each state as well, endangering its political stability. In other words, the state governments have great stake in the commercial or trade treaties that are concluded by the centre for, in most cases, they have to live with the consequences of such treaties. The Rudolphs see in the dawn of liberalisation the gradual emergence of what they call “a federal market economy” which places an extraordinary burden of responsibility on the state governments:
Our use of the term “federal market economy” is meant to draw attention to the fact that the new imagined economy evokes not only the decentralisation of the market, but also new patterns of shared sovereignty between the states and the centre for economic and financial decisionmaking. This increased sharing shifts India’s federal system well beyond the economic provisions of its formal Constitution. Over the last decade it has become clear that if economic liberalisation is to prevail, it is the state governments and their chief ministers that can and must break the bottlenecks holding back economic growth. Can they and their governments negotiate a path that avoids surrender to populist pressures and yet effectively respond to the inequalities generated by market solutions?26
Obviously, the more the state governments become partners in economic and financial decision-making both in the domestic and external arenas (particularly in trade or commercial treaties), the more effective is likely to be their response to the challenge(s) referred to by the Rudolphs.
In the larger context of new trends in comparative federalism, John Kincaid has conceptualised what he calls “constituent diplomacy” to refer to relations between sub-national political units (states/provinces/cantons/lander) and organisations beyond the boundaries of the nation state or the federal state.27 Rob Jenkins has tried to explore developments in this direction in the recent trends in Indian federalism. Both Kincaid and Jenkins are of the opinion that India is not yet a clear-cut case of constituent diplomacy in the sense defined above. For the Indian states are considerably less autonomous in the area of foreign economic policy than paradigmatic cases of constituent diplomacy. For example, the state governments exercised marginal influence over India’s multilateral talks on agricultural trade at the WHO and other forums. Yet some new trends are noticeable. To quote Jenkins: “During the 1990s (and into the new millennium), several of India’s state governments conducted negotiations and concluded agreements with international economic institutions such as the Asian Development Bank and the International Labour Organisation. Some bilateral aid agencies, like the United Kingdom’s department for international development, have begun to focus much of their efforts directly on state governments as well.”28
Concluding Remarks
Notwithstanding Kincaid and Jenkins argument, the fact of the matter is that India cannot speak in different voices to world organisations and international audiences without undermining its credibility. The centre may have the predominant constitutional power in concluding international treaties and agreements but neither the centre nor the states can fully honour treaty obligations unless there is a broad consensus between the two levels of government to do so. The centre, unlike in the old days of one-party dominant system, can no longer coerce state governments into submission to discharge treaty obligations, leaving aside the question whether a particularly treaty or agreement
Economic and Political Weekly January 6, 2007 affects the resources or legislative powers of the states. The situation in Canada is somewhat similar to that of India; the federal government has the power to conclude international agreements, but the Canadian system has come to institutionalise the premiers’ conference(s) as a means to evolving consensus among the provinces prior to the federal government’s agreement on critical international commitments. It is by no means a perfect system – the Kyoto accord to control environmental pollution was signed by prime minister Jean Chretien much to the protest of some provinces, and Quebec always insists on participation with the federal delegation when it comes to signing international agreements particularly in respect to cultural and educational matters. Quebec also maintains its own trade missions abroad though other provincial premiers do trot the globe for more business opportunities for their provinces. Minor difficulties notwithstanding, the Canadian system works through consultation and negotiations between the federal and the provincial governments.
In view of the growing trend of federalisation in India wherein “province” or “state-building” has captured the psychology of provincial leaders and coalitionbuilding at the centre has become a governing mode of administration, it is fortunate that foreign relations particularly having to do with trade treaties, agreements and conventions with foreign countries, even though enumerated exclusively under the centre’s jurisdiction, should be conducted on a broad-based consensus between the centre and the states through a well-institutionalised process of mutual consultation and negotiations. In the absence of such a mechanism, it is likely that the centre will face more and more challenges to its treaty-making powers from the state governments. So far, the Supreme Court has recognised that the treaty-making power of the centre overrides the normal federal-state jurisdictional lines, according to the Constitution, in the limited number of cases it has dealt with (except in the Berubari case29 where the court called for a constitutional amendment for the cession of Indian territory to another country), but the centre’s power is not absolute. International treaties and other agreements can be challenged in the court of law if these are in violation of fundamental rights of the people but more so if they are not in line with the “basic structure” of the Constitution. First, enunciated in the Keshavananda vs State of Kerala (1973),30 the doctrine of “basic structure” as developed by the Supreme Court gives the court the power to review the constitutionality of any legislative and executive action if it is not in conformity with the basic structure of the Constitution. This doctrine is still in the making, but federalism has certainly been recognised as falling within the ambit of “basic structure”. Before treaty-making and treatyimplementation conflicts become the burden of the Supreme Court of India to settle, it will augur well for centre-state relations if some cooperative mechanism is put in place whereby the state governments become partners with the centre in concluding international treaties, accords and agreements.
EPWEmail: rekha_du_2000@yahoo.com
Notes
1 V R Krishna Iyer, Constitutional Miscellany
(Lucknow: 2003) p 10. 2 Ibid; ch II. 3 Ibid; p 11. 4 Ibid; p 22. 5 Ibid; p 14. 6 Report of the National Commission to Review
the Working of the Constitution, Vol I, Delhi, 2002, p 165.
7 Lloyd I Rudolph and Susanne Hoeber Rudolph, ‘Iconisation of Chandrababu: Sharing Sovereignty in India’s Federal Market Economy’, Economic and Political Weekly, Vol XXXVI, No 18, May 5-11, 2000, p 1541.
8 K M Munshi’s speech in Constituent Assembly, CAD, Book 2, Vol No 7, November 4 and January 8, 1948, pp 984-85.
9 Constitution of India, Article 51. 10 See Justice Iyer, op cit, p 13. 11 Rajiv Dhavan, ‘Treaties and People: Indian
Reflections’, PILSARC Working PaperNo 131,
Old Series, 1996, p 50. 12 V R Krishna Iyer, op cit, p 14. 13 Quoted in V R Krishna Iyer, op cit, p 17. 14M P Jain, Indian Constitutional Law,
New Delhi, 2003, pp 564-65. 15 Ibid, p 214. 16 Ibid, p 565. 17 AIR 1937 Privy Council, p 82.
18 Ibid, p 83, Section 91 of the BNA Act 1867 (amended: Constitution Act 1982) lists the powers of the Parliament; Section 92 lists the exclusive powers of the provincial legislatures; and Section 93 lists education, old age pensions, agricultural and immigration as concurrent powers where both the Parliament and the provincial legislatures can legislate.
19 A boundary dispute between India and Pakistan was referred to an arbitration tribunal. It was argued, based on the decision in the Berubari case, that the government of India could not implement the award without a constitutional amendment. But the Supreme court held that it was not a case of cession of Indian territory, and that the central government could amend the award, treating it as an operative treaty, without any law or constitutional amendment. See M P Jain, Indian Constitutional Law, New Delhi, 2003, p 565.
20 Maganbhai vs Union of India, Hidayatullah CJ, AIR 1969, Supreme Court, p 784.
21 P B Samant vs Union of India, AIR 1994, Bombay 324.
22 Vishaka vs State of Rajasthan, 1997, 6 Supreme Court Cases, p 241.
23 Constitution of India, Article 131. Also see Article 363(1) which excludes the jurisdiction of the courts in disputes with respect to agreements (treated as treaties) concluded between the princely states and the government of India before the inauguration of the new Constitution.
24 M P Jain, op cit, p 255. The court can always make a “declaration” on questions of law or of fact on which the existence of a legal right claimed depends; it may not be able to give relief though it has moved in this direction as well to meet the ends of justice…. State of Rajasthan vs Union of India (1977); State of Karnataka vs State of Andhra Pradesh (1978).
25 Rajeev Dhavan, ‘Treaties and People: Indian Reflections’, op cit, p 29.
26 Lloyd I Rudolph and Susanne Hoeber Rudolph, supra n 1, p 1542.
27 John Kincaid, ‘Constituent Diplomacy in Federal Politics and the Nation State: Conflict and Cooperation’, Federalism and International Relations: The Role of Subnational Units, Hans Michelmann and Panayotis Soldatoes (eds), (Oxford: 1990), pp 55-76.
28 Rob Jenkins, ‘India’s State and the Making of Foreign Economic Policy: The Limits of the Constituent Diplomacy Paradigm’, Publius, Vol 33, No 4, Fall 2003, p 71.
29 In Re Berubari, AIR 1960 SC 845: (1960)3 SCR 250.
30 Keshavananda Bharati vs State of Kerala, AIR, SC 1973.
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Economic and Political Weekly January 6, 2007
