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	Table of Contents
p. 5 of 22 BACK | NEXT Introduction List of Participants Welcoming Remarks Emerging Trends and Issues in Legal and Judicial Reform in Development Bank Legal and Judicial Reform in the Asia-Pacific Region Law and Development Programming at the Asian Development Bank Legal Frameworks for Private Sector Development in the Asia Pacific Region Legal Frameworks for Private Sector Development of Infrastructure in the Asia Pacific Region Collateral Security Reforms Panel Presentations and Discussion Governance: Sound Development Management Strengthening Judicial Institutions Training of Government Lawyers and Judges Lessons Learned: Legal Reform and Technical Assistance 1960-95 Panel Representation and Discussion An Introduction to Project DIAL Concluding Remarks Country Statements

Roundtable Meeting of Chief Justices and Ministers of Justice : Emerging Trends and Issues in Legal and Judicial Reform in Development Bank

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Legal and Judicial Reform in the Asia-Pacific Region

Legal and judicial reform has moved to center stage as an important priority on the development agenda of many of the Bank's DMCs, to a far greater extent than has been the case at any previous time over the past thirty years. As noted by Vice-President Uhel, a notable feature of such recent legal and judicial reforms is that
they have not been driven solely by the perceptions and needs of members of the legal community; they have been driven by the perceptions and needs of senior financial and development policy decision-makers - politicians and technocrats - in such countries. While one may not agree with all of the implications of the statement, this reality was underscored for me in a conversation in New Delhi two years ago with the then-Minister of Finance who said: "These issues [of legal and judicial reform] are too important to achieving the government's development policies to be left to the lawyers alone".

A number of factors have contributed to this emphasis on legal and judicial reform. In the socialist countries of our region we see a transition to market economies; this includes the so-called "transition economies" of the Peoples' Republic of China (PRC), Mongolia, Viet Nam, Lao PDR, Cambodia and the republics of Central Asia which were previously a part of the Soviet Union (among Bank members, Kazakstan, Kyrgyz Republic and Uzbekistan). In many of the non-transition economies of our region, we see governments re-embracing market principles after many years of heavy government intervention in the economy; we might term these "liberalizing economies", and they include India, Pakistan, Bangladesh, Sri Lanka and other DMCs in South Asia and in the Pacific. In both transition economies and liberalizing economies, legal and judicial reforms are being undertaken to foster development of a vigorous private or non-state sector, to respond to the requirements of the globalization of world trade (including the World Trade Organization regime and the market liberalization imperatives of APEC and other subregional groupings), and to make governments more responsive to expectations from their own citizens for better governance, better and fairer judiciaries, less arbitrary government actions, less corruption and greater accountability of government officials and institutions.

In the transition economies we have seen an almost unprecedented succession of dramatic legal reforms, building the basic legal frameworks for commercial and financial activity in a market economy. Since embarking on the path towards a market economy in 1978, the PRC has enacted 100 major codes and laws; during that period in total more than 3,000 new laws and regulations have been enacted or promulgated. As of September 1995, Mongolia had enacted 117 laws (i.e., major acts and excluding implementing regulations), of which only 9 existed before 1990, the year when Soviet domination ended. In these and other transition economies such legal reforms have covered a vast range of substantive and procedural subjects, including civil codes, commercial codes, negotiable instruments laws, mortgage and other collateral security laws, new criminal codes and codes of criminal procedure and in some cases administrative procedure laws, new laws governing limited liability companies, joint stock companies, partnerships and cooperatives, and laws providing for the establishment and regulation of stock exchanges and other financial and capital markets. The pace, scope and depth of such legal reforms in the transition economies has been breathtaking; in some cases, it outpaces the dramatic twenty-year period of legal reforms in Japan in the last century, during the early years of the Meiji Restoration when Japan adopted French and German legal models to the conditions of an emerging market economy in Japan and to Japanese traditions and circumstances. In today's transition economies, as during the Meiji Restoration a century earlier, the process of reform has gone beyond the enactment of new laws and regulations. It has extended to building legal education and research facilities, to building, staffing and improving the courts, to strengthening the role, functions and quality of justice ministries, to strengthening national legislatures, and to building a skilled legal profession.

Within the liberalizing economies the legal foundations of a market economy were established many years ago. If the transition economies are building legal frameworks from the foundations upwards, the liberalizing economies are engaged in remodeling and redecorating an established edifice. In the liberalizing economies many of the legal reforms seek to peel away layers of government licensing and other regulatory requirements from the existing, underlying structure of commercial and financial laws; other reforms seek to update and energize established legal and regulatory regimes by reforming companies laws and establishing independent securities commissions; yet other reforms establish new regulatory regimes to deal with sectors of the economy which were previously the subject of government monopolies and are now opened to competition, such as the telecommunications, electricity, gas, water supply and highways sectors. The problem of court congestion has been the focus of particular attention in the face of sharp criticism from the business community that the inefficiencies of the courts and, in some instances, corruption in the courts have undermined the central importance to a market economy of enforceable contracts and enforceable property rights. Legal and administrative reforms have been undertaken to improve the effectiveness of the courts, and alternate dispute resolution mechanisms - conciliation, mediation and arbitration - are being encouraged.

While the specific legal and judicial reforms have varied from country to country, I think it is possible to identify the principal areas which have been the focus of recent reforms in both the transition economies and the liberalizing economies. In my view these principal areas of legal reform have involved:

• creating legal frameworks for commercial and financial activity in a market economy, with a particular emphasis on companies, partnership and cooperatives laws, central banking and commercial banking laws, collateral security laws, taxation laws (involving both direct and indirect taxation), insolvency laws and labor laws;

• providing greater access by the business community and by the public generally to information about laws and regulations, through Government gazettes, through public education and legal literacy activities and, for the benefit of foreign investors, through authorized translations of economic legislation and regulations;

• creating the enabling environment for the corporatization and privatization of state enterprises;

• creating new regimes for the regulation of securities markets and for the regulation of de-monopolized sectors of the economy, including telecommunications, electricity, highways and other infrastructure sectors;

• reforms of criminal law and criminal procedure, particularly in the transition economies, to provide greater protection of citizens from political and other abuses of the criminal process;

• creation of administrative procedure or administrative litigation laws to establish greater accountability of government officials;

• reforms to improve the efficiency of courts, including reforms in legal procedures, the creation of judicial training academies for judges and court administrators, and the devotion of greater government budgetary resources to the judiciary; and

• creation of environmental law regimes and other social legislation, such as pension laws.

These legal reforms have not involved the slavish emulation of foreign models, even in the liberalizing economies whose underlying legal systems historically have been based on English common law or European civil law models. The Asian Development Bank last year commissioned a major study by legal and economics scholars in six Asian countries to document and compare the development of their legal systems during the period 1960-95, a period of rapid economic and social development. That study, coordinated by the Harvard Institute for International Development (or "HIID" -- during the course of the day you are likely to hear a number of references to the HIID study), is to be presented at a Symposium at the Bank in two weeks' time. Among its observations is that legal reform in the countries studied (Japan, Korea, PRC, Taipei,China, India and Malaysia) during the thirty-five year period was an eclectic process, drawing on legal precedents and models from many countries and most often on a case-by-case basis only influenced in part by the "historic legal tradition" of the country. At the same time it noted that, particularly during more recent years, American models have been particularly influential. I would add that in some countries, the new Dutch Civil Code and the new Russian Civil Code (itself influenced by the Dutch Code) appear to have been particularly influential.

The reform process of more recent years has involved some notable successes. Court congestion is being reduced in the Indian Supreme Court. Economic lawyers and courts are functioning in the PRC and Viet Nam. Public access to laws and regulations is improving in the PRC and other transition economies. Environmental law and legal rights organizations are playing an increasing role in Indonesia. I could cite a number of such examples from virtually every one of the countries represented here today.

The process is, however, far from complete. We must be particularly sensitive in recognizing the critical distinction between the enactment of laws and regulations and their effective administration and enforcement. We must focus particularly on the adequacy of the financial and human resources which governments are devoting to the administration and enforcement of their newly enacted laws and regulations, not only through ministries of justice and the courts but also through line ministries and agencies charged with the administration or oversight of such laws and regulations. Particular attention needs to be focused upon the adequacy of continuing legal education or in-service training of government lawyers and judicial personnel in such rapidly evolving legal regimes. One step further removed, attention needs to be focused on the adequacy of basic legal education and on the community of legal academics as teachers, trainers and researchers.

We must be frank in recognizing that problems remain on the road to legal and judicial reform. In some countries, authority within the legal system remains seriously fragmented and legal institutions are engaged in almost perpetual, and sometimes paralyzing, conflict. Adequate consensus may not exist within government on the necessity for new enacted laws and regulations, despite their enactment or promulgation. The budgetary and human resources rationally needed to effectively administer and enforce such new laws and regulations are often in short supply, at times due to competition within government for limited resources but in other instances as a result of a conscious decision by politicians or senior technocrats to emasculate the effectiveness of laws with which they or their constituents disagree. Access to courts, lawyers and legal services remains unequal. Some critics claim that legal reforms are serving narrow economic elites rather than broader societal interests.

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