Establishing the Rule of Law in Ukraine: Building a Modern Society

separated from law and justice he is the worst.”

Aristotle wrote this line over 2,300 years ago, and it remains relevant as we gather here today to discuss the importance of the rule of law in a successful, modern society. One interpretation of Aristotle’s statement would be that, in the absence of rule of law, there is no society – at least not one that is truly civilized.

One of the hallmarks of the 21st Century is that, at least in terms of perception, the world is getting smaller. Individuals throughout the world are now much more able to observe instantly new developments in diverse societies. Throughout the world we are seeing individuals stand up and proclaim that they would prefer to live in a democratic society governed by a genuine rule of law – a place where no man or woman is above the law and all leaders are accountable. I would suggest that the health of a democratic society largely corresponds to the degree to which it is ruled by its own laws. Today I would like to focus on a few distinct themes:

• first, that the rule of law is a prerequisite to a democracy,
• second, that without a reliable justice system, economic development opportunities in a globalized world will be severely limited,
• third, that today Ukraine stands poised to adopt meaningful reform, if it chooses to do so, and,
• finally, what this all means to you as Ukrainian law students.

You may well ask, what do I mean when I invoke “rule of law”? As a diplomat, this has been a major theme of my work for over 40 years. A serviceable definition could be taken from an explanation of the concept found in a 2004 Report of the U.N. Secretary General on the rule of law. It reads:

"For the United Nations, the rule of law refers to a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency."

These principles all lie at the heart of many of the issues that occupy much of my time as U.S. Ambassador to Ukraine. The rule of law is an ideal that no country can perfect; all countries must constantly reform their systems to meet new demands and circumstances.

Last December, Mykola Siruk in an interview for Den’ asked me why I have spoken so often about the need for judicial reform and other steps to strengthen rule of law in Ukraine. I told him that I strongly believe, as does the United States government, that the rule of law is fundamental to the success of any modern, democratic nation. All people in a society – citizens and noncitizens – must know that they have access to public justice when they believe they have been harmed. People suspected of crimes must believe that a system of laws is in place which ensures transparent and fair treatment. Businesses must know that if their contracts are not honored there is a real possibility of redress. This is important in the context of the U.S. Embassy’s work here, because a core part of our mission is to help the Ukrainian people achieve their goal of a prosperous, democratic, and independent state that is integrated into European institutions. None of these elements can be fully achieved without the rule of law.

I can also refer you to an excellent article from the March/April 1998 issue of Foreign Affairs, entitled “The Rule of Law Revival.” In it, Thomas Carothers of the Carnegie Endowment for International Peace warned against the dangers of a formulaic approach to the rule of law, where it is viewed as a “a panacea for the ills of countries in transition from dictatorships or statist economies.” He nonetheless endorses this central focus of Western diplomats working in countries struggling to become market democracies and warns that “rewriting constitutions, laws and regulations is the easy part. Far-reaching institutional reform is arduous and slow.” I can tell you from experience that the easy part is not, in fact, all that easy. Indeed, Carothers continues: “Western nations and private donors have poured hundreds of millions of dollars into rule-of-law reform, but outside aid is no substitute for the will to reform, which must come from within.” He describes three levels or “types” of reform:

• type one focuses on reforming the laws and regulations;
• type two strengthens law-related institutions and increases their competence, efficiency, and accountability; and
• type three aims “at the deeper goal of increasing government’s compliance with the law” and “achieving genuine judicial independence.”

Various U.S. Government programs aim to assist with these first two types and help the Government of Ukraine move towards ultimate implementation of the third. The U.S. Agency for International Development, Department of State, Department of Justice, and other agencies are all engaged in this work with their Ukrainian counterparts as well as Ukrainian and international Non-Governmental Organizations, the European Union and other donors, and the private sector.

RULE OF LAW AND DEMOCRACY

A focus by foreigners on rule of law in another country is admittedly a combination of altruism and self-interest. Our self-interest in promoting the rule of law in order to preserve democracy in Ukraine stems from Ukraine’s large population and its geopolitical importance at the center of Europe and the eastern border of the European Union. We have a vested interest in stability in this important part of the world and believe that a democratic Ukraine will promote stability. Our altruistic motivations stem from our fundamental belief in human rights and our desire to see people around the world enjoy the same inalienable rights we claimed and protected in our Declaration of Independence and Constitution. Many of these same rights have since been recognized in the Universal Declaration of Human Rights, the International Covenant on Civil and

Political Rights, and in countless constitutions around the world, including Ukraine’s.

Of course, declarations, treaties and domestic laws do not protect these rights unless those in positions of authority actively work to uphold them – and are themselves subject to them. In the history of the United States, there have certainly been occasions where good laws were enacted, but not enforced by executive or judicial authorities.

The most shameful examples occurred in almost 100-year period after the American Civil War, when our Constitution was amended to grant African-Americans the same rights as all other Americans, but many of our politicians, courts, and governmental institutions turned a blind eye to blatant violations of African Americans’ rights. But Theodore Parker, an American activist against slavery before the American Civil War once noted, as paraphrased by Dr. Martin Luther King Jr., “The arc of the moral universe is long, but it bends toward justice.” Over time, as a result of bravery and suffering of many civil rights activists, the US rule of law was extended to African Americans.

Dr. Martin Luther King Jr. noted that “It may be true that the law cannot make a man love me, but it can keep him from lynching me, and I think that's pretty important.” What is of greatest interest about this statement is not the irony that the law was unable to prevent Reverend King’s assassination, but the fact that even a civil rights leader with many enemies in an era of segregation could have confidence in the rule of law, and trust that the law’s protections would apply to him. While of perhaps little personal comfort to Dr. King, it is significant to the rule of law that his assassin was brought to justice.

As I have noted on other occasions, the events of the past few months here in Ukraine have shown just how important a fair, independent, and accountable judicial system is to the further development of Ukraine’s democracy. The lack of professional independent courts, or even the perception that courts are not free, undermines faith in the justice system. If people perceive that they have unequal access to the courts or see selective prosecution of the political opposition, they will conclude that the judicial system is unfair and politicized, and this will erode their faith in the institutions whose primary function is to guarantee their rights. This has a horrible impact on the willingness of society as a whole to respect the law and to act in accordance with the established rules.

Carothers wrote in his article for Foreign Affairs, “Shoring up the rule of law helps temper two severe problems – corruption and crime – that are common to many transitional countries, embittering citizens and clouding reform efforts.” How are citizens to trust leaders they perceive as using the organs of power to enrich themselves at the people’s expense when they say some painful reform is necessary? How can they trust the courts and law enforcement bodies to protect their rights when they see moneyed and politically-connected individuals enjoy an “untouchable” status that allows them to flout the laws with impunity? While the rule of law cannot guarantee that there will be no corruption – or that civil rights leaders will not be victims of violence – it can ensure that there will be consequences for those who violate the law. U.S. laws did not prevent former Illinois governor Rod Blagojevich from pressuring businesses for donations or attempting to sell an appointment to the Senate seat Barack Obama vacated when he became President, but they did allow our justice system to try Blagojevich and upon conviction sentence him to 14 years in jail for his crimes. He is the third governor of Illinois in the past couple of decades to have been convicted of corruption in office and sentenced to prison.

RULE OF LAW AND ECONOMIC DEVELOPMENT

For the year-end issue of Ukrainsky Tyzhden, I wrote an article about the need for legal reform in Ukraine, arguing in part that “the importance of rule of law to economic development cannot be overstated.” Courts must reliably settle disputes and uphold contract obligations fairly and consistently; otherwise, entrepreneurs and foreign investors will look to other markets, not wanting the profits from their hard work to be stolen by rivals or corrupt officials. Here in Ukraine, in the absence of reliable protection of physical property rights and intellectual property rights, the business climate will remain weaker than its potential, and many of the best-educated will seek to leave the country for greener pastures. Foreign businesses will think twice before investing when they have alternatives in more predictable and more welcoming markets. Many potential investors hesitate because they have heard stories of foreign businesses who have encountered severe problems with the inconsistent application of the law, whether to protect them from corporate raids or to ensure the timely reimbursement of VAT payments.

It does not have to be that way. Ukraine boasts a well-educated and hard working population. Ukraine has the natural and human resources and capacity to achieve what neighbors like Poland have – there, even as Western economies were collapsing into recession, some of the same companies that were downsizing radically in places like Ireland were hiring in Poland, which was the only country in the EU in the recent crisis to avoid recession. While the rule of law is obviously not a shield against recession, it is a critical element among necessary economic reforms that can render an economy stronger and more resilient.

Moises Naim, former Venezuelan trade minister, World Bank Executive Director, and internationally famous writer and editor (and the man who revived Foreign Policy magazine), argued that the first phase of market reform is driven by senior officials making large-scale policy decisions, while the second phase requires building institutions – including tax, customs, and antitrust agencies – and improving government’s relations to business. He argued that strengthening the rule of law is integral to the second phase. At various points over the past twenty years of independence, Ukraine has undertaken some of the necessary reforms required for phase one, but much work remains, both in enacting further reforms and, most essentially, in institutionalizing and implementing those changes.

It is easy to see how much foreigners perceive the need for improvement of the business and investment climate here. Look at the international polls that track investment. Let me just give you four examples in which Ukraine falls below almost every European country. In Transparency International’s corruption perceptions index, Ukraine is No. 152 out of 182; in the Index of Economic Freedom of the Heritage Foundation, Ukraine is 163 out of 183 – several spots below Belarus; in the World Economic Forum Global Competitiveness ranking, Ukraine is 83 out of 142; and in the World Bank’s Ease of Doing Business report, Ukraine is 152 out of 183. These organizations that measure progress on economic reforms and building a better business climate see backsliding, not progress.

To be fair, however, Ukraine is slowly making progress in some areas related to improving the legal and regulatory framework for business. The U.S. Embassy, the American Chamber of Commerce in Ukraine, and the EU have been particularly active in working with the Verkhovna Rada, government decision makers, and the business community to help Ukraine draft solid laws that will give businesses a chance to flourish and grow. Some good laws have been passed, and we can only hope that they will be properly implemented and enforced. The new tax code, which went into effect last year, and the new draft customs code, which should come into effect in January 2013, are two good examples of these much-needed reforms. However, these new laws will only work when all the individual tax inspectors and customs inspectors understand and respect the law. Implementation is critical.

Of course, rule of law as it relates to business goes further than just effective legal institutions. To move up the rankings in business and investment climate, Ukraine urgently must improve its administrative procedures to bring them in line with those that govern commercial issues in the vast majority of the world’s most developed economies. Routine business matters are hindered by a lack of clarity, such as knowing what tariff line (and hence tariff rate) applies to a specific product. Even unintentional errors based on these poorly written guidelines often escalate almost immediately into criminal charges. Nothing scares foreign businesses faster than threats not just to profits but to freedom, and tactics of this kind do send chills down investors’ spines. Unclear and cumbersome regulations are in invitation to invest elsewhere.

In 1999, then President of Romania Emil Constantinescu noted that legal reforms undertaken in his country would enable the nation to move from the law of force to the force of law. This is what international investors are looking for, and what Ukraine should be able to deliver. And it is not just foreigners who are looking for firm establishment of rule of law; a recent poll showed corruption – the antithesis of law – to be the number one concern among Ukrainians.

LEGAL REFORM CHALLENGES FACING UKRAINE

So what reforms, specifically, are we encouraging the Government of Ukraine to undertake on a priority basis? None are more important to the rule of law than establishing a strong, independent, and corruption-free judiciary. Equally important is the establishment of a more reliable and fair criminal justice system, which will begin with the adoption of a criminal procedure code consistent with European norms. USAID, the Department of Justice, and other agencies of the U.S. Government have worked closely with Ukrainian authorities, the European Union, and the Council of Europe to make proposals to conform these laws to international and European standards and the recommendations of the Venice Commission and the Council of Europe in particular.

Andrew Jackson, the seventh President of the United States of America, declared, “All the rights secured to the citizens under the Constitution are worth nothing, and a mere bubble, except guaranteed to them by an independent and virtuous judiciary.” It is no secret that Ukrainians do not believe that their legal system – criminal or civil – is independent of political interference. Many international observers agree, and not solely based on the appearance of selective prosecution of political opposition leaders in recent months. There are many other indicators of a dysfunctional legal system, including the sense that corporate raider activity is on the rise, with the assistance of some lawyers, prosecutors, judges, and law enforcement agents. Moreover, Ukraine’s abysmal record before the European Court of Human Rights suggests serious problems. In 2011, Ukraine ranked third from the bottom, with 105 judgments against the country. Adverse rulings included the following violations: Length of Civil and Criminal Proceedings (66 individual instances), Right to Liberty and Security (42), Right to a Fair trial (21), and Inhuman or Degrading Treatment (15).

To be sure, within the past two years, the Verkhovna Rada has adopted new laws on the Civil Service, Free Legal Aid, and countering corruption, Trafficking-in-Persons, and Money Laundering. If effectively implemented, these laws could help Ukraine address a number of problems cited in the 2010 report of the Parliamentary Assembly of the Council of Europe, or PACE, including those related to access to justice, improving the capacity of Ukraine’s bureaucracy to govern effectively, and protecting and assisting Ukraine’s most vulnerable populations.

Likewise, the passage of the new electoral law, with enough compromise to gain the support of much of the opposition, will hopefully help to improve the conduct of free and fair elections – again, if properly implemented. The passage of the law on Access to Public Information also has the potential eventually to increase government transparency considerably, and hopefully accountability as well. In the United States, the Freedom of Information Act is an incredibly powerful tool for the press, civil society, and the general public to fight corruption, government excesses and misconduct, and to demand change. Whether Ukraine’s law will have a similar effect will depend upon how forcefully the public demand compliance and whether an independent judiciary will enforce it. Senator Robert Kennedy once said, “Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on.”

JUDICIAL REFORM

Let me turn to judicial reform. There can be no doubt that the Law on the Judiciary and Status of Judges passed in July 2010 was a much needed step forward, but significant changes are required to bring it in line with the recommendations of the Venice Commission. Many important reforms were codified in the law, including fair, transparent, and merit-based judicial selection and disciplinary procedures, the random assignment of cases, and the posting of judicial disciplinary decisions and a judicial misconduct complaint form on the Internet. In the areas where the law still falls short, President Yanukovych has ordered further amendments in line with Venice Commission recommendations, which would represent an important next step in advancing judicial reform in Ukraine.

Unfortunately, some of the proposed amendments to the Law on the Judiciary do not advance judicial reform in a manner consistent with European and international standards. In particular, it is critical that all judicial reform initiatives preserve and further the independence of the judiciary and its institutions, including especially the Supreme Court, whose role and status under the new law are a particular concern of the Venice Commission and other international observers, including the United States.

While the importance of bolstering the role of the Supreme Court as the ultimate arbiter of the rights and freedoms of Ukrainians cannot be understated, the independence of all judges is obviously important.  Independence at all levels of courts is threatened by, among other things, the role the prosecution plays in the High Council of Justice, including in exploiting the vague language of the oath of judges which the High Council enforces to intimidate judges who do not grant prosecution requests for detention and specific sentences.  Over the past year, we worked with the Commission on Strengthening Democracy and Rule of Law led by MP and former Minister of Justice Holovatiy on amendments to do that which were sent to the Presidential Administration on December 20. We were concerned to see no reference to these proposed amendments included in the Presidential Administration's recently stated judicial reform priorities and hope that the Presidential Administration considers them as soon as possible and introduces them in the Rada. These amendments would put into place critical improvements to the judicial appointment and discipline processes, and help to restore some of the powers and infrastructure of the Supreme Court.

CRIMINAL PROCEDURE  CODE

The new Criminal Procedure Code which was just passed by the Verkhovna Rada last week was praised in draft by the Council of Europe and European Union leaders for its adoption of European standards.  It is encouraging that President Yanukovych announced his intention to send the final version of the Code to the Council of Europe for a final analysis before signing it. Through our Department of Justice, we worked cooperatively with others in the government to support the drafting of this law.

This law is not perfect and I’m sure unforeseen problems will reveal themselves during its implementation and will need to be fixed. Nevertheless, the law wisely creates a brand new criminal justice system based upon the principle of an adversarial system. In essence the law replaces a prosecutor-dominated system with a system where defense advocates have an enhanced role and the courts are the final arbiters of disputed issues, and the courts are ultimately responsible for protecting the rights of the accused and victims. Significantly, the new Code prohibits the use of evidence which was illegally obtained and expands defendants’ right to and access to counsel before questioning by police and throughout the process. Finally, to ensure the protection of fundamental human rights, this new Code requires that it be interpreted consistently with the European Convention on Human Rights and the European Court’s decisions. This requirement is a truly remarkable change for any post-Soviet legal system.

The new criminal procedure code also gives prosecutors an essential tool for dismantling criminal organizations and conspiracies – the use of guilty pleas and cooperation agreements. In the experience of U.S. prosecutors, it is only through the use of such plea bargains and cooperation agreements that investigators are able to prosecute the higher echelons of criminal organizations, whether the crimes involve fraud, corruption, or human trafficking. This is because the testimony of insiders is essential to identify and prove the roles of various conspirators and to find key evidence and assets.

That is all potentially good news. To make it work, however, prosecutors and police must follow the law — including those provisions which might make their jobs more difficult – and judges must enforce the laws.  For example, suspects and defendants who are not free to leave when approached by police will have to be advised of their rights to remain silent and to be represented by counsel before answering police questions. The Code is structured to make detention the most unusual and not the most common measure of restraint to ensure a person’s appearance for further proceedings. Police will be required to promptly notify family members of the whereabouts of a detained person. If defense lawyers and courts are doing their jobs, it should now be very difficult to deny a lawyer access to his or her client. Without so many involuntary or coerced confessions, real evidence derived from real police investigative work will have to be obtained to detain people and to convict them.

To make your new system work, courts will also be under increased pressure to be professional, independent and accountable, and qualified defense lawyers must play a more dynamic and aggressive role in insisting that their client’s rights be observed by the police, prosecutors and the courts. For example, the law provides for open and adversarial proceedings before a judge – prior to detaining a suspect pending trial. Indeed, it places a burden on the prosecutor to show that no less restrictive measures than detention will suffice to ensure the suspect or defendant’s appearance in court and law abidingness during the investigation and trial. This should be a significant burden for the prosecutor to meet for persons accused of non-violent offenses, and without a history of prior convictions.  To order detention, a judge must issue a reasoned decision, and the period of detention ordered cannot exceed 6 months. To continue to detain a person, the prosecutor must again meet the same burden of proof of no less restrictive alternatives to detention. Detention orders are also immediately appealable by defense counsel.

To make this system work, suspects and defendants must have qualified lawyers who think proactively about how to defend their clients, and when they cannot afford such counsel, the government must provide qualified and independent counsel free of charge.  The Government of Ukraine is wisely reworking to improve its law on the bar and is beginning to implement a free legal aid system under a law passed last year. The transition to defense counsel knowledgeable and qualified to meet these new challenges will be painful but necessary, especially for attorneys already practicing for years under the broken system.

Let me also say a word about jury trials, because most Americans are proud of our jury system and the power that it grants to ordinary citizens to participate in the justice system. The new Criminal Procedure Code allows for a type of “jury” for crimes with the possibility of life imprisonment. The “jury” will be composed of two judges and three lay people and decisions will be made based upon a majority vote. Time will tell whether this system will work as well as a jury of only citizens alone, but I recommend that you continue to closely monitor and debate this issue. Juries can be especially effective in countries with histories of corruption and extraordinary prosecutorial power. Russia’s recent experience with jury trials might also be closely examined; on the whole, the jury system there has reportedly improved both the quality of trials and the perception of the results. While attempts to tamper with juries will undoubtedly occur, and they should be dealt with in a fashion that will deter future attempts, it is equally true that currently attempts are frequently made to tamper with the independence of judges.

SHIFT IN LAWYERS’ MINDSET

Beyond institutional changes to the relative influence of judges, prosecutors, and defense lawyers, a change of culture among lawyers is needed. Changes are taking place as shown by the increasing number of lawyers doing pro bono work, which has become an essential part of the legal profession in much of the world. These “free-of- charge” legal services provide access to the justice system for individuals who otherwise are unable to afford quality legal services. Today, the American Bar Association Model Rules of Professional Conduct urge “all lawyers to provide a minimum of fifty hours of pro bono services annually,” arguing that “personal involvement in the problems of the disadvantaged can be one of the most rewarding experiences in the life of a lawyer.” Attorneys around the world have brought numerous successful human rights cases on issues ranging from political asylum to laws governing non-profit organizations. Pro bono work enhances the reputation of lawyers and their firms, provides opportunities to learn new areas of law, and broadens personal and professional contacts.

Citizens’ access to justice throughout Ukraine remains limited and inconsistent, but pro bono lawyers are now helping prevent individuals from being unlawfully denied housing, from wrongfully losing their jobs, and from being subjected to domestic violence. The U.S. government has been proud to support the work of pro bono attorneys and to present awards to attorneys who have distinguished themselves by their pro bono service over the past two years.

THE ROLE OF UKRAINIAN LAW STUDENTS

I have spoken at length about why I think the rule of law is important and what, specifically, Ukraine most needs to focus on to ensure its firm establishment here. Before I conclude, let me say a few words about why I wanted to deliver this message to you: Ukrainian law students. For the most part, it should be obvious: this is the work in which you will be engaged in the very near future, and its success will depend in a large part on what you do. Albert Einstein once remarked, “As long as I have any choice, I will stay only in a country where political liberty, toleration, and equality of all citizens before the law are the rule.” If these words sound wise to you, it is up to you to make yourselves part of that core group in Ukraine that will ensure that Ukraine is and remains such a country where its citizens will not desire to seek other lands to call home.

Creating a culture of respect for human rights and the rule of law upheld by an accessible and effective justice system requires commitment from the entire legal community in Ukraine, including student law clinics, legal advocacy organizations, public legal aid offices, and law firms, working together in partnership. I encourage all of you to take a firm interest in working to ensure that the needed reforms to establish the rule of law are not only enacted in legislation, but implemented in practice. If there is to be accountability and equality before the law, it is going to require not just the appearance of change, but a new expectation that institutions will function as the law requires. People with a vested interest in the status quo are unlikely to demand this change or to point out where implementation falls short. We foreigners can help, but ultimately it is up to you. This is your challenge.