Rule of Law

Within the past week, a U.S. District Court vacated Ken Lay's convictions for corporate fraud at Enron. In vacating the convictions, the court applied long held precedent that criminal convictions get posthumously vacated when the defendant expires before all of his legal appeals. This is an elegant rule for it supremely recognizes that a person has the right to participate in their defense, and absent this ability, a criminal conviction should not adhere.

While this result has stirred certain calls for "corrective" legislative action, I believe that such calls are short sighted and wrong headed. The Rule of Law should be respected, even when, on occasion its application leave results we may not be wholly satisfied with.

What does this have to do with Vietnam? Recently, a high ranking government official, in issuing a warning about life there, noted that one could be arrested and held indefinitely by the government without charge. While a cynic would note that this only makes Vietnam all that much closer to American jurisprudence (Military Commissions Act of 2006, anyone?), it illustrates the important function that the Rule of Law would help a place, especially a place that is looking for further development.

Knowing that there are defined rules, and that those rules will be applied fairly, will only help VN attract economic development. One of my concerns about VN is that the government will pull the rug from under me - perhaps this is naivete developed through knowing so many older Southern Vietnamese Viet Kieu, but it is something I think about on occasion.

In the corporate world, lots of MBAs walk around thinking that Legal is a cost center that needs to be managed and minimized - they don't realize that deals don't get done without an established legal regime undergirding and backstopping the deals. Even without a written contract, unspoken legal parachutes, like the doctrine of fiduciary duty, protect the parties involved and therefore move the ball forward.

Places like Vietnam are, maybe mistakenly, viewed as the 'wild, wild west' (or is it the 'wild, wild, east?'), where there is little by way of firm rules and regulations. In such a vacuum, hopefully, the country will develop an elegant legal framework, with which to order economic activity (and society, though that may be asking too much given the socialist government); I just hope that as the legal structure further develops, the country resists attempts at carve-outs and exceptions, which invariably weakens the Rule of Law.