From Humble to Jumble: the Role of Law in Post-Independence Azerbaijan

Azerbaijan’s dilemma

The modern Azerbaijan Republic’s legal system had a humble, and strife-riven, start to life. When the Soviet Union collapsed in 1991, Azerbaijan was left with a legal dilemma. There were in existence basically two bodies of law – laws, rules and regulations passed by the legislative bodies of the Azerbaijan Soviet Socialist Republic; and the legislation of the Soviet Union, including all the multilateral and bilateral treaties to which the Soviet Union was party. Azerbaijan in large part denounced the laws of the Soviet Union, including most of its treaties, retaining a handful of fundamental laws, primarily the Codes covering such matters as civil, housing and employment law. Faced with war with Armenia (the ceasefire not materialising until May 1994), a dislocated and collapsing economy and a loss of faith in the Azerbaijani currency, the country moved quickly to try to attract foreign investment and foreign advisers. As part of this process, the author was the first (and perhaps only) foreigner to be a member of a parliamentary commission.

In 1992, Azerbaijan enacted the law On the Protection of Foreign Investments, a piece of legislation still in force (in an amended form) though not always applied. As part of this early investment-friendly climate, in 1994 Azerbaijan also signed the first of its new double taxation treaties. It was with the United Kingdom, which was about to become Azerbaijan’s biggest foreign investor. That treaty was the first in what is now a well-trodden path.

And, with great fanfare, in September 1994 the Contract of the Century was signed with oil companies for the development of the Azeri, Chirag and deepwater Gunashli fields. From a legal perspective, this agreement was an important milestone, being subsequently passed into law and thereby setting a precedent followed to this day not just in the realm of offshore exploration, development and production of hydrocarbons but also for some onshore fields, the main oil and gas export pipelines, and for certain gold-mining ventures. Although the exact legal status of such agreements passed into law has never really been clear, they have formed a foundation for the economic development and political stability of Azerbaijan.

The double tax treaty made with the United Kingdom was not only the first of many but was perhaps exemplary of another dilemma which Azerbaijan faced in its early days: the English-language version was the only official text as an Azerbaijani draft could not be prepared in time for the signing ceremony. The reasons for this could be many but one possibility could have been that few of Azerbaijan’s senior lawyers and not many of its ministers at the time had a sufficiently sound knowledge of the Azerbaijani language to allow them to draft laws (or treaties) in Azerbaijani, even using the Cyrillic alphabet. To this day, though the situation is much improved, that continues to be a problem bedevilling legal draftsmen in Azerbaijan.

The Millennium Bug

The second-half of the 1990s saw some major legislative developments, especially in the start of a process of privatisation. The process was mired from the outset in controversy, having been launched using a flawed voucher scheme whereby all citizens were given vouchers in theory meant to represent a share in the states’ property but in practice being almost worthless (except to a lucky few). By the end of the ‘90s, privatisation had begun in earnest and Qaradagh Cement was amongst the first of the major state-owned enterprises to be privatised.

The turn of the century also brought a spate of vigorous legislative action, infecting the Milli Majlis like a computer virus. By mid-1999 we had a new Labour Code in force, updating the old Soviet version and incorporating the requirements of dozens of International Labour Organisation conventions that Azerbaijan had acceded to. The Labour Code was followed swiftly in 2000 by new Tax, Family, Civil, Criminal, Administrative Offences and procedural Codes. There would be many more in the years to follow. But the much-talked of draft law On Oil & Gas remained in the cupboard collecting dust.

This flurry of activity in law-making evidenced both enormous hope and goodwill but also highlighted some of the deficiencies of the legislative process.

On the positive side was the fact that both the Labour Code and the Tax Code genuinely sought extensive public consultation, both being published in draft in the newspapers. Comments were not only elicited but acted on, this author personally appearing before two parliamentary committees and spending several hours with the generous-spirited draftsman of the Labour Code in considering various amendments to the draft. Alas, this open consultative process has never been repeated in such a fashion.

The negative side of the spewing forth of legislation was its quality. Some of it was not the fault of the legislators but of the foreign consultants advising on the drafting of the laws. In essence, the problem lay in the poor command of Azerbaijani legal terminology by all concerned. The best lawyers, educated in the Russian-language sector, struggled with the texts, first mentally composing their sentences in Russian and then putting them into a stilted form of Azerbaijani. Matters were made even worse when foreign consultants were involved: they would draft in a foreign language, which would then be translated into Azerbaijani by lawyers whose primary language was Russian and, when used by foreign lawyers, would be translated back into English through the same convoluted process. The result was often a jumble of words making little sense.

The next challenge

Legislation has continued to pour out of the Milli Majlis, the President’s office, the Cabinet of Ministers and a plethora of ministries at an ever-increasing rate. Too much legislation. Most legislation today originates not with the Milli Majlis but with the President’s office. That makes the Milli Majlis more or less irrelevant in the legislative process and places an enormous burden on the shoulders of the President’s experienced but small and over-worked legal team. It must surely be time for the deputies of the Milli Majlis to shoulder a greater share of this burden and to perform the job for which they have been elected, namely the introduction, scrutinising, and amending of primary legislation.