FUTURE CHALLENGES AND DEFICIENCIES OF ASEAN DSM: HAS THE TIME

FOR ASEAN TO ENHANCE ITS DISPUTE SETTLEMENT MECHANISM?

Vida Azaria
Faculty of Law Universitas Padjajaran, Jl. Banda No.42, Kota Bandung, Jawa Barat 40115,
Email: vidaazariaa@gmail.com , Phone: +6281 5662 3838

ABSTRACT
Keywords: ASEAN, Dispute Settlement Mechanism, Regionalism.

ABSTRAK
Kata Kunci: ASEAN, Mekanisme Penyelesaian Sengketa, Regionalisme.

I. INTRODUCTION

In 1967 leaders of five nations formed The Association of Southeast Asian

Nations (ASEAN), dedicating themselves to furthering the prosperity of the region to
relinquishing the violence that had characterized Southeast Asia States relationships.
With a total population of some 625 million, five more countries joined in the intervening
decades and now ASEAN’s Member States are Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. ASEAN has
delivered well on its primary mission, to keep the peace among a group of member states
with huge diversity in levels of economic development, political systems, cultures,
religions, and size. The launch of a community-building process in ASEAN was pointed
by the signing of the Charter which is supposed to deepen cooperation in the politico-
security, economic and sociocultural domains. Developing a concept of Community
citizenship was not a part of this process. Still, the Charter marked a key event in legal
integration, not just because it conferred a legal personality on the organization but also
because it introduced provisions for legal dispute settlement that went significantly
beyond existing standards.1 This foundation of geopolitical stability has allowed the
economies in Southeast Asia to take off and lift tens of millions out of poverty. As a
whole, ASEAN has enjoyed the third highest growth rate in the world over the past
decade.
ASEAN has played a prominent part in negotiating and managing order in
Southeast Asia and the Asia-Pacific. It has done so during times of stability and during
times of transition and crisis when we would expect the great powers exclusively to play
the leading role. During the early stages of its consolidation as a fledgling regional
organization, ASEAN’s formation was crucial for negotiating order in Southeast Asia.
Through ASEAN these states developed a framework for managing their relations,
avoiding conflict and disputes and cooperating to promote economic development and

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LEGAL INTEGRATION: REGIONALIZING JUDICIAL AUTHORITY, hlm 116
regional resilience. An inevitable feature of increased cooperation through bilateral,
regional and international arrangements is the emergence of disputes over the
interpretation and implementation of the agreed upon commitments. In particular,
disputes have arisen due to conflicting interests, needs, or opinions of participating states.
Accordingly, reliable mechanisms for disputes settlement have become necessary to
ensure the effective and continued functioning of these arrangements.
ASEAN developed a norm of non-interference, establishing that inter-state
relations within Southeast Asia would be norm-governed. While subsequent treaties have
laid down standard norms of international law and diplomacy binding on ASEAN
Member States, inter alia, the peaceful settlement of disputes, ASEAN leaders and
diplomats have developed a set of decision-making procedures characterize by an
informal, working style that they are expected to follow, the so-called ASEAN Way. The
ASEAN Way involves minimal institutionalization, the emphases on dialogue,
consultation and consensus, quiet diplomacy, a non-confrontational approach, and non-
interferece in domestic affairs has been utilized to reduce tensions among ASEAN
Members. In reality, ASEAN Way has been successful in preventing political conflict
but it has not been as successful in preventing disputes over trade. However, ASEAN
Way has been criticized as rhetoric and hyperbole that ASEAN officials indulge in
defensively to deflect attention from the grouping’s shortcomings in ensuring more
substantive cooperation. The ASEAN Way is under challenge in terms of managing
interstate conflict as well. The decline of political authoritarianism and rise of democracy
in the ASEAN domain undermine the government’s freedom in managing interstate
conflict.
ASEAN found itself compelled to adjust to the changing realities and redefine its
role as a regional actor. To be sure, the role it has taken in trying to manage regional
conflict during the height of the Cambodian crisis was no longer sufficient. The changes
that had taken place, both in the international and regional environment in four years
since 1989, had been extremely significant and these changes portend to the need for
ASEAN to adjust its old approaches to a new set of realities. Changes in the regional
context of conflict appear, among others, in the freedom of the press and an expanded
space of operation for actors in civil society, which can impact on conflict avoidance
through self-restraint, which used to be the main strategy of managing interstate conflict
in the ASEAN region. Gone are the days when this type of conflict was handled by and,
as it were, buried in the bilateralism of the conflicting countries. As conflict gushes out
openly from hitherto and apparently smooth bilateral relations, ASEAN as a prime
regional organisation is hard pressed to respond officially and differently than before.
The sea-border zone between Indonesia and Malaysia, called the Ambalat, off the eastern
coast of the Borneo/Kalimantan island and the Thai-Cambodian border area where the
Preah Vihear Hindu temple is located represent such a new challenge to the management
of this type of conflict in the region.
ASEAN has a clear procedure and mechanism of dispute settlement which are the
range from informal models depending on negotiations to formal mode as arbitration.
The ASEAN DSMs is cited under Chapter VIII (Settlement of Dispute) since Article 22
to Article 28, which were designed to link up between an existing ASEAN DSMs
instruments before the Charter such as the Treaty of Amity and Cooperation in Southeast
Asia (TAC 1976) and ASEAN Protocol on Enhanced Dispute Settlement Mechanism
 (Vientiane Protocol 2004), and the new ASEAN DSMs instruments such as Protocol to
the ASEAN Charter on Dispute Settlement Mechanisms (PDSM 2010), Instrument of
Incorporation of Rules for Reference of Unresolved Disputes to ASEAN Summit (2010),
Instrument of Incorporation of the Rules of Non-Compliance to the ASEAN Summit
(2012), Rules for Reference of Non-Compliance to the ASEAN Summit (2012), Rules of
Procedure for the Interpretation of the ASEAN Charter (2012). However, the fact
obviously shows that in the history of ASEAN, any disputes among the ASEAN Member
States has never been applied the ASEAN DSMs under Chapter VIII of the Charter even
once. The zero case in the ASEAN DSM becomes big question. Does really no case
brought among the AMCs? Or there are other problems. Since one or two ASEAN
Member Countries have been a complainant, respondent or third parties in WTO DSM.
For example, Indonesia has been complainant in 10 cases, as respondent in 13 cases and
as third party in 13 cases.
Questions were raised as to the relevance of ASEAN’s prevailing security
approaches that mostly emphasized improving bilateral relations and focusing on national
resilience. Therefore, the crucial questions confronting ASEAN at that time were, how it
was going to define its role and calibrate its approaches in an increasingly complex global
political, economic, and security environment. As ASEAN evolves into an integrated
economic community by 2020, disputes over trade matters will only become more
complex and more numerous. The other factor that added impetus to the establishment of
a “new” mechanism to address regional uncertainties and/or security challenges was the
unprecedented economic growth that was happening in the Asia-Pacific region in which
many ASEAN countries were major star performers.
From the late 2000s to 2018s, ASEAN’s economy grew steadily with an average
annual growth of 5.3%.2 The vibrant economic growth in the region was remarkable, total
combined GDP of ten AMS was valued at US$3.0 trillion in 2018, positioning ASEAN
as the fifth largest economy in the world. 3 It making an obvious reason ASEAN to evolve
its own DSM, to regulate and making possible rule-based system that could be enforced.
Another point to consider is will ASEAN collaborate to another regional organizations
rules and adopt it to their Dispute Settlement instrument? Based on 15 years of uncertain
DSM rules, could ASEAN enhances its DSM to assist ASEAN Member States to more
futuristic dispute settlement in regional level? This article will discuss how major blocs
in ASEAN states and the implications on crucial challenge in their DSM instruments.

II. RISING ISSUES AND POTENTIAL BLOCS IN ASEAN DISPUTE

SETTLEMENT MECHANISM
Southeast Asia was an almost ideal-type pluralist international society, in which
the primary institutions of sovereignty, nationalism and international law were interpreted
through the principles and norms of noninterference, national self-determination and
peaceful dispute settlement. ASEAN had been through several periods of inter-state
conflicts that threatened the stability and security of the region. These were the conflicts
that occurred in non-ASEAN members at that time that would include the decades-long
war in Vietnam and its eventual reunification in 1976. The Vietnam War formed a large
2
The ASEAN Secretariat Jakarta, ASEAN Key Figures 2019, hlm 32
3
Ibid, hlm 29
part of the regional leitmotif at the time of ASEAN’s establishment. This was followed
by the Vietnamese occupation of Cambodia until the resolution of this conflict in 1991
and the rebuilding of the “new” Cambodia following the elections in 1993. Looking back
over thirty-five years since its inception, ASEAN’s political achievements have been
remarkable by any standard. Although security did not formally enter its agenda until
ASEAN’s Fourth Summit in 1992, the success of ASEAN is primarily in the political-
security realm. This has been the paradox of ASEAN. If one were to examine the
ASEAN Bangkok Declaration, which explained what ASEAN was all about, one would
get the impression that it was created as an economic grouping. After all, the Bangkok
Declaration stated that the objectives of ASEAN are to promote regional economic
growth, social progress and cultural development through active collaboration and mutual
assistance on matters of common interests in the economic, social, cultural, technical,
scientific, and administrative fields.4 During these periods, ASEAN was an active player
in the management of these conflicts, and its role in defining the norms and mechanisms
to manage regional order became more discernable. What is interesting about ASEAN’s
contribution to order is that, rather than being a by-product of either the regional balance
of power or the region’s unique normative structure, it instead appears to constitute part
of a division of labour negotiated with the great powers.
The institutionalization of ASEAN has subsequently generated a number of
important mechanisms which can be classified into two types: (1) formal mechanisms
and (2) informal or normative mechanisms. Formal mechanisms can be sub-divided into:
(1) the institutionalized framework of discussions and consultations on matters of mutual
interest, (2) the institutionalized bilateral mechanisms and processes, and (3) the legal
instruments that are meant to prevent and manage disputes. Currently, the organization
has a wide range of regulatory sources of the settlement of disputes, which makes it
necessary to develop a single settlement codified tool within ASEAN for the settlement
of all disputes arising in the framework of this very Association.
The ASEAN Charter marked a key event in legal integration, not just because it
conferred a legal personality on the organization but also because it introduced provisions
for legal dispute settlement that went significantly beyond existing standards.
Traditionally, ASEAN had emphasized non legal forms of dispute settlement, such as
confidence-building, consultation and mediation. The most common practice of dispute
management in ASEAN is through the ASEAN Way of diplomacy, it is commonly used
to address territorial sovereignty disputes, which may affect the region’s peace and
security. Hence, the depiction of ASEAN is all about its norms and principles in inter-
state conduct; its informal mechanisms and lack of formal institutions in dealing with
issues and problems; its preference for musyawarah (dialogue) and mufakat (consensus)
in decision-making; and last but not least, its preference for avoiding conflicts rather than
resolving them. It would be a fair assertion that while the ASEAN Way, especially the
elements that refer to informalism and ad hocism, might have been true of intra-mural
interactions during ASEAN’s formative years, it has been somewhat diluted in later
years, especially in the 1990s. It has been especially discredited following the outbreak of
the regional economic crisis in 1997.

4
REGIONAL SECURITY IN SOUTHEAST ASIA: BEYOND THE ASEAN WAY, hlm 20
 ASEAN has therefore been portrayed as this organization that has stood still as
time passed by an unchanging entity, impervious to change. The ASEAN Way has been
criticized as rhetoric and hyperbole that ASEAN officials indulge in defensively to
deflect attention from the grouping’s shortcomings in ensuring more substantive
cooperation. ASEAN only emphasizes the main principle to respect and honor the
sovereignty and the independency of each of the member states. It also avoids to be
involved in any domestic affairs of its members. Certain factors like the intervention of
major powers in regional conflicts and lack of competence in dealing with conflicts had
been major obstacles in preventing some regional organizations to effectively carry out
their functions in managing conflicts. This ensured that the process would not be
dominated by any single power, showing that ASEAN was not favouring any single great
power but instead acting as a neutral facilitator of inclusive security dialogue. ASEAN
was therefore claiming that it was a non-threatening actor, because it had no hidden
agenda to advance any one power’s interests. It makes ASEAN, as the regional
organization of Southeast Asia, does not have any ‘strong’ organ as its counterparts in
Europe do, which can adopt laws that are legally binding on the member states. With
these caveats, however, the concept needs to be examined critically and in its historical
context, as it provides an important part of the debates about Southeast Asian
regionalism.
In principle, dispute settlement mechanisms had been a part of ASEANʼs
secondary institutional framework since 1976. However, they were only of marginal
significance for the first two decades. In the 1990s, a discourse on strengthening legal
integration through enhanced dispute settlement emerged in the region. To understand the
way in which it unfolded, it is not sufficient to look at individual country positions.
Regionally specific primary and secondary institutions that expressed convictions about
the role of law in international society shaped the normative dimension of the debates. 5
Of the many attributes and elements of the ASEAN Way, two are of particular
importance. The first is the preference for informality and a related aversion to
institutionalisation of cooperation. The first ever summit of ASEAN leaders did not take
place until eight years after the grouping’s formation and there were only four summits in
the first 25 years of ASEAN’s existence. Until the 1990s, the ASEAN Secretariat was
kept very small, and its head was called the Secretary-General of the ASEAN Secretariat,
rather than the Secretary-General of ASEAN.
The first normative legal act, which included in its content provisions on the
procedure for the settlement of disputes arising between the ASEAN Member States, was
the 1976 Treaty of Amity and Cooperation in Southeast Asia (The TAC). The provisions
of this Agreement apply to all issues related to the application of this Agreement in the
political, social, cultural, economic and other areas of interaction of the parties to the
agreement. The cornerstone of this Agreement is a strong emphasis on the principle of
Specificity and Problems of the Settlement of Economic Disputes of the non-use of force
and the threat of force against the parties to this Agreement and the settlement of disputes
through friendly negotiations.

5
Constructing a Security Community in Southeast Asia, hlm 78
 The TAC is one of ASEAN attempt to provide the arrangement and the legal
instrument for member states to order their relations according to explicitly prescribed,
universally accepted principles and provide for peaceful settlement of disputes. Despite
nearly forty years of existence, the TAC has never been utilised. In the event of disputes
among state parties, they show a high preference to utilise other third-party international
dispute settlement mechanisms rather than the TAC. There are three glaring weaknesses
in the scheme set up in Chapter IV of the TAC. Firstly and most significantly, articles 14
and 15 do not apply unless the parties to the dispute agree. This means that one of the
disputants can block the use of the dispute settlement mechanism. The non-mandatory
nature of the procedure means that it will be used only if there is a significant change in
the political mindset of the High Contracting Parties in favour of objective dispute
settlement. As things stand, the solution to any dispute threatening to disturb peace and
harmony in the region will be political.
The second weakness as far as ASEAN member states are concerned is that the
TAC procedure allows countries other than ASEAN member states to get involved in the
dispute settlement process. At the 3rd ASEAN Summit held in Manila in 1987 the TAC
was amended to allow for the accession of states outside Southeast Asia. At the time of
writing 19 countries and the European Union and Commission have done so.62 Under
rule 14 of the Rules of Procedure non-ASEAN member states may be represented as
observers at meetings of the High Council. This means that these non-ASEAN states will
be able to watch and (with the permission of the High Council) speak at meetings. There
is a view among some ASEAN members, ventilated during the negotiations on the
ASEAN Charter, that “outsiders” should not be part of any dispute settlement
mechanism. This is probably the underlying motive for the amendment of the TAC in
2010 to provide that a non-ASEAN High Contracting Party will not form part of the High
Council unless that party is directly involved in a dispute to which the TAC applies.63
Although this view does not command the unanimous agreement of all the ASEAN
member states, it nonetheless remains strongly held in some quarters. In the light of the
history of Southeast Asia, the wariness about interference by outside powers is entirely
understandable.
The third weakness is that there is no explicit provision for arbitration or
adjudication by a court or tribunal. Good offices, mediation, inquiry and conciliation
essentially are non-legal modes of dispute settlement. They supplement direct political
negotiations. This reluctance to submit to binding dispute settlement has characterised the
“ASEAN way” from the very start. Any dispute settlement under the TAC will have to be
consensual rather than confrontational. More importantly, there will not be a public loss
of face. This approach accords with the primary role of ASEAN as a mechanism to foster
trust among the member states.
The TAC mechanism is not likely to be used to settle disputes between ASEAN
member states. The process is too public, involving the convening of a High Council at
which non-ASEAN High Contracting Parties may be represented as observers. Rather,
the TAC is likely be used as an inspirational document, committing the High Contracting
Parties to peaceful settlement of their disputes. The state parties’ reluctance to utilize the
TAC dispute settlement is most likely due to the political nature of the High Council and
the lack of confidence in the TAC procedures. The fact that disputing parties are also part
 of the High Council and that any decision must be taken by consensus makes it less likely
that any satisfactory outcome can emerge as such procedures would only further
politicise such sensitive disputes instead of resolving them. If a legally-binding result is
desired, the TAC does allow other international dispute settlement mechanisms to be
invoked. This might even mean recourse to the ICJ, as in the Sipadan/Ligitan case. It is
also possible that the TAC route will lead indirectly to the arbitration procedure now
provided in the 2010 Protocol to the ASEAN Charter on Dispute Settlement Mechanisms.
In 2004, the ASEAN Member States signed a new dispute settlement mechanism
protocol, known as the ASEAN Protocol on Enhanced Dispute Settlement Mechanism
(Vientiane Protocol). With the adoption of the Vientiane Protocol, ASEAN has taken an
essential step in creating a legalistic system of adjudication distinct from the previous
system which had focused on conciliation and adjustment. Under that previous system,
the conciliation or adjustment processes were methods intended to bring disputants to a
solution which each party would elect to accept. If there was disagreement, the parties
simply set aside the issue; and they agree to disagree in that issue. The provisions of the
Vientiane Protocol are considered to be similar or the same with the WTO Dispute
Settlement understanding, including the non-adjudication stages such as consultations,
good services, conciliation and mediation, as well as adjudication stages such as the
formation of a panel and appellate body. However, in its implementation the study of the
WTO DSU is adapted to the needs of ASEAN as a regional organization, which is of
course different from the WTO, which is a multilateral organization. 6 The new
adjudicative process is, instead, an institutional process that determines the rights and
obligations of the parties to a dispute. This approach contemplates the dispute settlement
process as a relatively disciplined juridical process by which impartial panels can make
objective rulings about whether or not certain Member States’ activities are inconsistent
with any of the covered agreements. Central to the mechanism under the Vientiane
Protocol is the automatic process involving a panel established by SEOM to consider
disputes that cannot be resolved through consultation.
Unlike other ASEAN DSM, SEOM has the power to establish a panel based only
on the request of a party to the dispute within forty-five days upon the receipt of the
request. Appendix II of the provides that after the establishment of the panel, the parties
are given ten days to decide on the individuals who will sit on the panel.28 The panel is
composed of three or five panellists, subject to the agreement of the parties. If the parties
fail to reach an agreement on appointment of panellists, within twenty days after the
establishment of the panel a party may request the Secretary-General of ASEAN to
determine the composition of the panel. The Secretary General is then given ten days to
determine the composition of the panel by appointing panellists whom the Secretary-
General considers most appropriate after consulting with SEOM and the parties in the
dispute. Access to ASEAN’s dispute settlement procedure is limited to the Member
States and individuals are not permitted standing in the dispute resolution process. The
Vientiane Protocol applies specific rules, which differ from the WTO DSU, with regard
to a request for a longer time period for compliance.

6
Prita Amalia, ASEAN PROTOCOL ON ENHANCED DISPUTE SETTLEMENT MECHANISM AS
LEGAL
PROTECTION BASED ON ACIA (COMPARATIVE STUDY WITH WTO), hlm 14
 The Vientiane Protocol stipulates that when a party to a dispute requests a longer
period of time for compliance, the other party will take into account the circumstances of
the case and consider the complexity of actions required to comply with the findings and
recommendations of panel and Appellate Body adopted by SEOM. The request shall not
be unreasonably denied.42 Furthermore, when compliance requires the passing of a
national legislation, a longer period appropriate for that purpose shall be accorded.
Similar to other ASEAN dispute settlement mechanisms, the Vientiane Protocol has
never been invoked by any ASEAN member state. This is not because ASEAN states are
particularly averse to bringing their dispute before third-party adjudication or because
there is no economic disputes among ASEAN states.
After the Charter was ratified, governments then negotiated the Protocol to the
ASEAN Charter on Dispute Settlement Mechanism, adopted in Hanoi in 2010 (hereafter,
the 2010 Protocol). This lays out extensive procedures for settling disputes, such as
specifying the process through which a complainant can request consultations; time limits
in which the counterparty must reply; and the composition of the arbitration panel if the
ASEAN Coordinating Committee decides by consensus to establish one.3 Unlike the
TAC that provides for the participation of ASEAN’s dialogue partners and other regional
organisations, only inter-state disputes fall within the scope of the 2010 Protocol, and it
also appears to exclude state entities. ASEAN dispute settlement mechanism has a
progressive development by creating a quasi-judicial mode as arbitration on the 2010
Protocol to the ASEAN Charter on Dispute Settlement Mechanism (2010 Protocol), but
the arbitrary process is not a court. The Protocol applies any disputes which concern the
interpretation or application of the ASEAN Charter and the matters which are out the
ambit of the 1976 Treaty of Amity and Cooperation in Southeast Asia and the 2010
ASEAN Protocol on Enhanced disputes Settlement Mechanism. The disputes shall be
settled through consultation, arbitration, and the ASEAN Coordinating Council (ACC)
respectively. Some scholar opines that the arbitration would be a scarce occurrence
because it must have a mutual consent of either parties, or otherwise initiating by the
ACC. It might be allowed if there would have a consensus decision of the ACC. As
aforesaid section the ASEAN Coordinating Council will decide that which settlement
mechanism should apply to the dispute that comprises good offices, mediation,
conciliation and arbitration. This is pursuant to Article 9 of the 2010 Protocol. It is
noteworthy that the ASEAN Coordinating Council consists of foreign minister of all
member states which will assemble twice a year including having consensus solution of
the council’s meeting is difficulty. Thus, if the dispute arose before the council it would
tend to be settled by political grounds Unsolved dispute and non-compliance finally shall
be referred to the ASEAN Summit which comprises leader of member states. It is
notified through the ACC. The committee in the summit which exactly consists of the
leader of disputing states, including the report and recommendation which are concluded
by the ACC to the ASEAN Summit; as a result, it will be political and not legal in nature
inevitably. Consequently, the settlement of dispute will fall off a basis of law.
As a general rule under the ASEAN Charter, all disputes pertaining to the
interpretation or application of a specific ASEAN instrument shall be settled through the
dispute settlement mechanism specifically provided under such instrument. The Charter
prescribes the use of the High Council of the TAC, the Vientiane Protocol and the
Protocol to 2010 Protocol to address disputes falling outside the general rule. The
Vientiane Protocol is the only ASEAN dispute settlement mechanism that addresses
intra-ASEAN disputes pertaining to economic cooperation, including trade. To date, none
of these mechanisms has been invoked. As regards conflict prevention, ideas on
instituting an ASEAN Dispute Settlement Mechanism on political and security areas are
also being deliberated on. In contrast to the AEC where officials are already working on
the possibility of establishing a high-level judicial body that will be staffed by judges
from every ASEAN member country to enforce the Protocol on DSM, this has been a
contentious issue when dealing with political disputes. Despite the basic tenets of the
ASEAN Way, a gradual evolution into a more rules-based integration profoundly
influenced by developments in the WTO and further stimulated by the continuing impacts
of the 2007 ASEAN Charter has emerged during the last 15 years. This change in the
mood of ASEAN has also influenced developments in the three DSMs relevant to the
present discussion. This period has been notable for the introduction of arbitration as an
option for dispute resolution between AMSs and its confirmation as a DSM in cases
between an AMS and private investors. In addition, AMSs have shown no reticence in
initiating cases before the WTO (panels and AB) even against other AMSs. However,
deficiencies remain. ASEAN DSMs (like the WTO process) are largely to be conducted
on an interstate level and, apart from investor disputes, exclude direct action by private
parties: companies still have to encourage their state to litigate. By turning the dispute
into an inter-state one, political and diplomatic moves enter into the frame, in a way
depriving the original dispute (private party v. AMS) of its economic rationale or at least
marginalizing it in the DSM. In this sense, too, the procedures under TAC and the
Vientiane and Hanoi Protocols have little relevance in trade matters that usually require
speed, consistency and clarity in resolution rather than a cumbersome, slow, step-by-step
process to resolve an outstanding dispute between AMSs.
The very formation of ASEAN institutionalized a framework for member states to
manage their disputes. The primary institutional framework thus lacked the strong
tensions of the European case and consequently was subject to stronger feedback effects.
Together with the absence of a powerful supranational actor in the legal realm, this put
pro-integration actors in a weaker position and worked against change in the primary
institutions. Advocates of legal integration had to rely mostly on functional rather than
normative arguments. However, claims about the ramifications of globalization could not
resonate as strongly as if there had been a firmly institutionalized primary institution of
market liberalism. The notion of regional resilience supported calls for stronger
cooperation but it did not legitimize the centralization of authority. By consequence,
progressive discursive positions had a hard stance in arguments about the potential legal
features of the ASEAN Charter.
ASEAN states are still in the process of developing their own domestic legal
procedures, and although ASEAN states recognise the principle of democracy enshrined
in the ASEAN Charter, they practice political systems that vary from liberal democracy
to absolute monarchy. In many of the ASEAN states the option for a legal solution to
disputes is further hampered by a limited rule of law and high corruption perception.88
The Vientiane Protocol therefore represents a real viable alternative to domestic courts in
lieu of anything else. Some domestic jurisdictions in ASEAN have become more
receptive toward submissions that suggest that international treaties are directly
applicable in those jurisdictions. The acceptance of claims on violations of international
human rights by courts in Indonesia, Malaysia and Philippines are notable examples of
this. We predict that the trend in these jurisdictions will lead to arguments and maybe
even greater acceptance of arguments that ASEAN agreements are directly applicable in
these jurisdictions. If so, it is likely that aggrieved individuals would choose the most
efficient mechanism to resolve their disputes with ASEAN governments, which in this
case could include recourse to the domestic courts of some ASEAN jurisdictions.
Thus, we believe that a functional approach to legitimacy at this stage of ASEAN
will be a better benchmark to evaluate the Vientiane Protocol and, hopefully, strengthen
its claim of ‘institutional integrity’. Through this approach we will attempt to evaluate the
legitimacy of the Vientiane Protocol through its function in contributing toward the
achievement of ASEAN’s goals vis-à-vis the AEC. Another issue is that the panels and
AB in the ASEAN DSMs remain ad hoc. Yet, in view of the fact that the economies of
AMSs have reached such a developmental level, a permanent quasi-judicial entity may be
required to deal with trade disputes more efficiently and expeditiously. Without an actual
operational WTO DSM predicted from the end of 2019, then AMSs may be forced to turn
towards their own DSMs to resolve trade disputes. With that said, we believe that the
creation of these state-to-state dispute settlement mechanisms in ASEAN is not in vain.
These mechanisms provide a tool kit or options for individuals and states to enforce
bargains made by ASEAN states.
The fact that they may not be directly used belies their value in putting pressure
on ASEAN states during dispute management negotiations to resolve a dispute. The more
effective a mechanism is, the more likely that a party aware of being in breach of an
obligation will be receptive to a reasonable solution or compromise. Under the shadow of
litigation and third-party adjudication, parties are often more conciliatory. What is
important is for all parties to be aware and knowledgeable of their obligations, the
options for the enforcement of those obligations and the need to promote the rule of law
within ASEAN. ASEAN’s skills in creating another mechanism in managing regional
security must therefore be recognized, and appreciated better, especially if its role is
examined within the context of building trust and generating confidence between the
major powers and other states in the Asia-Pacific region.
One of the most important recommendations by the High Level Task Force
(HLTF) was the creation of a more effective dispute settlement mechanism (DSM) with
powers to make legally binding decisions in resolving disputes among member states.
Since it is expected that the number of trade disputes will likely rise as the region moves
towards a higher level of economic integration, a credible DSM would be extremely
critical for the AEC to succeed. In this regard, the ASEAN Secretariat will be
strengthened to improve its capacity to undertake some of the necessary functions in this
area. Besides, ASEAN has encouraged the implementation of the rule of law, the good
governance, the principles of democracy and constitutional governance. This gives the
ASEAN Secretary General limitations in giving recommendation, guidance or choices in
the ASEAN fora. Effective enforcement mechanisms are the most important part of any
consumer protection policy. To enable consumers to obtain redress, a coherent,
adequately resourced and easily accessible infrastructure must exist. Enforcement
mechanisms must be credible and easily accessible, especially to vulnerable and rural
consumers. Effective enforcement infrastructure may include access to advice,
 counselling and legal support in general. In this regard, there have been suggestions to
make the High Council become more like a judicial body rather than a political entity.
This would be in line with the AEC’s move to take out dispute settlement mechanism on
economic issues out of the political realm and be brought into the legal realm. Aside from
the proposal on DSM, the possibility of establishing an Eminent Persons Group and an
expert advisory committee to provide advice and extend assistance to conflict parties are
also being discussed. To be sure, these proposals will take some time to materialize.
Nonetheless, one could interpret these proposals, specifically on effective dispute
settlement mechanism for conflict resolution, as indicative of the willingness by member
states to now consider a regional institution that can resolve rather than manage conflicts.
In some cases and for some parties to a dispute adjudicative methods may not be a
preferred approach. Indeed, there may well be times when the involvement of an
independent person unrelated to the parties to the disputes can help the parties to find a
mutually agreed solution. This is particularly the case in Asia where states have a
historical preference for diplomatic as opposed to adjudicatory processes. These countries
believe that these methods provide flexibility and the more responsive to the needs of
political reality and state sovereignty.
The adoption of a legalistic DSM has proven to be a necessary part of regional
integration activities in other regions. This is also the case in the ASEAN region where, if
economic integration is to fully succeed, adoption and implementation of a legalistic
DSM is crucial. This will not only benefit ASEAN member governments to understand
their rights and obligations under trade and investment agreements, and to pursue the
implementation of those rights and obligations, but will also encourage foreign investors
and individual entities that are doing business and investing their capital in the region. In
this respect, a formal dispute resolution procedure. Dispute settlement mechanisms may
give greater credibility to commitments, and the possibility of punitive measures can act
as a deterrent against non-compliance. Both theory and practice in ASEAN show that
dispute settlement mechanisms may not compel adherence as effectively as do
compliance monitoring mechanisms. Another point to note is that ASEAN dispute
settlement mechanisms currently appear not to fulfil their primary function of resolving
conflicts.
The more effective a mechanism is, the more likely that a party aware of being in
breach of an obligation will be receptive to a reasonable solution or compromise. Under
the shadow of litigation and third-party adjudication, parties are often more conciliatory.
What is important is for all parties to be aware and knowledgeable of their obligations,
the options for the enforcement of those obligations and the need to promote the rule of
law within ASEAN. ASEAN’s skills in creating another mechanism in managing
regional security must therefore be recognized, and appreciated better, especially if its
role is examined within the context of building trust and generating confidence between
the major powers and other states in the Asia-Pacific region.

III. CONCLUSION

As ASEAN finds it way through periods of crises and continues to confront the
many challenges ahead, ASEAN and its mechanism which we have defined as the
 processes, methods, and strategies employed to resolve or manage conflicts have already
been transformed beyond the narrow confines of the modalities associated with the
ASEAN way. ASEAN’s effectiveness in dealing with transnational challenges depends
on the nature of the challenge and the responsibility and accountability of a particular
member state within which the crisis originates.
Considering this rigid primary institutional context, it is almost surprising how
far the new legal framework went, even if the degree of regionalization was limited.
Nonetheless, through the AEC and the ASEAN Charter, ASEAN did move its
institutional reform agenda forward. Much would depend on the eventual implementation
of the AEC’s numerous proposed measures and the members’ compliance with the
ASEAN Charter provisions and more generally the development of a culture of
compliance with ASEAN’s agenda and instruments which the Charter seeks to inculcate.
This will decide ASEAN’s capacity to deal with the new challenges in the twenty-first
century. In particular, stronger enforcement mechanisms are still needed to ensure
implementation of decisions and rulings rendered by the various bodies. In this respect,
and in order to maintain support for trade liberalization moves, it is crucial that States
have confidence and trust in the operation of the dispute settlement mechanisms.

IV. REFRENCES