The analysis and recommendations below emerged from a working group, informally convened by Chatham House, consisting of 20 international and Venezuelan jurists, former and current diplomats, scholars of democratic transitions and democratization, and representatives of the Venezuelan opposition.
The recommendations, presented in rough order of priority, outline a series of incremental but integrated steps intended to promote rule-of-law reform. For each step, a range of relevant stakeholders – variously including, depending on the context, the US, the international community, the interim government, the opposition, Venezuelan and international investors and business, and civil society – will need to:
- Initiate a formal Venezuelan/international negotiation and monitoring process for rule-of-law reform: The negotiation – among Venezuelans, with the support of the US and the international community – should focus on identifying, detailing and establishing priorities for institutional and legal reforms and a structured, incremental approach to rebuild the state’s independent judicial capacity. This should be accompanied by the setting of benchmarks and a timeline for the introduction of each reform. The process should also involve establishing a public pact that commits parties to those reforms. Advances that have already been made by Venezuelan civil society and international organizations, which in 2023 set out a framework for reforms and benchmarks, can be used as the foundation for the negotiations and resulting commitments.
- Agree to a consensus framework that links specific rule-of-law reform targets to investment, economic growth and prosperity: The above-mentioned process and resulting proposals should make a point of publicly articulating how judicial, commercial, legal and human rights reforms relate to (and support) economic and political development. This is to demonstrate causality – between specific reforms and international and Venezuelan goals of economic recovery and political and social stability – in order to provide political cover for what is certain to be a complicated and fraught process. Making that link and commitment explicit would help, too, to address Venezuelans’ growing scepticism about reform prospects, and lengthen the time horizon the public deems acceptable in terms of waiting for an eventual political and economic transition.
- Ensure international leverage via sanctions liberalization, maintenance or snapback: At present, some of the US’s ‘maximum pressure’ sanctions, dating back to 2019, remain in place on key sectors of the Venezuelan economy. The US, EU institutions, EU member states and Canada also retain individual targeted sanctions on many public officials in the interim government and its security apparatus. Broad sanctions relief and the lifting of personal financial and travel sanctions should be tied to commitments and follow-through on key elements of rule-of-law reform.
- Explore the creation of an interim board of Venezuelan and international jurists to assist in reviewing the administration of justice, and in evaluating and nominating judicial and security sector officials. Given that both the interim government and the National Assembly are dominated by the PSUV, a full constitutional process of nominating and confirming a credible cadre of new judicial, prosecutorial and security officials would be a long-term project. Judicial reform, however, cannot wait. In the interim, any political pact that establishes priorities and areas for reform should consider creating a council of prominent jurists (national and international, with broader international support) to propose standards for merit-based appointments, promotions and – where needed to address governance concerns – the withdrawal of judicial and prosecutorial credentials from non-compliant personnel. If agreed, the council could also be charged with nominating and confirming interim appointments to the judiciary and security sector. Sanctions relief or snapback should be linked, respectively, to progress or relapses in these areas.
- Include human rights considerations in the definition and implementation of commercial- and investment-focused institutional and legal reforms: Social development hinges on the ability of citizens, civil society and the private sector to exercise freedom of expression, participate freely in the economy and society, and seek public accountability without prejudice. The above-proposed public pact will need to identify – and present a timeline for the repeal of – laws that restrict freedom of expression and political activities. It must ensure due process. To this end, any agreement should permit the visit of international human rights groups such as the UN’s Independent International Fact-Finding Mission on Venezuela, the Inter-American Human Rights Commission, the International Committee of the Red Cross and civil society organizations to work with officials to identify key areas of reform, monitor developments, support the release of political prisoners, and improve the capacity of the Venezuelan authorities under the 1999 constitution to defend human rights and support victims of human rights abuses (as well as the families of those victims). Negotiations should also include the return of Venezuela to the inter-American rights system and its jurisdiction.
- Reinforce and increase the use of arbitration bodies for commercial and investment cases: As with the 1999 constitution, the normative and institutional foundation already exists for a system for the resolution of commercial and contractual disputes through arbitration, without a complete overhaul of the justice system. The relevant bodies should be strengthened and given a stronger role in the negotiation of investments and contracts, and linked to international arbitration bodies as well. Arbitration decisions and their enforcement, however, must be insulated from potential judicial interference, especially from the Venezuelan Supreme Court.
- Resolve Venezuela’s external debt crisis, and begin to reintegrate the country into international capital markets, to incentivize financial transparency and observation of the rule of law: The international community and local stakeholders should use the process of negotiating with bondholders, and securing Venezuela’s re-entry into capital markets, as leverage to promote broad rule-of-law and institutional reform. The potential legal and financial benefits of any debt renegotiation will depend on the participation of the IMF and other credible brokers. The IMF should conduct a technical assessment of Venezuela’s economic data, fiscal accounts, relevant laws and social conditions. Any payment on defaulted bonds, and an associated return to capital markets, will need to be contingent on credible plans for the re-establishment of central bank autonomy, fiscal transparency and robust anti-corruption measures, and on publication of reliable government economic data.
- Support international and Venezuelan investment beyond extractives: Fully revitalizing the economy and delivering broad-based job growth will depend on investment in recovery across a range of sectors. This may avoid the potential re-creation of the type of enclave, rentier economies that often result from dependence on the extraction and production of hydrocarbons, metals or minerals. Special care to establish rules to protect the environment and indigenous populations should be a priority. To this end, in its evaluation of legal and regulatory reforms, the above-mentioned interim board of prominent jurists should look at a range of sectors such as financial services, infrastructure and property; it should also look at reforming rules and regulations for opening new businesses. Foreign governments and embassies should seek to encourage businesses from their own countries to explore opportunities in some of these non-extractive sectors in Venezuela.
