This article focuses on the normative concept of responsibility and its implications for the elaboration and enforcement of international labor standards. This concept is but one of various moral justifications that may be introduced to support the enforcement of labor standards in the ultra-national level (others include fulfilling basic human rights, realizing human capabilities , moral ramifications of international trade arrangements, utilitarian justifications, etc). Our focus on the concept of responsibility rests on several theoretical premises: First, the concept of responsibility is internal to the discourse of transnational labor law and particularly evident in the notion of Corporate Social Responsibility (CSR). It is therefore inherently linked to the activities of Transnational Corporations (TNC's) as related to labor law, and thus particularly appropriate for normative investigation. Second, the introduction of the concept of responsibility as a primary analytical tool allows for a more nuanced understanding of the scope and methods of enforcement of international labor law. By directing particular attention to the issue of enforcement - rather than to the definition of the level of standards – it addresses the main problem in the transnational labor law arena today. Further, the concept allows for the incorporation of new agents/subjects to whom responsibility can be assigned (new levels of responsibility) such as individual consumers and private companies/firms (not only TNC's, but also particular players on the national level, including the various actors in the supply chain, vendors, down to the plant level, including individuals). Third, recently, the global justice literature emphasized and developed the notion of collective responsibility, in order to address and reflect the growing reality of globalization - the deepening and speeding up of worldwide interconnectedness in all aspects of social life. As the realm of international labor law is particularly affected by economic globalization and the decline of the status of the traditional nation-state as the primary economic and political unit of world society, the notion of collective responsibility is of particular relevance.
The article aims at analyzing the practical implications generated by the different conceptions of collective responsibility regarding the institutional arrangements that promote international labor standards. It discusses two possible understandings of collective responsibility: a conception of national responsibility (Miller, 2008), and a social model conception based on a cosmopolitan normative assumptions (Young, 2004, 2006). The article explores the differences and interrelations between these two conceptions and their institutional implications. Thus, it highlights the diverse conceptions of responsibility underpinning various models of institutional arrangements that promote international labor standards. These include both private and public arrangement, both existing and ideal-type arrangements. For example, it discusses particular models of “Codes” that we believe best represent workers’ interests (the Workers Rights Consortium) and an ideal type model -Ratcheting Labor Standards (RLS)). The article also discusses public arrangements such as the ILO, and various proposals and models that link international labor rights with trade.
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Socially Responsible Private Regulation: World Culture or Capitalist Strategy? Ronen Shamir
[Open]
This article analyzes the phenomenon of 'corporate social responsibility' in light of two sociological paradigms: the neo-institutional paradigm of 'world-culture' and the imperialist paradigm of 'world-capitalism.' The study treats three empirical features of CSR: the political contestation over its meaning, the role of business studies in transforming it into a managerial model, and its consolidation as a market of authorities. The study finds that (1) while CSR may be theorized as a emergent 'world cultural' model, the neo-institutional paradigm does not take sufficient account of the role of corporations in shaping it, and (2) while both paradigms recognize the transition from political contestations over the character of CSR to its deployment by means of private regulation, the neo-institutional paradigm fails to theorize the mechanisms of change that mediate between political agency and institutional outcomes.
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Signaling Virtue: A Comparison of Multinationals Codes of Conduct in the Fields of Labor and EnvironmentIssi Guy Mundlak & Issi Rosen Zvi [Open]
The study aims at finding answers to two inter-related questions: (a) How can corporations make credible commitments to consumers and intermediary agents that indicate their true commitment to social responsibility? (b) How are the methods of signaling different in the areas of labor rights and environmental protection?
The efficacy of corporate codes as a mode of governance that improves the responsibility of corporations towards social matters, inter-alia labor rights, environmental protection, corporate governance, prevention of corruption and human rights, rests on agents that are aware, informed and have some form of power to affect the corporation. The creation of a "market for virtue" and social responsibility is, therefore, dependent on the flow of information from the corporation to the responsible agents. A free flow of information must avoid excessive, missing and unreliable information. More generally, a market for virtue should make it possible to create the appropriate means to signal true commitments and enable informed agents to know how to use effectively their limited resources for deploying market power that rewards and sanctions the corporations that deserve such responses.
This article approaches corporate codes at a developed stage of research and practice in CSR and self-regulation and seeks to observe the codes from the agents' perspectives. Otherwise stated, the authors wish to position themselves as curious agents who seek to understand whether corporations can be sorted according to their actual responsibility for advancing virtue in a market environment. As researchers we seek to find an answer to the question "to what extent has the nuanced understanding of what corporate codes do induced corporations to develop techniques that demonstrate the credibility of their claims to be socially responsible". As consumers and policymakers, we seek to identify whether a true market for social responsibility is emerging, whereby contractual choices can be made on the basis of informed decisions, or whether the field remains in the domain of a marketing ploy.
The underlying assumption of this query is that if corporations are in fact competing among themselves on the dimension of social responsibility, then some corporations will identify ways of demonstrating credibility of both efforts and results. To assess the problems in such a demonstration, as well as the methods that have developed we analyze the codes and associated documents of 20 multinationals in three industries – textile, petro-chemicals and automobile. We seek to identify the means by which a corporation can persuade consumers and skeptical researchers that their social commitments are credible.
When reading the codes and seeking signals of credibility, or lack thereof, we also seek to deepen the analysis and distinguish between the corporations' demonstration of commitment in two fields: labor and environment. Focusing on these two fields, while leaving others aside (e.g., corporate governance, prevention of corruption) allows a more careful reading and a more focused comparison along similar thematic areas. At the same time, the choice of two fields also accommodates a comparison between them. Hence, it is assumed that a true effort to signal commitment may require different measures and methods. These pertain to the choice of norms, the empirical benchmarks and common reporting schemes.
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Private Environmental Governance as Ensemble Regulation: A Critical Exploration of Sustainable Business Indexes and the New Ensemble Politics Oren Perez [Open]
Over the last years, the environmental regulatory system has undergone radical changes. Various private normative schemes, including corporate codes, environmental management systems, “green label” schemes, environmental reporting standards, project-finance codes and green indexes, have taken an increasingly important role in the environmental regulatory field. These new forms of private governance have become increasingly global in terms of their normative reach and institutional form. The paper starts by outlining the contours of this new global terrain of private ordering, exploring in general the questions of its efficacy and legitimacy. It highlights, in particular, the multiple links and cross-sensitivities between the distinct schemes, which have created a novel ensemble regulatory structure with positive normative and enforcement externalities. While the ensemble structure of this new transnational regulatory web increases the impact of each of these legal instruments it raises new questions regarding their legitimacy and accountability, and the way in which they respond to the concerns of civic society. Responding to civic critique many of these new regimes have developed semi-constitutional structures, establishing various mechanisms of public consultation, dialogue and transparency. Overall, this process of normative agglomeration has created a new space for transnational political action.
After setting the general picture the paper will turn its focus to sustainable indexes, which are part of this emerging global regulatory ensemble, and provide a proto-typical case. It will first chart their development over the last ten years focusing on the critical role of two global leaders: the FTSE and Dow-Jones groups. It will explore in this context the various links between sustainable indexes and other private governance instruments such as ISO 14001 and the GRI. Finally the paper will discuss the various mechanisms of accountability that were created by these two schemes. Paradoxically, the new political opportunities which were created by the FTSE and Dow-Jones schemes and other members in the new ensemble network also reduce the prospects of radical critique by delimiting the scope of political action.
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Implications of ISO 26000 for public policy, governance and democracy Halina Ward [Open]
[Paper]
ISO, the International Organisation for Standardisation, is now in the closing stages of an ambitious project to develop a new international guidance standard on ‘social responsibility’ of organisation. If adopted, ISO 26000 will offer globally applicable guidance for all kinds of organisations on issues from human and labour rights to fair competition and the environment. In her paper, Halina Ward assesses the proposed ISO 26000 in terms of its implications for public policy and democracy. In her conclusion, she argues that we must go beyond an understanding of global private standards in terms of their contribution to ‘governance’ or ‘public policy’, to build a coherent framing, positive and negative, of their contribution to an emergent ‘global democracy’ for sustainable development.
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Global Banks as Global Sustainability Regulators: the Equator Principles Cynthia A. Williams & John M. Conley [Open]
This is an ironic time to be writing about banks as global sustainability regulators, two years into a serious financial contraction and economic recession caused by untenable banking practices. Nonetheless, in limited areas of their operation, where global banks kept risk on their balance sheets and were financially exposed to many types of risk often otherwise treated as “externalities,” banks began to act in responsible ways that can be accurately labeled “sustainable.” A small number of these banks have started to extend these principles of responsible action more broadly, across many of their business lines, as conditions of lending to their corporate clients. To this extent, it is possible to talk about (some) global banks as global sustainability regulators.
The “law of unintended consequences” as used in the legal literature almost always refers to the unintended negative consequences of a regulation or policy. In this paper, however, we discuss a potentially positive unintended consequence of the deregulatory and privatization trend of the 1980s and 1990s that was fueled by neoliberal political commitments: some private banks have taken a leadership role in regulating development. Specifically, these banks are attempting to mitigate the potentially negative social and environmental consequences of infrastructure development in politically unstable or environmentally fragile landscapes. The vehicle for doing this is a voluntary agreement called the Equator Principles (“EPs”). The paper describes and analyzes the EPs and reports the initial results from an interview-based study of the various EP “stakeholders,” including bankers, government officials, lawyers, consultants, and critics from non-governmental organizations. We address—from the perspective of these stakeholders--such questions as why the participating banks decided to join the EPs, what effects, if any, the EPs are having on development practice, and whether the EPs will ultimately prove to be more than a public relations exercise.
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In Defense of Soft Law and Public-Private Initiatives in the Case of Malaysian Labor Law Vanitha Sundra Karean [Open]
This discussion provides an institutional analysis of the historical basis of hard labor law in Malaysia and traces the evolution of soft law initiatives which have sprung from deliberately designed public-private initiatives as well as spontaneous market-driven responses in favor of employees. A case in defense of soft law is made for Malaysia on the basis of political realism. Avenues and agents of soft law initiatives are evaluated with a focus on corporate codes. Most corporate codes commonly group issues of labor together with the environment and philanthropy and this may create an appearance of convergence in the regulation of these issues. However, I argue that for Malaysia, the stage is being set for divergent regulatory approaches to labor and the environment, with differing consequences and outcomes. Some of these outcomes, as will be illustrated, may not be consciously designed but are likely to occur spontaneously. The focus of the discussion will be on the changing nature of labor norms and the inter-dependence of the organic forces in a particular jurisdiction that drive the labor agenda. The discussion concludes with an illustrated argument in praise of soft law as a viable agent for driving change in hard labor law, whilst maintaining its soft law character, thus contributing to the varieties of hybrid labor regulation.
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Private Environmental Governance in Hard Times Marc Eisner [Open]
The past two decades have witnessed a proliferation of innovations in corporate self‐regulation, ranging from the adoption of stand‐alone environmental management systems (EMS) to participation in international standards and trade association‐based programs. The complex system that has emerged is arguably superior to traditional forms of regulation. Many of the goals pursued through private environmental governance, for example, are beyond the reach of public regulation, which is hampered by problems of information scarcity, analytical and resource constraints, limited legal jurisdiction, and policy instruments that are often inapplicable. Moreover, there is much to suggest that the emerging system, which draws on a variety of institutional types, is far more flexible and adaptable to changing circumstances and emerging problems. The role of the state remains critical, however. In some cases, the private environmental governance systems have been loosely or tightly integrated with government regulations; in other cases, they work as parallel and overlapping systems. In either case, the role of public policy and institutions is important. Public policies can delegate differing amounts of discretionary authority to firms and associations. They can reinforce or negate the incentives for self‐regulation. Soft law exists in the shadow of the state.
Since the early 1990s, environmental regulators in many nations have revealed a growing recognition of the importance of private governance. Take the example of the United States, a nation with an environmental regulatory system that has been traditionally characterized by its complexity, its heavy reliance on command‐and‐control instruments, and its adversarial legalism. During the 1990s, the United States Environmental Protection Agency created a host of public‐private partnerships to promote innovations in self‐regulation. It played a leading role in the development of the International Organization for Standardization’s EMS standard (ISO 14001). By 2000, a green track (the National Environmental Performance Track) was created to provide special benefits to firms that had a quality EMS and a record of performance “beyond regulation.” It appeared that the regulatory system was undergoing a gradual transition to one that would promote a higher level of public‐private integration and cooperation. Indeed, some analysts were convinced that these changes were emblematic of a “new” form of environmental regulation that would prove highly durable. Did the rise of private environmental governance and the growing integration of public and private forms of regulation mark a durable shift in governing philosophies, or was it contingent on a support for “third way” solutions that was itself dependent on an extended period of economic growth?
This is a question that may prove quite important in the wake of the financial collapse and the current recession. Two impacts are particularly important. First, it has stimulated far greater skepticism regarding the efficacy of self‐regulation and demands for a return to more state‐centered models of regulation. Traditionally, finance has had a strong component of self‐regulation. In the US, investment banks were given far greater authority to manage their own levels of risk. Regulators deferred to the decisions of private credit rating agencies, whose role expanded in importance as the securitization process generated financial instruments of unprecedented complexity. The financial collapse revealed, among other things, the weakness of self‐regulation. The response, thus far, has been to return to more state‐centered models regulation. There is reason to believe that this change in regulatory philosophies will carry implications for environmental regulation. The new Obama administration, for example, terminated the National Environmental Performance Track in 2009; other voluntary initiatives and partnerships are under review. Meanwhile, the administration has moved forward with a far more aggressive enforcement agenda.
Second, the current crisis may reveal the durability of the commitment to self‐regulation in the private sector. In the past, corporate participation was attributed to a host of attractive benefits, ranging from cost‐and reputation‐based advantages to the preemption of mandatory regulations. The precise relationship between profitability and corporate environmentalism was poorly specified. Some argued that environmentalism lead to higher levels of profitability and was thus consistent with the fiduciary responsibility to maximize shareholder wealth. Alternatively, others suggested that profitable firms were simply more likely to invest in environmental management. If the existence of “green‐gold” is overstated, the deep recession may also reveal that private environmental governance was far more fragile than believed by many of its proponents. If this is the case, the events of the past two decades, for all their merits, many not prove as robust as previously imagined.
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Towards an Integrative theory of Transnational Labor Regulation Kevin Kolben [Open]
Transnational labor regulation (TLR) is the field of law that concerns the regulation of work in the transnational sphere, across jurisdictions. TLR has been described as a “spider’s web”[1] and a “mosaic”[2] by at least two prominent scholars of the field. As such it consists of a wide range of regulatory instruments operating at multiple planes, using soft and hard, state and non-state mechanisms to achieve its aims.[3] But its expansiveness is also its weakness. While on one hand it recognizes the multiplicity of legal sources of norms and enforcement, TLR lacks a strong, coherent vision of how its constituent parts should optimally engage with each other, and how state, or “public” regulatory regimes ought to optimally interact.
Instead, the theoretical field has arguably been dominated by prominent “governance” theories of domestic and transnational regulation that are, I would suggest, ill-suited to the exigencies of labor regulation and industrial relations, particularly in developing countries. In particular, these theories, which have been largely forged in the context of developed country regulatory systems in non-labor fields, have very weak conceptualizations of the role of the state in labor law, and almost no conception of state building. In short, they provide a post-statist account of international law, relations, and politics, and do not ask how or if private regulatory institutions can and should be oriented towards building the capacity of developing states’ labor administrative capacities, or reprioritizing labor relations as a matter of public governance.
This article argues that while the advent of private regulatory regimes might be a desirable development as a mechanism to “fill the gaps” in weak regulatory regimes,[4] private labor regimes should not be conceptualized as ends in themselves, or as idealized regulatory solutions to public regulatory failure. Instead, this article argues for an integrative approach to transnational labor regulation that goes beyond “complementarity” or “gap filling,” towards a regulatory strategy in which policy makers strategically develop and utilize non-state, hybrid, and traditional regulatory structures in ways that serve to target and improve deficiencies in domestic regulatory capacity. While traditional complementarity approaches seek to create regulatory structures that act as gap fillers, an integrative approach seeks to create discursive mechanisms and institutions that effectively communicate with each other with the explicit goal of increasing state regulatory capacity.[5]
This approach has implications for policy making in countries with strong international labor interests, such as the EU and the US, as well as in the International Labor Organization, where greater attention is being paid to non-state systems of labor governance such as in the Better Work Program. An integrative theory of TLR provides a conceptual framework for how policy makers should think about the role of law and legal institutions, including administrative institutions, in the design of its international labor development policy. Such policies are implemented in the programming of development agencies such as USAID and various European agencies, through international trade policy and regulation, and through the United States Department of Labor. It also has implications for non-state organizations that seek to improve labor governance in developing countries.
In Part One of this draft, I explain the emergence of non-state systems of labor regulation as a response to failed regulatory regimes in developing countries that participate in international supply chains. The reasons for, and nature of, this regulatory failure are complicated and not merely questions of resource constraints. Rather, the failures are politically and socially embedded in the specific contexts of different states. This failure represents, in part, a failure of the ability and willingness of these states to forcefully protect workers rights and develop systems of industrial relations that seek to realize important goals of labor regulation, such as industrial democracy and redistribution. However, the private regulatory response has taken place largely autonomously from public systems of governance, creating in effect an autonomous system of governance that, while relying on domestic labor law requirements, operates largely independently from public domestic systems of governance.[6]
The rise of these largely autonomous, non-state systems of labor governance, as I describe in Part Two, has taken place contemporaneously with the rise of “governance” in political and legal thought. I argue, however, that prominent governance theories are potentially ill-suited to the context of labor regulation in developing countries. To illustrate this point, I examine three prominent governance theories of regulatory and legal theory that have been applied in various forms to the problem of TLR. These are 1) systems theory, 2) Responsive Regulation, and 3) New Governance theory. In Part Three I sketch an alternative conceptual approach to TLR, looking first at the somewhat limited existing scholarship on the relationship between private and public regulatory regimes; and then proposing a new conceptual framework for TPLR that conceptualizes a discursive and communicative relationship between private and public regulatory regimes whereby they are directed towards developing public regulatory capacity.
[1]Bob Hepple, Labour Laws and Global Trade 3 (2005)
[2]David Trubek, Jim Mosher & Jeffrey Rothstein, Transnationalism in the Regulation of Labor Relations: International Regimes and Transnational Advocacy Networks, 25 L. & Soc. Inquiry 1187 (2000)
[4]Roseann Casey, Meaningful Change: Raising the Bar in Supply Chain Workplace standards, at 33 (arguing for a gap-filling function of private regulation)
[5]This differs from the concept of integration or transformation proffered by Trubek & Trubek, whereby transformation, hybridity, and integration or synonomous terms, indicating a condition whereby “new governance and traditional law are not only complementary; they are also integrated into a single system in which the functioning of each element is necessary for the successful operation of the other.” David Trubek & Louise Trubek, New Governance and Legal Regulation: Complementarity, Rivalry, and Transformation, 13 Colum. J. Eur. L, 539, 543 (2006); see also Charles F. Sabel and William Simon, Epilogue: Accountability without Sovereignty, in Law and New Governance in the EU and the US 395(2004)
[6] This point will be developed further in later drafts.
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Legal Pluralism and the Implementation of Private Standards: Evidence from Forestry and Labor Tim Bartley [Open]
As scholars begin to study the implementation of private regulatory standards—in codes of conduct, certification and monitoring initiatives—they are increasingly demonstrating that these standards intersect with other forms of rule-making in important ways. Understanding these intersections requires going beyond simple accounts of public versus private regulation, or hard versus soft law, to instead discover the ways in which multiple systems of rules and arenas of governance are activated or obscured as actors (including auditors, firms, and NGOs) put private standards into practice. Drawing on theories of legal pluralism, this paper theorizes the interplay of multiple levels of governance (transnational, domestic, sub-national) and multiple types of rules/standards (public, private, and customary). Then, based on fieldwork in Indonesia, the paper shows how the interplay of multiple sets of rules shapes governance “on the ground” in two key fields—(1) attempts to promote sustainable forestry and (2) standards for decent labor conditions in the apparel and footwear industry.
