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Published online by Cambridge University Press: 11 June 2015
This article discusses empirical research in political science on the topics of business and human rights, and transnational governance networks. It argues that transnational governance networks confront norm clashes and power conflicts, which undermine their effectiveness and legitimacy. Transnational governance as a concept and approach to ordering is therefore in need of meta-governance, by which the article understands secondary rules and procedures – that is, institutional mechanisms that allow for the mitigation and resolution of these conflicts. However, the extent to which such meta-governance currently exists, its effectiveness, and the rules and procedures that may legitimately define meta-governance and its actors are still unknown. This article calls for a research agenda to investigate these unknowns, which combines normative-legal and empirical-political science perspectives on the nature, form, legitimacy and effects of meta-governance.
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3 From a political science perspective, meta-governance concerns rules at the ‘collective choice’ and ‘constitutional choice’ level of institutional analysis and rule making, as laid out in the context of the Institutional Analysis and Development (IAD) framework. See Kiser, Larry L and Ostrom, Elinor, ‘The Three Worlds of Action: A Metatheoretical Synthesis of Institutional Approaches’ in Ostrom, Elinor (ed), Strategies of Political Inquiry (Sage 1982) 179, 212–13Google Scholar; Ostrom, Elinor, ‘Institutional Rational Choice: An Assessment of the Institutional Analysis Framework’ in Sabatier, Paul A (ed), Theories of the Policy Process (Westview Press 2007)Google Scholar 21, 27.
4 Soft law refers to rules, norms and standards that involve or address non-state actors, lack a legal-formal enforcement mechanism, and are not covered by prevailing understandings of international law: see Kirton, John J and Trebilcock, Michael J, ‘Hard Choices and Soft Law in Sustainable Global Governance’ in Kirton, John J and Trebilcock, Michael J (eds), Hard Choices, Soft Law: Voluntary Standards in Global Trade, Environment, and Social Governance (Ashgate 2004)Google Scholar 3, 4.
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10 Beyond the state, rules and norms made by state actors, which exclusively address states are, according to this understanding, international in character; if their making or implementation involves a non-state actor, we can speak of transnational rules/norms: Risse-Kappen, Thomas (ed), Bringing Transnational Relations Back In: Non-State Actors, Domestic Structures and International Institutions (Cambridge University Press 1995)CrossRefGoogle Scholar 3; Tarrow, Sidney, The New Transnational Activism (Cambridge University Press 2005) 3–4.CrossRefGoogle Scholar
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12 On the one hand, corporate social responsibility refers to firms adhering to international standards, i.e. norms originally made by, and for states – such as the ILO core labour standards; on the other, it refers to firms committing to norms and rules that are transnational in character, such as the United Nations Global Compact, which in their making or intention include non-state actors from the outset: Vogel, David, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (Brookings Institution Press 2005) 4–6Google Scholar: Dashwood, Hevina S, The Rise of Global Corporate Social Responsibility: Mining and the Spread of Global Norms (Cambridge University Press 2012) 9–10CrossRefGoogle Scholar; Thauer, Christian R, The Managerial Sources of Corporate Social Responsibility: The Spread of Global Standards (Cambridge University Press 2014) 40–41.CrossRefGoogle Scholar
13 I refer here mainly to the sub-discipline of international relations: Risse-Kappen (n 10); Tarrow (n 10); Risse (n 5); these authors revived a perspective once suggested by Keohane and Nye in the 1970s (see Keohane, Robert O and Nye, Joseph S, Transnational Relations and World Politics (Harvard University Press 1971)Google Scholar).
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16 The titles of the following works illustrate this interest: Ronit, Carsten and Schneider, Volker (eds), Private Organizations in Global Politics (Routledge 2000)Google Scholar; Kolk, Ans, Tulder, Rob Van and Welters, Carlijn, ‘Setting New Global Rules? TNCs and Codes of Conduct’ (2005) 14 Transnational Corporations 1Google Scholar; Flohr, Annegret and others, The Role of Business in Global Governance: Corporations as Norm-Entrepreneurs (Palgrave Macmillan 2010)CrossRefGoogle Scholar; Börzel, Tanja A and Thauer, Christian R (eds), Business and Governance in South Africa: Racing to the Top? (Palgrave Macmillan 2013).CrossRefGoogle Scholar
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19 Jane Deith, ‘Dhaka Factory Collapse: No Compensation Without DNA Identification’, BBC News Magazine, 16 September 2013, http://www.bbc.com/news/magazine-24080579.
20 For safety and building standards and labour laws in Bangladesh, as well as the state of implementation, see Committee on Foreign Relations, United States Senate, ‘Worker Safety and Labor Rights in Bangladesh's Garment Sector’, 22 November 2013, 5–8, http://www.foreign.senate.gov/imo/media/doc/85633.pdf. For the disregard of building standards see Jim Yardley, ‘Report on Deadly Factory Collapse in Bangladesh Finds Widespread Blame’, The New York Times, 22 March 2013, http://www.nytimes.com/2013/05/23/world/asia/report-on-bangladesh-building-collapse-finds-widespread-blame.html. On the state of the employment laws in Bangladesh see ILO, http://www.ilo.org/dyn/natlex/natlex_browse.details?p_lang=en&p_country=BGD&p_classification=01.02&p_origin=country&p_sortby=sortby_country.
21 Vogel (n 12) 6–10; Dashwood (n 12) 4–9; Thauer (n 12) 41–48.
22 Ruggie, John G, ‘The Theory and Practice of Learning Networks: Corporate Social Responsibility and the Global Compact’ (2002) 5 Journal of Corporate Citizenship 27, 28CrossRefGoogle Scholar. For Secretary-General Annan's speech see ‘Secretary-General Proposes Global Compact on Human Rights, Labour, Environment, in Address to World Economic Forum in Davos, 1 February 1999’, UN Press Release SG/SM/6881, http://www.un.org/press/en/1999/19990201.sgsm6881.html. For a general overview of the Global Compact see ‘Overview of the UN Global Compact’, UN Global Impact, 22 April 2013, http://www.unglobalcompact.org/AboutTheGC/index.html.
23 These networks are often public–private partnerships, such as the Global Compact, consisting of state agencies or international organisations as one partner in the network, and businesses and NGOs as private partners. In other cases they are based on industry self-regulation or consist of business/NGO partnerships. The aim of these networks is to bring governance into areas where the state is unable or unwilling to act as governor – thus to contain negative externalities of production and organise the production and provision of collective goods such as health care, a clean environment and respect for human rights.
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28 One may ask, however, whether it is the responsibility of governments, rather than firms (vis-à-vis their suppliers), to set and enforce regulatory standards. This may be so according to international law, although outside the European Union, North America and Japan (that is, in the Global South) the prevailing conditions of limited statehood force us to think differently. In the absence of the possibility of state regulation, Global North buyer firms can put Global South supplier firms under pressure to exploit people and natural resources in order to cut production costs. The real question is thus: in light of this unrestrained possibility of exploitation, should we look the other way and insist on the exclusive validity of conventional international law, knowing that it is based on unrealistic assumptions (with regard to the regulatory capacities of states) when applied to the Global South and is thus incapable of solving the moral-ethical problems arising from transnational business activities? Alternatively, should we think of other ways of holding firms accountable in order to be able to address these challenges? More and more legal scholarship seems to be intrigued by the idea of investigating the latter possibility of alternatives to the ‘model’ regulatory state.
29 See contributions in Kirton, John J and Trebilcock, Michael J (eds), Hard Choices, Soft Law: Voluntary Standards in Global Trade, Environment, and Social Governance (Ashgate 2004).Google Scholar
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33 Examples in Ronit and Schneider (n 16); Wolf, Klaus Dieter and others, The Role of Business in Global Governance: Corporations as Norm-Entrepreneurs (Palgrave Macmillan 2010)Google Scholar; Börzel and Thauer (n 16).
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36 Cohen, Stephen D, Multinational Corporations and Foreign Direct Investment: Avoiding Simplicity, Embracing Complexity (Oxford University Press 2007)CrossRefGoogle Scholar 5; Mosley, Layna and Uno, Saika, ‘Racing to the Bottom or Climbing to the Top? Economic Globalization and Collective Labor Rights’ (2007) 40 Comparative Political Studies 923, 923CrossRefGoogle Scholar; Tanja A Börzel, Christian R Thauer and Jana Hönke, ‘Conclusion: A Race to the Top?’ in Börzel and Thauer (n 16) 215, 216.
37 For an overview see a recent special issue: Griffin, Jennifer and Prakash, Aseem (eds), ‘Corporate Social Responsibility: Initiatives and Mechanisms’ (2014) 53(4) Business & Society.CrossRefGoogle Scholar
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41 Another question is whether they would want to do this at all. Process standards as barriers of trade could result in decreased economic growth, and conflict with the vested interests of importing firms in the Global North.
42 Some authors formulate doubts concerning the desirability of such a spread of corporate social responsibility standards from the Global North to the Global South. To them, corporate social responsibility represents business interests only or is neo-colonialism in disguise. While I believe that these concerns should be taken seriously, they are somewhat outside the scope of this article. I am not making any normative claim concerning the desirability of the new normative order of corporate social responsibility and transnational business governance that I am analysing here. Rather, I am investigating the conditions under which this new order has ‘teeth’, and the implications of the findings for legal scholars and political scientists. For a critical approach towards corporate social responsibility see Banerjee, Subhabrata Bobby, ‘Corporate Social Responsibility: The Good, the Bad and the Ugly’ (2008) 34 Critical Sociology 51.CrossRefGoogle Scholar
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44 Börzel and Risse (n 39) 113.
45 Spar, Deborah L and LaMure, Lane T, ‘The Power of Activism: Assessing the Impact of NGOs on Global Business’ (2003) 45 California Management Review 78CrossRefGoogle Scholar; Schepers, Donald H, ‘The Impact of NGO Network Conflict on the Corporate Social Responsibility Strategies of Multinational Corporations’ (2006) 45 Business and Society 282CrossRefGoogle Scholar; Smith (n 24).
46 Greenhill, Brian, Mosley, Layna and Prakash, Aseem, ‘Trade-based Diffusion of Labor Rights: A Panel Study, 1986–2002’ (2009) 103 American Political Science Review 669, 672–74CrossRefGoogle Scholar; Cao, Xun, Greenhill, Brian and Prakash, Aseem, ‘Where Is the Tipping Point? Bilateral Trade and the Diffusion of Human Rights’ (2013) 43 British Journal of Political Science 133, 138–43 (Cao).CrossRefGoogle Scholar
47 We can think of additional and alternative mechanisms to NGO and consumer pressure. Peer pressure in the context of business associations, for example, is such a mechanism. If standardisation processes provide those who adhere to a standard ‘club good’-type of advantage, they may also be considered as such an additional or alternative mechanism. In what follows, however, I will concentrate mainly on NGO and consumer pressure. The argument concerning peer pressure exerted on firms in the context of business associations still usually presumes some form of ‘shadow of hierarchy’ looming over an industry (whereas here I am interested particularly in governance networks in the absence of a regulatory threat). Club good theory in relation to standardisation processes has so far mainly been shown to produce insight for environmental and quality related standards (whereas I focus here on mechanisms which are, potentially, relevant in the area of human rights). For the peer pressure argument see Ronit and Schneider (n 16). For ‘club good’ theory approaches see Potoski, Matthew and Prakash, Aseem, ‘Green Clubs and Voluntary Governance: ISO 14001 and Firms' Regulatory Compliance’ (2005) 49 American Journal of Political Science 235CrossRefGoogle Scholar; Cao, Xun and Prakash, Aseem, ‘Growing Exports by Signaling Product Quality: Trade Competition and the Cross-National Diffusion of ISO 9000 Quality Standards’ (2011) 30 Journal of Policy Analysis and Management 111.CrossRefGoogle Scholar
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50 Kate Hodal and others, ‘Globalised Slavery: How Big Supermarkets are Selling Prawns in Supply Chain Fed by Slave Labour’, The Guardian, 10 June 2014, http://www.theguardian.com/global-development/video/2014/jun/10/slavery-supermarket-supply-trail-prawns-video.
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53 They are published in Thauer (n 12) ch 4.
54 The data was analysed according to the indicators developed for the measuring of the dependent and independent variables (see below), and numerous control variables, alternative explanatory factors and potentially important features of firms and their environment.
55 von Soest, Christian and Weinel, Martin, ‘The Treatment Controversy: Global Health Governance and South Africa's HIV/AIDS Policy’ in Hein, Wolfgang, Bartsch, Sonja and Kohlmorgen, Lars (eds), Global Health Governance and the Fight against HIV/AIDS (Palgrave Macmillan 2007)Google Scholar 202, 202.
56 UNICEF, ‘South Africa: Statistics’, 31 December 2013, http://www.unicef.org/infobycountry/southafrica_statistics.html.
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60 ibid.
61 ibid 95.
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63 Thauer (n 12) Ch 1.
64 With regard to the operationalisation of asset specificity as an independent variable, it is conceptualised as consisting of two dimensions: the level of investments and their uniqueness. In the first dimension, the analysis measures the proportion of the workforce that receives training and the frequency and duration of training, as well as the personnel allocated for training. In the second dimension the assessment considers the number of personnel that a firm dedicates to the task of finding new employees and the time spent on headhunting for newcomers, and/or the availability of the skills level the production process requires from employees on the labour market: ibid Ch 4.
65 ibid.
66 To guarantee anonymity I have abbreviated their names.
67 With respect to the operationalisation of these programmes and activities as the dependent variable I concentrate on the practices of firms. These have two dimensions. The first entails disease prevention measures: free condom distribution, safer-sex campaigns, training that aims to prevent the spread of the disease or disease-related stigmatisation. The second dimension refers to the assistance and support that employees receive should they have already contracted HIV. Such assistance ranges from disease management – making appointments with doctors, harmonisation of treatment with work plans, etc – to free treatment of secondary diseases, provision of immune boosters and anti-retroviral (ARV) therapy on the level to which only privately insured patients typically have access: Thauer (n 12) Ch 3.
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69 Udayasankar, Krishna, ‘Corporate Social Responsibility and Firm Size’ (2008) 83 Journal of Business Ethics 167CrossRefGoogle Scholar; Börzel, Thauer and Hönke (n 36) 222.
70 Whereas AL has about 1,000 employees in South Africa, V has 60–70 employees.
71 Fe employs 2,200 persons in South Africa; CC has 500 employees.
72 They have between 50 and 100 employees.
73 See Thauer (n 12) Ch 4.
74 The slight deviation of the cases from an ideal linear relationship can be traced back to the differences in size among the firms. While firm size cannot explain much of the overall variation in Figure 1 – and is by itself also not a factor that motivates firms to embrace corporate social responsibility – it enhances or diminishes the effects of asset specificity: the larger the firm, the stronger the effect of asset specificity.
75 Secretary-General Kofi Annan, ‘Secretary-General Proposes Global Compact on Human Rights, Labour, Environment, in Address to World Economic Forum in Davos, 1 February 1999’, UN Press Release SG/SM/6881.
76 Flohr and others (n 16).
77 Thauer, Christian R, ‘Coping with Uncertainty: The Automotive Industry and HIV/AIDS Governance in South Africa’ in Börzel, Tanja A and Thauer, Christian R (eds), Business and Governance in South Africa: Racing to the Top? (Palgrave Macmillan 2013) 45Google Scholar; Hönke, Jana and Thauer, Christian R, ‘Multinational Corporations and Service Provision in Sub-Saharan Africa: Legitimacy and Institutionalization Matter’ (2014) 27 Governance 697.CrossRefGoogle Scholar
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79 See the recent special issue in Stephen Krasner and Thomas Risse (eds) (2014) 27(4) Governance.
80 Success can be defined in different ways. In its narrowest sense, it refers to efficacy – that is, that the respective governance programme is effectively implemented. In a wider sense, we can also think of success in terms of effectiveness as the (intended) behavioural changes a governance programme brings about in the target group. Finally, success refers to the impact the governance programme makes on the intended contribution to the problem it tackles. I refer here to the minimum definition of success: efficacy. If programmes are not efficacious, they cannot be successful in any other way.
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84 Hönke and Thauer (n 77).
85 The assumption of this argument is that the more actors are involved in close and reiterated cooperation, the higher the probability of value, norm and power conflicts, which make up for collective action problems.
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88 ibid.
89 ibid.
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92 Weinel (n 57); Nattrass (n 57).
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96 Dugger (n 93).
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107 Section 2 above.
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109 Börzel, Hönke and Thauer (n 43) 15–16.
110 Nattrass, Nicoli, ‘The State of the Economy: A Crisis of Employment’ in Daniel, John, Habib, Adam and Southall, Roger (eds), State of the Nation: South Africa 2003–2004 (Human Science Research Council Press 2004)Google Scholar 141; Organisation for Economic Co-operation and Development, ‘Economic Surveys: South Africa’, March 2013, http://www.oecd.org/eco/surveys/South%20Africa%202013%20Overview%20FINAL.pdf.
111 Interview with the CEO of NAAMSA, 13 February 2007, Pretoria.
112 See Roy Cokayne, ‘McCarthy Adds Cheap Chery Range’, Business Report, 12 May 2008, http://www.busrep.co.za/index.php?fSectionId=563&fArticleId=4397598; interview with the Chair of the Fuel and Emissions Committee of NAAMSA, 20 February 2007, Rosslyn; interviews with the Environmental Manager and the Corporate Planning Manager of a German MNC, 20 February 2007, Rosslyn; interview with the Occupational Health and Corporate Social Responsibility Manager of another German MNC, 26 February 2007, East London.
113 It did not pose a threat to the high-end market producers BMW and Mercedes, though.
114 Interview – NAAMSA (n 112); Interviews – Environmental Manager and Corporate Planning Manager (n 112).
115 South African emissions control standards are oriented towards European standards. In fact, they are direct translations of European standards. In Europe, emissions standards are abbreviated EURO 1–5 norms. The higher the EURO norm, the more recent its invention, and the more demanding (that is, restrictive) the prescribed emissions level.
116 Interview – NAAMSA (n 112); Interviews – Environmental Manager and the Corporate Planning Manager (n 112).
117 Overdevest and Zeitlin (n 100) 25.
118 On notions of the global level see Scholte, Jan Aart, ‘Defining Globalization’ (2008) 31 World Economy 1471.CrossRefGoogle Scholar
119 Interview with the Occupational Health and HIV/AIDS Program Manager of BMW, 14 February 2007, Midrand, and 19 February 2008, Cape Town.
