Hardening corporate accountability in commodity supply chains under the European Union Deforestation Regulation

Abstract

The European Union (EU) has recently introduced the Deforestation Regulation to close regulatory gaps in the sustainability and legality of global forest and agricultural commodity supply chains. We analyze this regulatory policy change by drawing on accountability scholarship and institutionalist theories of regulation. Our results show that the Regulation aims to enhance corporate accountability mechanisms through mostly state‐based hard regulation of commodity supply chains, reducing the role of market incentives and private regulation. This policy change is found to be the result of strategic policy‐oriented learning from perceived accountability failures of existing soft market‐based instruments, voluntary trade agreements, and experience with market‐correcting EU timber legality trade rules in a politically favorable context. The institutionalization of new forest‐risk commodity supply chain accountability norms in new EU trade rules would, by design, harden foreign corporate accountability for negative socio‐environmental externalities. However, the de‐facto hardening will depend on the final regulatory design, acceptance, compliance, implementation, enforcement improvements, and avoidance of leakage effects.

The devil is in the detail—The need for a decolonizing turn and better environmental accountability in global supply chain regulations: A comment

“…The papers by Gustafsson et al (2023b) and Berning and Sotirov (2023) also employ a constructivist framework to analyze the regulatory uptake of HREDD for European supply chains, highlighting the role of CSOs in crafting broad coalitions for hardening previously soft norms on foreign corporate accountability. To explain the institutionalization of HREDD in France and Germany, Gustafsson et al (2023b) draw on a discourse analytical approach that, they claim, uncovers the multiple ways ideological power moderated political struggles over the interpretation and adoption of due diligence norms in both countries.…”

“…For example, the French Duty of Diligence Law (2017) emerges from, and embodies, a more “statist’ political system than Germany, with greater legal codification of corporate environmental responsibility for foreign supply chain practices. Berning and Sotirov (2023) similarly uncover the strategic, ideational work accomplished by civil society‐led political coalitions in shaping the due diligence regulations proposed by the European Commission (published November 2021) to minimize EU‐driven deforestation and forest degradation. Here, an advocacy coalition framework , focusing on normative and empirical core beliefs, informs their careful mapping of political alliance‐building—a study that questions the claim that this approach is theoretically inconsistent with discourse analytical ideas (e.g., Fischer, 2003, pp.…”

“…94–114). Berning and Sotirov (2023) also draw on public choice theory to argue that the political momentum to introduce new EU diligence rules on forest risk supply chains was only possible through a diverse mix of incentives for civil society, corporate, and governmental actors. Their novel blend of policy change theories suggests that a contextualized governance perspective can be open and flexible in its conceptual framing, as guided by concrete empirical questions.…”

“…In other fields, while alleviating consumers' concerns about circumstances of production, sustainability certification is argued to have provided little benefit to poor producers (Levidow, 2013: Postma et al, 2021). Papers in this SI give weight to the assessment that the trade effects of transnational supply chain regulations have not reduced economic asymmetries between importing and producer countries (Berning & Sotirov, 2023; Dehbi & Martin‐Ortega, 2023; Gustafsson et al, 2023b). Moreover, as Dehbi and Martin‐Ortega (2023) note, the procedural shortcomings in HREDD rule‐making are evident in the marginalization of Global South governments, accountability holders, and stakeholders from relevant policy processes in Europe.…”

“…In today's interdependent, digitalized world disasters, such as the collapse in 2013 of the Rana Plaza garment factory building in Bangladesh and the breaches in 2015 and 2019 of the Mariana and Brumadinho tailings dams in Brazil, have both made harms more widely visible and also heightened concerns in consuming (importing) countries about socio‐economic and environmental conditions at production sites (Kramarz, 2022). The contributions to this Special Issue (SI) examine a variety of regulatory practices that seek, however incompletely, a hardening of foreign corporate accountability (Berning & Sotirov, 2023; Schilling‐Vacaflor & Lenschow, 2021); that is, the institutionalization, legal codification and effective implementation of supply chain regulations.…”