The politics of supply chain regulations: Towards foreign corporate accountability in the area of human rights and the environment?

Abstract

In recent years, binding regulations in the “home states” of corporations have emerged mainly in the Global North with the aim of holding corporations accountable for human rights and environmental impacts throughout their supply chains. However, we still need a better understanding about to what extent such regulations contribute to enhance “foreign corporate accountability (FCA).” This article introduces a special issue that theorizes and empirically investigates foreign accountability dynamics. We do so by advancing an analytical framework that conceptualizes FCA and identify important contextual conditions that help to explain accountability dynamics. Applying this framework, we show that the drafting, implementation, and enforcement of such regulations are highly political processes, wherein competing ideas embedded within unequal actor constellations and institutional environments shape the possibilities to achieve more transformative change. By theorizing and empirically investigating FCA dynamics, we contribute to advance debates about the sustainability governance of global supply chains.

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

“…Importantly, FCA frequently entails unclear or contested accountability relationships. It is often unclear whether transnational companies are accountable to domestic or importing public authorities, consumers, or affected communities (Gustafsson et al, 2023a). Moreover, increasingly long chains of accountability in global trade (Park & Kramarz, 2019) and legal issues of jurisdictional competencies in a complex web of international and national soft and hard laws with different standards and free trade rules make it difficult to hold transnational companies accountable for negative socio‐environmental externalities (Gustafsson et al, 2023a; Weinstein & Charnovitz, 2001).…”

Traceability and foreign corporate accountability in mineral supply chains

“…From a different perspective, traceability data can be used by state actors, civil society organizations, and negatively affected stakeholders to hold companies accountable (Grant & Keohane, 2005; Gustafsson et al, 2023; Kramarz et al, 2022). If a chain's lead firms as well as environmental and human rights risks are widely known, regulatory authorities, civil society actors, and right holders have more leverage to push for the mitigation of these risks and the enforcement of certain standards by companies.…”

“…Severe human rights and environmental risks related to the extraction and processing of some minerals as well as the high level of complexity of mineral supply chains make it important and challenging to hold foreign companies accountable for possible malpractices in these chains (e.g., Deberdt & Le Billon, 2021; Kim & Davis, 2016; Nepstad et al, 2014). Foreign corporate accountability (FCA) is understood as the assumption of responsibility by companies in the Global North for negative social and environmental impacts of their operations or those of their suppliers and sub‐suppliers in the supply chain (Gustafsson et al, 2023). Environmental and human rights due diligence has gained importance in mineral supply chains; however, a lack of information about the provenance of minerals as well as production and processing locations and conditions presents a challenge for companies and actors that seek to hold companies accountable (Burritt & Schaltegger, 2014).…”

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

“…The analytical framework presented by Gustafsson et al (2023b) in the introductory paper sets out conceptual markers for the SI contributions. In their categorization of the contextual conditions of foreign corporate accountability, they focus on actor-promoted ideas and discourses, as embedded in relations of power and shifting institutional environments.…”

“…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. This shows how the politics of discursive interaction, driven by competing ideas on state and market authority, can generate distinctive policy outcomes.…”