Uneven Development, Uneven Response: The Relentless Search for Meaningful Regulation of GVCs

Abstract

The regulation of employment in global value chains (GVCs) is a story of the interaction of corporation and state in transnational space, where uneven international development has allowed the commodification and exploitation of international labour. Global standards are well articulated by bodies such as the International Labour Organization (ILO) and UN. We know what ‘decent work’ should look like as well as what all workers should enjoy as basic employment and human rights. Yet, internationally, the different mechanisms of private and public regulation fail at the point of implementation and across the world we see no fundamental shift in the condition of labour in terms of its capacity for social or economic upgrading. This article examines the regulatory mechanisms, and outcomes of regulation, of industrial relations in GVCs. It commends a future research agenda to illuminate the interaction between different sources of standards and rules and the complexities of intersecting private and public regulation, in the pursuit of enforceable, meaningful regulation of work and employment in international supply chains.

The role of psychological distance in organizational responses to modern slavery risk in supply chains

“…Workers face significant risk if they are identified in labor abuses, including income loss, violence, deportation, and possibly waiting years for criminal proceedings (ILO, 2016; LeBaron, 2021). This reinforces issues with organizations seeking to detect and remediate risk solely through their suppliers (Alamgir and Alakavuklar, 2018; Morris et al, 2020). Organizations would benefit significantly from knowledge interventions that highlight the relevance of workers to MSRM, and what outcomes for workers should look like (e.g.…”

“…Prior corporate efforts to govern labor risks in supply chains have been limited and largely unsuccessful (Gold, Trautrims & Trodd, 2015; Yawar & Seuring, 2017; Stevenson & Cole, 2018; Villena et al, 2021). Although firms have sought to communicate stricter labor requirements to their suppliers, these have not elicited much change in either the practices of suppliers or the extent of labor exploitation globally (LeBaron et al, 2017; Morris et al, 2020). Various reasons have been suggested for this with two main themes being that firms tend to emphasize institutions rather than the context in which exploitation occurs (Crane, LeBaron, Allain & Behbahani, 2019; Xiao et al, 2019), and that firms struggle to implement labor requirements beyond the first tier (Hajmohammad & Vachon, 2016; Villena & Gioia, 2018).…”

“…First, firms have sought greater use of globally applicable requirements in contracts and supplier standards to provide them with wide‐ranging legal protection. This reduces the specificity of information that organizations can communicate to suppliers, however, and is less adaptable to different business, social or political conditions (Crane et al, 2019; Morris et al, 2020). Second, firms' efforts to reduce the cost of monitoring large numbers of suppliers have led to fewer audits, or audits of only small numbers of ‘key’ suppliers (Hajmohammad & Vachon, 2016; Stevenson & Cole, 2018).…”

“…Some risk databases also provide out‐of‐date information, or produce estimates of modern slavery that have been the subject of considerable criticism (LeBaron, 2019; Hasan et al, 2020). Furthermore, the reliance of many firms on third party audits or supplier self‐reporting to assess labor risks in particular, has left them vulnerable to fraudulent auditing or deception by suppliers (LeBaron et al, 2017; Morris et al, 2020; Judd & Kuruvilla, 2021).…”

“…Recent surveys, for example, suggest that only 6% of firms audit their suppliers' labor practices beyond tier one and that only 10% of Boards appreciate how limited their monitoring of modern slavery risk actually is (BHRRC, 2021; Fair Supply, 2021). Firms have also relied heavily on formal reporting by suppliers to manage modern slavery risk which is out of touch with the ways in which labor exploitation occurs (LeBaron et al, 2017; Morris, Jenkins & Donaghey, 2020; Soundararajan, Wilhelm & Crane, 2021).…”