Market Enforcement Research Articles

A Legal Obligation on UK Employers to Conduct Labour Law Due Diligence: A Substantive Proposal

Abstract The use of non-financial reporting and due diligence legislation to force companies to address specific adverse effects of their operations has become an increasingly common tool for policymakers in recent years. To date, international legislative activity has mainly focussed on potential breaches of human rights and environmental obligations but has also included aspects of labour law. This article proposes a new law that adapts the concept of corporate due diligence to the field of labour law. The new law uses a reflexive model of legislation which is referred to as Labour Law Due Diligence. The under-resourced system of labour market enforcement in the UK and workers’ reluctance to use litigation to defend their rights means that persistent non-compliance by employers can go unpunished. Employers would be obliged to carry out an annual audit to assess whether they comply with key labour law obligations and make the results public. Non-compliant employers would need to remedy any unlawful practices within a year or face the prospect of enforcement action being taken against them. Through an evaluation of UK legislation which has attempted to force companies to address specific legislative goals through public disclosure of data, the article seeks to address the weaknesses of such legislation by involving stakeholders and introducing robust systems of enforcement.

Searching for institutions: upgrading, private compliance, and due diligence in European apparel value chains

This article argues that key avenues to improve working conditions – value chain integration, on the one hand, and lead firms’ compliance processes, on the other – have not resulted in improvements in the European apparel industry. Evidence is drawn from economic and social up-/downgrading trajectories in major apparel producing countries as well as a case study on social audits and labour market enforcement in the United Kingdom. Both suggest that institutions to prevent labour exploitation in supply chains have largely been ineffective. Institutional experimentation, which has been hybrid in combining hard and soft law as well as public and private governance elements, underlined the role of lead firms but continued to exclude civil society actors. It is argued that human rights due diligence, at the heart of many institutional experiments, draws on a deficient private compliance model, rather than building in worker-driven elements that could lead towards a better alternative.

Ecological development practices of marine ranching enterprises in China: Case studies of early movers

AbstractMarine ranching can help solve the dilemma facing food systems by providing more food for humans under the constraints of resources and the environment. Many marine ranching enterprises have committed to ecological development to help advance the 2030 Sustainable Development Goals. Little is known, however, about the drivers, initiatives, and performance implications of this behavior. To fill this gap, we conducted case studies of five early movers among marine ranching enterprises in China. These firms took both fishery output and environmental protection into consideration and achieved significant results. We identified six main drivers: “synergistic benefits,” “sustainable business value,” “government incentive and supervision,” “sense of social responsibility,” “environmental pressure,” and “market enforcement.” The main initiatives, meanwhile, were “habitat restoration,” “ecological production,” “science and technology innovation,” “ecological operation,” and “ecological management.” We showed that businesses' ecological development practices can generate synergistic benefits, including economic, environmental, and social benefits. Moreover, based on our key path analysis of early movers' ecological development practices, we developed an ecological development model to illustrate their successful experiences. This model can help guide other businesses toward fulfilling their ecological development commitments.

The bankers’ blacklist: unofficial market enforcement and the global fight against illicit financing

The bankers’ blacklist presents an artful paradox: its insights are greater than the sum of its parts. This is a thought-provoking book, both for champions of the self-described ‘coordinated global response to prevent organized crime, corruption, and terrorism’ and for those who see the modern anti-money laundering movement as a contender for the world's least effective policy experiment. While supportive of the official narrative, Julia Morse challenges some triumphal claims of the fight against illicit financing. The resulting difficulty for readers in placing the author in one camp or another is not in any way a weakness of the work. Instead, it allows Morse to offer a blueprint for brandishing power beyond traditional avenues of foreign policy. The book traces the geopolitical evolution of banks as unofficial enforcers in the ‘war’ on money laundering and reveals a template for power projection by proxy. The author sheds light on how technocratic agencies, yielding ostensibly objective criteria, effectively pull the strings in plain sight.

Financial market enforcement in France

Financial market enforcement in France

The making of irregular migration: post-Brexit immigration policy and risk of labour exploitation

This article highlights the role states have in creating the conditions under which labour exploitation can occur. Specifically, it identifies several immigration policy decisions related to the UK’s exit from the European Union that will likely result in an increase in the number of irregular migrants in the United Kingdom and how this increase, when combined with measures that have progressively restricted the rights and entitlements of various immigration categories, creates an environment conducive to labour exploitation. It presents measures that could help address this problem, including changes to immigration policies and the strengthening of the labour market enforcement system.

Банк России и аудит

The Russian Parliament is doing a lot of work to improve financial legislation, taking into account the requirements of the market and law enforcement practice. This year, in line with this work, in particular, Federal Law No. 359-FZ dated 02.07.2021 was adopted, which introduced significant innovations in the powers of the Central Bank of the Russian Federation in the field of auditing.

Anti-Corruption Enforcement and Organizations: A Narrative Review

ABSTRACT Context: in the administration literature, it is possible to identify several occurrences of the term enforcement, mainly related to studies of corruption. These mentions, however, are not uniform and often refer to different types of the phenomenon. In addition, they occur without connection to regulation studies, in which enforcement is a central concept. Objective: the objective of the present study is to identify the types of anti-corruption enforcement present in the administration literature in the light of the regulatory literature. Methods: we carried out a reflective thematic analysis on 31 articles in the administration area, selected in the Web of Knowledge database and published until 2017, in which corruption and enforcement appear in a related way. Results: at the end of the analysis, it was possible to identify four types of occurrence of the term in the literature: punitive, market, competitive, and cultural enforcement. These four types have unique characteristics in the light of the regulatory literature. Conclusions: the identification of types of anti-corruption enforcement contributes to differentiate the many ways in which the term is used in the literature. Furthermore, as a study of a typological nature, it offers a way to develop new theories, as well as to carry out empirical studies.

Anti-Corruption Enforcement and Organizations: A Narrative Review

ABSTRACT Context: in the administration literature, it is possible to identify several occurrences of the term enforcement, mainly related to studies of corruption. These mentions, however, are not uniform and often refer to different types of the phenomenon. In addition, they occur without connection to regulation studies, in which enforcement is a central concept. Objective: the objective of the present study is to identify the types of anti-corruption enforcement present in the administration literature in the light of the regulatory literature. Methods: we carried out a reflective thematic analysis on 31 articles in the administration area, selected in the Web of Knowledge database and published until 2017, in which corruption and enforcement appear in a related way. Results: at the end of the analysis, it was possible to identify four types of occurrence of the term in the literature: punitive, market, competitive, and cultural enforcement. These four types have unique characteristics in the light of the regulatory literature. Conclusions: the identification of types of anti-corruption enforcement contributes to differentiate the many ways in which the term is used in the literature. Furthermore, as a study of a typological nature, it offers a way to develop new theories, as well as to carry out empirical studies.

Quebec’s resilient redistribution model: Activation policies in the 2010s

AbstractCompared to the rest of Canada, Quebec has an ambitious and redistributive social model, which includes an elaborate set of Active Labour Market Policies (ALMP), with higher expenditures as a percentage of GDP, an encompassing coverage, and collaborative, multipartite governance arrangements. Since the 2008 recession, however, most OECD countries have implemented retrenchment measures, market enforcement, and individual action plans to their ALMP. Using provincial, federal, and OECD data and reports, this article maps the recent evolution of Quebec’s ALMP in light of these trends. Quebec’s model appears largely resilient, despite declining expenditures and modest concessions to conditionality in social assistance.

Smart Contracts for Securities Transactions on the DLT Platform (Blockchain): Legal Obstacles and Regulatory Challenges

In this paper, the author discusses how smart contracts can be used for securities transactions on the DLT network. First, the author discusses the legal nature of tokenised securities (crypto assets) encoded into smart contracts and argues that the legal basis of the underlying assets will continue to govern the rights of the holders. Transfers of tokenised securities also have contract law implications. There are several legal risks involved in such transfers, and there can be systematic failures if these risks are not mitigated. The author proposes to introduce a central counter party (CCP) system to mitigate these risks. Secondly, the author discusses how conflict of laws issues can affect market safety on the platform and also affect regulatory oversight. The author discusses the difficulties for market surveillance and enforcement proceedings involved in this cross-border securities trading platform. Thirdly the author discusses how this platform will affect current market practices such as securities lending and proxy voting. Despite any difficulties, there are also positive effects for individual investors.

Economics and Incentives Driving IoT Privacy and Security, Pt. 2

In summary, just as sensors and actuators effectuate data in the loT, risk economics effectuate privacy and security risk controls in the loT. Privacy and security in the loT depend on sensors (awareness and control of data collection, use and disclosure) and actuators (law and market enforcement functions) to precipitate underlying rights and interests. Key economic challenges to sensing and actuating privacy and security in the loT include: information asymmetries, incentives, uncertain costs and benefits, and enforcement We still have an opportunity to avert Groundhog Day relative to how security and privacy has played out on the Internet stage by tackling these issues head on in the development and deployment of loT.

Labour market enforcement in the 21st century: should whistleblowers have a greater role?

AbstractLabour market enforcement can be achieved through a variety of mechanisms. On the basis that inspectorates in the UK have been under‐resourced historically and that reliance on self‐regulation is particularly objectionable in sectors that have a record of providing low pay and poor working conditions, this article explores the potential for using whistleblowing by both workers and non‐workers as a method of enforcing labour standards. The author believes that, in principle, policing by inspectors working in conjunction with unions is particularly important in industries where small firms are prevalent and individuals may feel particularly vulnerable to retaliation if they speak up. Nevertheless, given the low likelihood of government inspections and low levels of unionisation in the private sector, it is suggested that enhancing the protection given to whistleblowers who report suspected wrongdoing might deter employer non‐compliance and prove cost effective.

Market enforcement under different legal regimes: a comparison of France and Canada

Building upon institutional theory, this study investigates whether and how market enforcement mediates the relationship between external (country-level) and internal (firm-level) corporate governance mechanisms. We focus on two countries with contrasting legal, regulatory and institutional regimes: Canada and France. Market enforcement is proxied by two measures of market efficiency: abnormal returns and price volatility. Our results suggest that external governance mechanisms interact with internal governance mechanisms via market enforcement, which differs greatly between both countries. Hence, the complementarity of internal and external governance mechanisms depends upon the nature and type of enforcement (i.e., emphasis on ex-ante monitoring and compliance vs. ex post sanctions).

The Enforcement of Financial Market Crimes in Canada and the United Kingdom

This piece undertakes a comparative analysis of the enforcement of financial market crimes in Canada and the United Kingdom. In both jurisdictions, financial market crimes have low enforcement rates for a multiplicity of reasons common to both jurisdictions. First, financial market crimes appear to be a relatively low priority for law enforcement officials who are required to devote increasing resources to violent crimes. Second, law enforcement infrastructure lacks financial resources which undermines the investigation and prosecution of financial market crime and fraud cases. Third, technology has allowed new types of fraud to develop, with insufficient human and financial resources to deal with them. Fourth, past treatment of financial market criminals as pillars of the community who have merely had a fall from grace has weakened public perceptions of the harm caused by these crimes. Despite the existence of agencies and regulators specially designated to address these issues, there seems to be no formal and effective strategy in either jurisdiction to tackle the problem of financial market enforcement. The problems with enforcement are not exclusively legal, and cannot be solved through legal reform alone. Nevertheless, reform to the law is essential in both jurisdictions. In particular, as this chapter argues, reforms should dedicate greater resources to financial market criminal enforcement, introduce principles-based regulation, and facilitate inter-agency coordination, as well as pursue other targeted regulatory reforms.

Blacklists, Market Enforcement, and the Global Regime to Combat Terrorist Financing

AbstractThis paper highlights how international organizations can use global performance indicators (GPIs) to drive policy change through transnational market pressure. When international organizations are credible assessors of state policy, and when monitored countries compete for market resources, GPIs transmit information about country risk and stabilize market expectations. Under these conditions banks and investors may restrict access to capital in noncompliant states and incentivize increased compliance. I demonstrate this market-enforcement mechanism by analyzing the Financial Action Task Force (FATF), an intergovernmental body that issues nonbinding recommendations to combat money laundering and the financing of terrorism. The FATF's public listing of noncompliant jurisdictions has prompted international banks to move resources away from listed states and raised the costs of continued noncompliance, significantly increasing the number of states with laws criminalizing terrorist financing. This finding suggests a powerful pathway through which institutions influence domestic policy and highlights the power of GPIs in an age where information is a global currency.

Constrained Regulatory Exit in Energy Law

In recent years, the federal government’s efforts to open up competitive electricity markets have transformed how we think about the regulation of energy. In many respects, the Federal Energy Regulatory Commission’s (FERC) broad “deregulatory” efforts, which commenced in the 1990s, might appear to be a case of paradigmatic regulatory exit as defined by J.B. Ruhl and Jim Salzman. But our case study of FERC’s restructuring of wholesale electricity markets reveals some important institutional features that make exit in federalism contexts, and under federal statutory duties, a rich and difficult problem. In the context of energy, exit from one regulatory sphere can create regulatory gaps. This has led FERC, which largely exited the regulation of wholesale electricity rates, to increase regulation in other spheres. It has also invited forms of intergovernmental exchange, as states have emulated or otherwise responded to FERC’s regulatory modifications in the areas in which states have jurisdiction. In this sense, the transition to competitive energy supply markets has involved constrained exit characterized by a hydraulic back-and-forth between regulators and institutions in an effort to ensure that statutory duties are fulfilled and other public needs are met. This assessment of regulatory exchange has a prescriptive implication: a federal regulator seeking to exit specific forms of conventional regulation needs to proactively develop strategies to facilitate regulatory exchange, while simultaneously preserving its authority over important substantive values related to its regulatory mission. Attention to “offsetting” regulations is often necessary to ensure that problematic regulatory gaps will not arise. In the energy context, these strategies might also include the use of mechanisms that give other institutions a voice in implementing exit strategies, as well as better ex ante regulatory planning for market enforcement that will continue after partial exit. We argue that it is not only a good strategy for federal regulators to recognize this hydraulic feature of exit, but that cooperative federalism statutes such as the Federal Power Act often require them to do so.

Beyond Employment Tribunals: Enforcement of Employment Rights by EU-8 Migrant Workers

Abstract Many EU-8 migrant workers work in low-skilled, low-paid jobs, particularly in sectors such as food processing and agriculture. Our interest lies in the experience of those migrant workers in the UK and specifically what happens when they are denied their employment rights. In earlier work, we have already shown that there was a significant underuse by EU-8 migrant workers of Employment Tribunals (ETs). So the questions for this article are three-fold. First, why do so few EU-8 migrant workers enforce their employment rights before ETs and to what extent do legal, economic, political and cultural landscapes, as they are experienced by migrant workers, constrain or enable enforcement action? Second, if migrant workers do not resort to ETs, what do they do? Do they simply move on, or do they use alternative enforcement mechanisms (such as the Gangmasters’ Licensing Authority)? How effective are these other enforcement processes and institutions in protecting the rights of migrant and similarly vulnerable domestic workers? And third, what might be done to improve the enforcement of employment rights for EU-8 migrant workers and for other vulnerable workers on the UK labour market, including non-EU migrants, especially in the light of the new labour market enforcement agency (LMEA)? We argue that the establishment of a Pay and Work Rights Ombudsman might help address some of the problems experienced by EU-8 migrant workers and other vulnerable national workers.

Natural Gas Market Movement and Enforcement Risk

The Federal Energy Regulatory Commission (FERC) has been working out the parameters of its enforcement authority ever since that authority was beefed up under the Energy Policy Act of 2005 (EPAct2005). Probably the most nebulous aspect of that authority is the responsibility to prevent and punish “market manipulation.” It seems that what is or is not manipulation is a lot like the old Supreme Court definition of pornography: you will know it when you see it.

New Institutional Accounting: Old Wine in New Bottles

Accounting has been regarded as a social and institutional practice, one that is intrinsic to, and constitutive of social relations, rather than derivative or secondary. The manner in which accounting has integrated with so many aspects of social and economic life has long been a continuing concern. Specific accounting events have been examined regarding their conditions of possibility and consequences. The expression “new institutional accounting” is used to capture research advances from the literatures of institutional economics and accounting on how the interactions of market forces, laws, regulations, standards, enforcement activities and other “institutions” affect corporate financial reporting and disclosure outcomes. Recent studies focus on the links between institutions and IFRS. One of the key objectives of the latest studies on IFRS adoption is to explore the differential impact of IFRS adoption across different types of firms and different institutional regimes. This paper explores the links between institutions and financial reporting outcomes with the focus on the links between institutions and IFRS adoption. The main argument proceeded in this paper is that the term “new institutional accounting” is coherent with the institutional nature of accounting while the word “new” denotes the new context in which such nature embeds. In other words, “new institutional accounting” is a new expression for the conventional knowledge about accounting. This new combination indicates an emphasis on the context associated with IFRS adoption, in which accounting is currently deployed.