Private Governance Research Articles

Unpacking Forest Stewardship Council certification in Chile: The scope and limitations of neoliberal market‐driven governance for achieving sustainable development

AbstractThe Forest Stewardship Council (FSC) is an international NGO promoting sustainable forest management by setting standards and certifying timber as eco‐friendly. After facing significant resistance from the Chilean forestry sector, which is plagued by environmental and territorial conflicts, FSC began certifying Chile's main forestry corporations in 2010. This article examines the implementation of FSC's standards by addressing two questions. First, how does FSC function in practice, including the roles of consultants, chambers, and instruments in the certification process? Second, what are the scope and limitations of FSC in achieving sustainable development and managing forestry industry conflicts? Elaborating on 24 interviews with key forestry stakeholders, ethnographic fieldwork, and documentary analysis, the findings indicate that FSC enhances management practices in the forestry industry by promoting legal compliance, rational production management, and improved relations between firms and local communities. FSC provides a green imaginary that ‘cleans up’ timber production as conflict‐free, facilitating its free circulation in the international market. However, as a private governance system, FSC is based on an artificial consensus that has limitations such as power imbalances between firms and communities, limited sanctioning power, and close ties with large industry actors. This neoliberal form of governance fails to resolve structural problems between industry and indigenous communities, yet it creates strategic opportunities for mediating the relationships between actors. In Chile, FSC enables incomplete citizenship for communities and serves as a ‘soft regulation’ for firms, reducing the likelihood of increased State regulation in the forestry sector.

The new private urban governance: Vestiges, ventures and visibility

Despite the growth, prevalence and influence of private urban governance, scholarship that explores the intimate workings of these manifold and mutating forms remains limited. While these private ventures carry forward elements from the past, the landscape of urban governance has nonetheless undergone profound transformation. Over the past few decades, the global expansion and influence of private governing ventures have reshaped how cities are managed, organised and experienced. This special issue on the New Private Urban Governance examines the constantly evolving modalities of private governance (i.e. business improvement districts/areas, condominium/strata corporations, gated communities, POPS and others) in a global context. Organised around new, interrelated themes of vestiges, ventures and visibility, this issue comprises case studies, syntheses of longstanding empirical projects and novel theoretical/conceptual interventions into political and spatial practices, knowledges and technologies of these privately governed realms. Focused on the spatialisation of politics, vestiges reflects the idea that while neoliberal forms of private urban governance continue to proliferate, they rely and build upon, rather than fully replace, earlier, more public governance practices, logics and spaces. Ventures emphasises that the private and market-oriented thrust of urban governance is heavily predicated on the protection and extraction of value and the intensifying financialisation of urban landscapes and life. Visibility highlights how governing technologies render private urban governance visible and in doing so highlight the politics of space. These three themes together expose the workings of the new private urban governance while invigorating further explorations of this complex phenomenon.

Analysis of Mapping the Private Sector Involvement in Correctional Institution Development and Operation Based on Public-Private Partnership (PPP) Model

This study integrates various views on the Public-Private Partnership (PPP) model in correctional institution based on the experiences of various countries (United States, United Kingdom, Australia, France, Japan, Canada). Referring to the terminology of PPP in a broad sense, the correctional institution PPP models according to this study are: 1) the “private governance” model; 2) the “hybrid management” model; 3) the “service infrastructure” model; and 4) the “contracting out certain limited functions” model. The characteristics of the four correctional institution PPP models are mapped in the task specifications in correctional institution, both in the development and operation stages of correctional institution. In the correctional institution development stage, there are design, construction and financing. In the correctional institution operation stage, there are accommodation services or building maintenance; management and administration; and correction services. Only the “private governance” model regulates the involvement of the private sector in all stages of correctional institution development and operation. Through an analysis of the terminology of “correctional institution” and correction function, this study elaborates on the characteristics of the four correctional institution PPP models by mapping private sector involvement in correctional services (order, amenity and service) which show the specific functional characteristics of correctional institution. The “private governance” model allows private sector involvement in all three aspects of correctional services, while the “service infrastructure” model does not allow the private sector to be involved in all aspects of the correctional services in question. The “hybrid management” model and the “contracting out certain limited functions” model allow private sector involvement in the amenity and service aspects, but not in the order or custody aspects. Keywords: correctional institution, correctional service, order-amenity-service, Public-Private Partnership (PPP)

Mobilizing carbon offsetting to reduce energy cost burdens: a new approach for calculating and monetizing the offset value of energy efficiency upgrades to low-income housing

Energy-inefficient buildings are a major driver of climate change. The aging, energy inefficient housing occupied by low-income households in the US and other high-income countries is a driver of notable environmental and health disparities as well. Public policies for alleviating the financial and health burdens of energy inefficient housing have existed for decades, but fallen short of reaching most households in need. This paper proposes a promising new approach to filling gaps left by public programs — one that relies on mobilizing the tools of private governance, carbon offsetting and the voluntary carbon market (VCM) to finance energy upgrades for low-income households. We develop a new and readily applicable methodology for calculating energy and carbon savings from efficiency upgrades based on readily accessible publicly available data. Tailored to the needs of estimating energy and carbon savings from efficiency upgrades to low-income units, rentals in particular, this methodology can be fruitfully deployed in monetizing the carbon savings from efficiency driven reductions in household energy use. Specifically, we propose packaging the emission reductions generated through energy savings as carbon offsets, then selling these offsets on the voluntary carbon market to generate financing for energy upgrades to low-income homes not served by public energy efficiency programs. Given the multiple economic and health co-benefits from low-income energy upgrades, we expect that carbon offsets generated through such upgrades will be attractive to many corporate and institutional offset buyers, particularly those who seek to fulfill climate commitments while also advancing economic and human development in their host communities.

The Readiness for Privacy Compliance in Indonesia Before October 2024

Privacy law in Indonesia is stipulated in Law No. 27 of 2022 will be fully effective on 17th October 2024. The duration of 2 years adjustment will be ended and many institutions and companies are preparing for compliance. The PDP Law was prepared to empower data privacy by applying to all companies that process the personal data of Indonesian citizens. This law refers to European privacy law: GDPR. Currently, the Indonesian government is preparing a Government Regulation as a derivative regulation of the PDP Law. In this article, the author will explain the most important parts and topics regarding this regulation as well as an assessment of its actual results and impact. Many government institutions are not ready to comply with this PDP Law. On the other hand, the financial industries, like banking as well as e-commerce, are already preparing a good privacy governance in facing fully applied PDP Law before October 2024.

Arc of avoidance: An analytical framework for analysing mining companies’ actions in the global South

Given the relationship between mineral extraction and conflict, human rights violations, and environmental degradation, there is an urgent need to examine how to mitigate harm in a more mineral intensive future. Thus far the literature has focused on two areas, the governance gaps present in the global governance of multinationals and the private governance scholarship which examines the rule-making power of mining firms. This paper argues that this story of mining firms' power is incomplete. Mining MNCs not only make rules, they also actively avoid regulations put in place to temper their impact on communities. To address this, the paper develops a chronological ‘arc of avoidance’, detailing the methods by which mining firms evade their fiscal and legal obligations to host communities. These methods include negotiation of tax concessions, tax avoidance, closing avenues of redress, and abandonment of mines without recourse. Using the case study of Paladin Energy, the paper confirms the power of large MNCs over governments and citizens of the Global South. It demonstrates that mining MNCs engage in avoidance tactics throughout the life of a mine, and that their power over host states does not weaken once investment has been made. Such tactics lead to entrenched negative outcomes for mining communities in the Global South. The findings reveal the full extent to which firms accrue the benefits and avoid the consequences of mineral extraction throughout the production process, and are of particular significance as we shift to extracting the resources required for the uptake of renewable energy.

Governance of intersecting value chains in an era of polycentric trade: the case of Kenyan fresh fruit and vegetables

Abstract Domestic value chains (DVCs) led by retailers within the global South often overlap with global value chains (GVCs) as well as domestic arm’s length markets. DVCs incorporate some private governance, but we know little about the role of public governance. Based on analysis of Kenyan fresh fruit and vegetables, we ask: How is the power (or ability) of lead firms to govern producers being reshaped by the increased complexity of polycentric trade in the Kenyan horticultural sector? We reveal constraints to lead firms’ ability to directly exercise bargaining power; and shifts towards institutional power in a context of polycentric trade.

From mitigation to adaptation: Problematizing climate change in the maritime transport industry

AbstractThe literature on climate change in the maritime transport industry has grown rapidly in the last few years. Yet as the research agenda has progressed, scientific debates have become more isolated and fragmented, making it difficult to translate new findings into broader policy debates. This article draws on problematization methodology to help organize the scientific debate on maritime emissions and to identify analytical gaps and challenges. We argue that scholars investigate shipping's emission problem from four distinct analytical perspectives— (1) international laws and regulations, (2) markets and economics, (3) engineering and technology, and (4) authority and legitimacy. Each of these perspectives problematizes maritime emissions in specific ways, leading to different policies and strategies to address the problem. We call for better integrating these four literatures and highlight three crosscutting areas and problems for future research. First, developing institutions that facilitate market and engineering solutions; second, integrating climate mitigation and adaptation research; and third, focusing on justice concerns to ensure an equitable green transition in the maritime industry.This article is categorized under: Climate, History, Society, Culture > Thought Leaders Policy and Governance > International Policy Framework Policy and Governance > Private Governance of Climate Change

Smart mix politics: business actors in the formulation of global supply chain regulation

The European Union and other advanced economies are turning to mandatory due diligence regulation to address environmental and human rights risks in their global supply chains. This shift is accompanied by calls for ‘smart regulation’ that combines public legislation with private governance instruments and new supporting measures in the producer countries of the Global South. We study the smart regulation agenda in the case of the European Union Deforestation Regulation. We reveal how its progressive rhetoric masks a conservative undertone as business actors and their civil society partners aim to safeguard their vested interests in the age of public supply chain regulation. However, by tracing their lobbying efforts throughout the policy formulation process, we show how this does not imply en bloc support for voluntary, softer forms of regulation. Moreover, these actors exhibit varying motivations and preferences for involving Southern actors in such a mix. Consequently, rather than forming a cohesive policy coalition, their preferences span from conservative to progressive, resulting in new alliances and divisions in this time of regulatory change. By untangling the complexities of ‘smart mix politics’, this article advances critical research into the evolving role, positioning, and influence of business actors in global supply chain governance.

Collaborative governance and personal relationships for sustainability transformation in the textile sector

This paper explores the potential for collaborative governance in the textile sector to act as a catalyst for sustainability transformation. The article originated from a 4-year research project examining a multi-stakeholder initiative (MSI), the German Partnership for Sustainable Textiles. It sheds light on the complex but interdependent connections between collaborative governance and personal relationships. While emphasising the role played by MSIs in creating important space for negotiating interests, it points towards the co-benefits of building relationships beyond stakeholder boundaries. Obstacles such as governance structures and the fragmentation of the governance landscape hinder opportunities for personal, political, and practical transformation. While highlighting the importance of private governance, it also stresses the role of state regulation in global economies, e.g. in the current debate on the EU Due Diligence Act. Finally, suggestions are made for designing governance spaces that support the development of social relationships while promoting transformation by ensuring the equal participation of stakeholders, employing learning and facilitation experts, and promoting joint decision-making processes.

Redundancies, layers, and dilemmas: Comparing private standards and public regulations in lithium mining

An expanding array of transnational Environmental, Social, and Governance (ESG) standards has emerged to mitigate harms across critical minerals supply chains. This proliferation of international, private governance standards is interacting with domestic, public regulations guiding mining activity in resource rich states. When private and public requirements duplicate, overlap, or diverge they can create inconsistent processes, administrative burden, and dilemmas through a patchwork of basic components in supply chain management (Cashore et al., 2021). Applying a typology of interactions between private authority and public policy to lithium mining in Argentina, we argue that private/public rules are loosely complementary in some respects and independently coexisting in others. Comparing a rigorous private standard, the Initiative for Responsible Mining Assurance (IRMA), to public regulations we find that both include similar provisions for environmental protection and public participation . IRMA provides better protections for indigenous peoples’ participation, though it lacks significant enforcement mechanisms. Questions remain over the private sector's ability to guarantee – in practice – the rights of indigenous and other affected communities, or to protect ecosystems in the rush for critical minerals. Resulting governance dilemmas illustrate an increasingly crowded regulatory space in lithium mining that indiscriminately presumes public regulatory gaps, while it privatizes accountability.

Forest conversion and timber certification in the public plantation estate of NSW: Implications at the landscape and policy levels

This paper investigates the clearance of native forests and native vegetation for plantation establishment, otherwise known as forest conversion, in the state-owned plantations of New South Wales, Australia. It begins by describing Australia’s forests, plantations, and forest conversion, continues with an outline of the history of public hardwood plantations in New South Wales, and explores the regulatory frameworks that allow this practice to happen, and the responses adopted by non-state environmental governance systems, notably forest certification, to address this problem. The paper presents a case study analysis of conversion in the hardwood plantations of northern NSW, and concludes that the current regulatory environment facilitates deforestation, with cumulative impacts at the landscape level, and that without government intervention, efforts to prevent this by non-state action will only be partially successful, leading to ongoing habitat and species loss. The failure of existing legislative and regulatory frameworks to adequately acknowledge, define, and prohibit conversion will remain an impediment to sustainable forest management, as the entry of such timber into the market contaminates supply chains, resulting in considerable reputation risk. Reform is needed in both public and private governance systems to ensure strong governance, effective planning, and ecosystem integrity at the landscape level. Recommendations are provided for policymakers.

Toward global net zero: The voluntary carbon market on its quest to find its place in the post‐Paris climate regime

AbstractThis focus article traces the evolution of the voluntary carbon market (VCM), putting emphasis on the more recent developments following the adoption of the Paris Agreement in 2015. It focuses on the interplay between the privately governed VCM and the global climate regime under the United Nations (UN). For years, the VCM and the UN carbon market operated in parallel and mutually influenced each other. The adoption of the Paris Agreement, however, marked a turning point for the VCM. It triggered the proliferation of net zero targets, sparking the interest in the VCM as a supplier of carbon credits to offset companies' remaining emissions. At the same time, the global scope and ambitious targets set by the agreement have put the future of the VCM in limbo, raising concerns about double claiming and more generally, questioning the adequacy of offsetting. Considering these challenges, numerous stakeholders have started a process to redefine the rules of the market to ensure its credibility and legitimacy. While some areas of convergence were identified, the VCM's private governance has long been unable to address the question of how to deal with double claiming and the claims companies should be allowed to make. In this situation, signals from international policy and regulation under national policy point the way forward for the VCM. By moving from offsetting toward a contribution claim model, the VCM may overcome its “identity crisis” and find a new place within the broader climate change regime.This article is categorized under: The Carbon Economy and Climate Mitigation > Policies, Instruments, Lifestyles, Behavior Policy and Governance > Multilevel and Transnational Climate Change Governance Policy and Governance > Private Governance of Climate Change

Can retail investor activism inhibit corporate greenwashing behavior: Evidence from investor interactive platforms in China

Different from developed markets, China capital market is dominated by retail investors. In the digital age, retail investors are increasingly making their voice heard through online channels, which is a new form of shareholder activism in China. This paper examines the association between retail investor activism (RIA) and corporate greenwashing behavior (CGB) using the data of question raised by investors on official investor interactive platforms (IIPs) in China. We discover that the RIA on IIPs is negatively associated with CGB. The mechanism analysis shows that the RIA helps to curb CGB through promoting information transparency and improving internal corporate governance level. We also find that the association between RIA and CGB is strengthened in regions with weaker green finance and environmental regulation, and in industries with weaker product market competition. This indicates that the RIA, a type of private governance, can serve as a substitute to the governance effect of the government and the product market. Further studies show that RIA on unofficial channels such as stock forums or search engines can promote CGB, contrary to the conclusion about IIPs. Our research suggests that strengthening the rights of retail investors through official channels helps to reduce CGB and demonstrates the importance of official channels in the governance role of RIA in emerging markets.

Corporate zero deforestation commitments and company-internal organizational change

This paper addresses knowledge gaps related to implementation of corporate zero deforestation commitments (ZDCs). Drawing on an analytical framework of organizational change, we scrutinize changes and processes internal to a company in adjusting to zero deforestation supply chains. The empirical data consists of 48 online questionnaires and 49 online interviews with actors involved in forest-risk commodity supply chains, both internal actors in companies and external actors (e.g., non-governmental organizations). Concerning organizational changes, the findings show that diverse drivers have triggered companies to adopt ZDCs, but most are external drivers. Organizational change following ZDCs has taken place within companies but only to a limited extent. Our study concludes that while corporate ZDCs can be seen as having advanced private governance in the fight against deforestation, more is needed still for effective implementation. Public governance and regulations could play an increasing role in stimulating adoption and implementation of private governance initiatives, like corporate ZDCs.

“It should be much faster fashion”— textile industry stakeholders’ perceptions of a just circular transition in Tamil Nadu, India

There is a need for a paradigm shift to circular, sustainable textile systems. The transition will have impacts on people and businesses around the world, yet research on the circular economy has been overly focused on the economic and environmental dimension, lacking in the social dimension. Without design for comprehensive justness, the transition can reproduce or lead to novel injustices. We use distributive, procedural, and recognitive justice dimensions to analyze and uncover justness aspects related to the circular transition in the textile industry in Tamil Nadu, India. Our qualitative analysis is based on interviews with stakeholders of the industry. We uncover several justness tensions related to economic, social, power, value, epistemic, and governance issues. For the just circular transition to succeed, the tensions should at the very least be acknowledged, and ameliorated or dealt with when possible. The building blocks for this process are, for example, codesign of private governance systems, sharing the costs of the transition more equally and inclusion of various voices in knowledge production. As a step forward from the current situation in which a circularity focused approach and a justness focused approach emphasize different aspects, we present a new framework for designing just circular transitions, one that bring these important perspectives together.

Neighbourhood social capital and political participation in neighbourhood governance: The case of Beijing, China

Determinants of individual participation in neighbourhood public affairs have been subject to growing scholarly interest. Urban scholars have adopted the social capital perspective to understanding both informal forms of civic engagement and formal participation in local politics. However, given the mixed findings from the existing literature, whether the social capital theory applies to understanding neighbourhood political participation in Chinese cities requires further investigation. This paper thus examines, in the context of housing marketization and neighbourhood governance reforms, the extent to which neighbourhood social capital promotes neighbourhood political participation among urban residents in China. Using data from a large-scale questionnaire survey conducted in 2017 in Beijing, China, we conducted statistical analysis and found an overall positive relationship between neighbourhood social capital and voting behaviour in neighbourhood elections. However, not all dimensions of social capital are significant, and the positive effects are more salient in newly-developed neighbourhoods of private governance, but not in traditional neighbourhoods in Beijing. These findings extend the international literature on the social capital theory of neighbourhood political participation with additional evidence from a developing country, while also contributing to an emerging line of inquiry on the determinants of civic engagement in neighbourhood governance in transitional urban China.

The 10th Anniversary of the Bangladesh Accord: Facing the Impact of Governance Gap on Employment Relations

The Bangladesh Agreement was signed in 2013. This article revisits the Bangladesh Accord on its tenth anniversary and explores how lessons from the Bangladesh Accord reveal the profound impact of governance gaps on contemporary employment relations. Today, with the globalization of economic activities and the further intensification of governance gaps, it is very meaningful to explore the impact of governance gaps on employment relations. This article explores how governance gaps impact employment relations by examining the implementation and outcomes of the Bangladesh Accord. and further considers the limitations of the impact of private governance on transnational employment relationships. Ultimately, this article believes that the impact of governance gaps on employment relations is powerful and inevitable, and even effective private governance appears to be so vulnerable in the face of governance gaps.

Coffee production networks in Costa Rica and Colombia: A systems analysis on voluntary sustainability standards and impacts at the local level

The systems analysis framework has permeated the social and political sciences, and its use is increasing in the analysis of global value chains. Nevertheless, minimal research has applied this systems analysis to investigate voluntary sustainability standards (VSS) in the value chain. This study employs systems analysis to explore the role and interactions of VSS in the coffee value chains of Costa Rica and Colombia. Using discourse analysis, the study identifies in the discourses of interviewed stakeholders system traps (this means specific archetypes systems tend to evolve when not balanced) and leverage points that can initiate rapid and significant changes in complex systems when introduced. The interviewed stakeholders cited numerous examples of events related to the identified traps and leverage points in the value chains examined. Another relevant finding is the coherence of these discourses, which were consistent and had no contradictions in different stakeholders’ expressions. The findings contribute to the research regarding private governance in the agricultural sector, introducing a new analytical framework.

Key stakeholder perceived value’s influence on autonomous vehicles’ privacy and security governance – an evolutionary analysis based on the prospect theory

Purpose The promotion of autonomous vehicles introduces privacy and security risks, underscoring the pressing need for responsible innovation implementation. To more effectively address the societal risks posed by autonomous vehicles, considering collaborative engagement of key stakeholders is essential. This study aims to provide insights into the governance of potential privacy and security issues in the innovation of autonomous driving technology by analyzing the micro-level decision-making processes of various stakeholders. Design/methodology/approach For this study, the authors use a nuanced approach, integrating key stakeholder theory, perceived value theory and prospect theory. The study constructs a model based on evolutionary game for the privacy and security governance mechanism of autonomous vehicles, involving enterprises, governments and consumers. Findings The governance of privacy and security in autonomous driving technology is influenced by key stakeholders’ decision-making behaviors and pivotal factors such as perceived value factors. The study finds that the governmental is influenced to a lesser extent by the decisions of other stakeholders, and factors such as risk preference coefficient, which contribute to perceived value, have a more significant influence than appearance factors like participation costs. Research limitations/implications This study lacks an investigation into the risk sensitivity of various stakeholders in different scenarios. Originality/value The study delineates the roles and behaviors of key stakeholders and contributes valuable insights toward addressing pertinent risk concerns within the governance of autonomous vehicles. Through the study, the practical application of Responsible Innovation theory has been enriched, addressing the shortcomings in the analysis of micro-level processes within the framework of evolutionary game.