Transnational Business Governance Interactions Research Articles

Transnational Business Governance Interactions in Food Safety Regulation: Exploring the Promises and Risks of Enrolment

Transnational private regulation has been woven into the fabric of modern food safety governance. In this paper we explore the question of how domestic state actors respond to this development. We address this question in a detailed case study on the Global Food Safety Initiative (GFSI) and domestic food safety authorities in Canada, China, the Netherlands and the US. Why and to what extent do these domestic actors engage with GFSI in their regulatory activities, and what are the effects? To develop a better understanding of the how and why of this interaction, the paper builds on the concept of ‘regulatory enrolment’ developed by Black (2003). As will be argued, enrolment offers a proper analytical lens through which the nature of interplay between various actors in a regulatory regime can be better appreciated and the capacity of that regime as a whole can be enhanced in smart and innovative ways.

A System of Transnational Business Interactions: The Case of the Living Wage

The living wage standard has emerged as a norm in global initiatives targeting supply chain labor practices. This is unexpected, because the living wage, if actually paid, could impose substantial new supply chain costs. There is also considerable disagreement on how to calculate a living wage in practice. Therefore, the story of how the living wage ascended to become a standard term found in global labor supply chain initiatives provides an interesting case study on how norms and standards emerge through the complex interplay of transnational business governance (TBG) interactions. The subject of TBG interactions is an emerging field of study. These interactions are complex, involving multiple public and private actors crossing vast geopolitical spaces, with sometimes shared, but often conflicting interests. This complexity makes TBG interactions both an exciting new field of inquiry for scholars, but also an extremely challenging one. In these early days of theory development, it is useful to engage in a mapping exercise that will help scholars identify and test the relationships between the many inputs and outputs of TBG interactions. This paper contributes to this exercise by proposing and developing a basic open systems framework for analyzing TBG interactions. This new systems framework is demonstrated by reference to the complex story of the ‘living wage’ standard in private governance schemes targeting labour practices in global supply chains.

The Interaction between FSC Certification and the Implementation of the EU Timber Regulation in Romania

This explorative study aims to shed light on the ways in which Forest Stewardship Council (FSC) certification interacts with the implementation of the EU Timber Regulation (EUTR) in Romania. To this end, the EUTR implementation process is examined, and the relationship between this implementation and FSC certification is explored. There is a particular focus on the extent to which certification has helped companies to comply with EUTR requirements. The study uses the analytical framework of Transnational Business Governance Interactions (TBGI) and a mixed research approach. It is found that FSC certification has to a large extent helped companies to prepare for and align with the EUTR’s requirements, in particular concerning risk assessment and risk mitigation procedures needed for a due diligence system (DDS), and in the context of a “policy vacuum” period related to EUTR implementation. Moreover, recent changes in the FSC standard make it theoretically in line with EUTR requirements. However, difficulties remain in relation to the lack of information, costs and bureaucracy associated with both EUTR implementation and FSC certification. Notably, in the absence of a monitoring organization, the establishment of a viable DDS is still problematic as many companies remain unprepared for developing their own systems. Finally, the EUTR and its risk management requirements may have partly fueled the increase in uptake of chain of custody (CoC) certification in Romania. However, due to the risk of CoC certificates including illegally sourced timber, this recent uptake in certification does not necessarily indicate improved sustainable forest management (SFM) or full compliance with EUTR.

Transnational Governance Interactions: A Critical Review of the Legal Literature

Overlaps and interactions among diverse legal rules, actors and orders have long preoccupied legal scholars. This preoccupation has intensified in recent years as transnational efforts to regulate business have proliferated. This proliferation has led to increasingly frequent and intense interactions among transnational regulatory actors and programs. These transnational business governance interactions (TBGI) are the subject of an emerging interdisciplinary research agenda. This paper situates the TBGI research agenda in the broader field of transnational legal theory by presenting a critical review of the ways in which legal scholars have addressed the phenomenon of governance interactions. Legal scholars frequently recognize the importance of transnational governance interactions, but their accounts are tentative and incomplete for the most part. Scholars bring varying — often sharply divergent — theoretical, methodological and normative perspectives to bear on the issue. Some scholars focus on rule formation, others on monitoring or adjudication. Some investigate cooperation and convergence, others conflict and competition. Some examine interactions within a particular organization or program, others among programs or even between entire normative orders. Some emphasize description or explanation, others evaluation or prescription. In short, while understanding intersections among the multiple sites, scales and instances of law is a central concern of transnational legal scholarship, the picture that emerges is incomplete and fragmented.

Mapping the ascendance of the ‘living wage’ standard in non-state global labour codes

The living wage standard has emerged as a norm in global initiatives targeting supply chain labor practices. This is unexpected, because the living wage, if actually paid, could impose substantial new supply chain costs. There is also considerable disagreement on how to calculate a living wage in practice. Therefore, the story of how the living wage ascended to become a standard term found in global labor supply chain initiatives provides an interesting case study on how norms and standards emerge through the complex interplay of transnational business governance (TBG) interactions. The subject of TBG interactions is an emerging field of study. These interactions are complex, involving multiple public and private actors crossing vast geopolitical spaces, with sometimes shared, but often conflicting interests. This complexity makes TBG interactions both an exciting new field of inquiry for scholars, but also an extremely challenging one. In these early days of theory development, it is useful to engage in a mapping exercise that will help scholars identify and test the relationships between the many inputs and outputs of TBG interactions. This paper contributes to this exercise by proposing and developing a basic open systems framework for analyzing TBG interactions. This new systems framework is demonstrated by reference to the complex story of the ‘living wage’ standard in private governance schemes targeting labour practices in global supply chains.

Business and human rights: Understanding the UN Guiding Principles from the perspective of transnational business governance interactions

This article analyses the United Nations (UN) Guidelines on Business and Human Rights adopted in 2011 by the UN Human Rights Council from the perspective of transnational business governance interactions (TBGI) analytical framework.11 B Eberlein, KW Abbott, J Black, E Meidinger and S Wood, ‘Transnational Business Governance Interactions: Conceptualization and Framework for Analysis', (2014) 8 (1) Regulation and Governance 1. The article identifies and discusses dimensions of interaction and components of regulatory governance which characterize the Guiding Principles, focusing in particular on rule formation and implementation. The article notes that the Guiding Principles actively enrolled other actors for the rule-making process, ensuring support in a politically and legally volatile field. It identifies mutual ‘piggy-backing’ by the Guiding Principles and other TBGI schemes, complementing the Principles’ very limited limitation and enforcement modalities and lending support to rule-making and implementation of other schemes. The article concludes that the UN Guiding Principles are unique in several areas of relevance to transnational business governance interaction and indicates the relevance of the TBGI approach to public regulatory transnational business governance initiatives. The analysis of the Guiding Principles as interactional transnational business governance suggests that this form of governance offers prospects for public institutions as a means towards regulating global sustainability concerns.

Licensing the gatekeeper? Public pathways, social significance and the ISDA Credit Derivatives Determinations Committees

Regulatory relationships in financial markets exemplify the important and changing nature of transnational business governance interactions (TBGI) which involve reciprocal forces of influence between private and public regulators. We examine one key case of private governance in financial markets: the Credit Derivatives Determinations Committees (DCs) of the International Swaps and Derivatives Association (ISDA). We find ISDA to be a particularly resilient private regulator in an environment subject both to the significant external shock of the global financial crisis and intense pressure on governmental actors to demonstrate that they are counteracting risk. Clearly, ISDA operates as a key gatekeeper in TBGI, appearing to have a form of ‘regulatory licensing’ power in the DCs. This power is derived in an immediate sense from the propagation of a web of contracts and norms established by market actors, the content of which is substantially derived from instruments such as the Master Agreement, set down by ISDA itself. Equally important, we find that this regulatory licensing capacity is ultimately backstopped by an implicit delegation from public actors, which lends additional legitimacy to the DCs.

The interactive dynamics of transnational business governance: A challenge for transnational legal theory

Conflict, convergence, cooperation and competition among governance actors and institutions have long fascinated scholars of transnational law, yet transnational legal theorists' accounts of such interactions are for the most part tentative, incomplete and unsystematic. Having elsewhere proposed an overarching conceptual framework for the study of transnational business governance interactions (TBGI), in this article we propose criteria for middle-range theory-building. We argue that a portfolio of theoretical perspectives on transnational governance interactions should account for the multiplicity of interacting entities and scales of interaction; the co-evolution of social agency and structure; the multiple components of regulatory governance; the role of interactions as both influence and outcome; the diverse modes of interaction; the mechanisms and pathways of interaction; and the spatio-temporal dynamics of interaction. To suggest the value of these criteria, we apply them in a preliminary way to selected transnational legal scholarship and to the other articles in this special issue.

Is There Anybody Out There? Analyzing the Regulation of Children's Privacy Online in the United States of America and the European Union According to Eberlein et al. TBGI Analytical Framework

This article analyzes the regulation of children’s privacy online, especially in the context of personal information collection as a commodity, in the United States of America (USA) and the European Union (EU) according to the Transnational Business Governance Interactions analytical framework proposed by Eberlein et al. This article reviews the regulatory structure of the field in these two jurisdictions, including global organizations, according to Elberlein et al components and questions. In the analysis, a map of the regulatory interactions within this global realm will be presented and discussed. Analysis of the influence of each interacting party and the degree of interaction between parties demonstrates that there is a clear dominance of the industry in the regulatory realm of children’s privacy protection online. Therefore it is suggested to include an analysis of the regulatory interactions (e.g., using the TBGI analytical framework by Eberlein et al.) when discussing new or amended regulatory measures in each one of the levels described in this article. This will allow a better understanding of the overall regulatory picture and may prevent a bias towards more powerful actors, such as the industry.

The Interactive Dynamics of Transnational Business Governance: A Challenge for Transnational Legal Theory

Conflict, convergence, cooperation, competition and other interactions among governance actors and institutions have long fascinated scholars of transnational law, yet transnational legal theorists’ accounts of such interactions are for the most part tentative, incomplete and unsystematic. Having elsewhere proposed an overarching conceptual framework for the study of transnational business governance interactions (TBGI), in this article we propose criteria for middle-range theory-building. We argue that a portfolio of theoretical perspectives on transnational governance interactions should account for the multiplicity of interacting entities and scales of interaction; the co-evolution of social agency and structure; the multiple components of regulatory governance; the role of interactions as both influence and outcome; the diverse modes of interaction; the mechanisms and pathways of interaction; and the spatiotemporal dynamics of interaction. To suggest the value of these criteria, we apply them in a preliminary way to selected transnational legal scholarship and to the other articles in this special issue of Transational Legal Theory.

The Rise of Transnational Private Meta-Regulators

In recent years scholars from various disciplines have turned their attention to transnational regimes of regulation that are chiefly developed outside state-driven frameworks. The rise of such “transnational private regulation” has also led to the emergence of private meta-regulation. The term ‘meta-regulation’ commonly refers to processes through which a regulatory body oversees another and sets standards for its activities or performance of regulation. In the public domain, meta-regulation has been associated with the devolution of regulatory activities by a statutory body to private actors with the view to enhance voluntary rule compliance, awareness of responsibilities among the regulated and reduce public enforcement costs. However, in the transnational private domain the rationale for meta-regulation appears to be a different one. We contend that meta-regulation in this domain is less concerned with the goal of enhancing rule compliance and efficiency in enforcement, but instead is more prominently concerned with the bolstering of the integrity, legitimacy and accountability of private regulatory regimes and the coordination between such regimes. To furnish this argument the paper develops a comparative analysis of two sectoral private meta-regulators involved in transnational private regulation: the Global Food Safety Initiative in the food industry and the European Advertising Standards Alliance in the advertising industry. These two organisations have developed guidelines, benchmarks and performance indicators for other private bodies involved in transnational regulatory activities. The comparative analysis is focused around four principled and interlinked questions: (i) What has driven the emergence of meta-regulation in the private regulatory domain?; (ii) What are the forms and functions of private meta-regulation?; (iii) What is its relationship with public regulation and regulators?; and (iv) How and to what extent does private meta-regulation contribute to the legitimization of transnational private regulation?The TBGI Project: Transnational initiatives to regulate business activities interact increasingly with each other and with official regulation, generating complex governance ensembles. Heterogeneous actors and institutions interact at multiple levels and in various ways, from mimicry and cooperation to competition and conflict. The TBGI Project investigates the forms, drivers, mechanisms, dynamics, outputs and impacts of transnational business governance interactions (TBGI) from diverse theoretical and methodological perspectives. It is funded by a Social Sciences and Humanities Research Council of Canada grant led by Professor Stepan Wood, Osgoode.

Transnational Business Governance Interaction and Competition between StandarddSetting Initiatives: Labor Standards in Garment, Toys and Agriculture

This paper analyzes interactions within standard‐setting networks in the area of social and labor rights. We examine the shape of transnational business governance interactions (TBGI), pathways, and interaction mechanisms in three sectors: garments, toys and agriculture. Our comparative analysis of each of these sectors reveals meaningful differences in both the organization of regulation networks and the resulting level of competition among participants. Overall, we find that the creation of a more inclusive and more coherent standard in a whole business sector comes with the cost of weaker rules and less monitoring. These industry-specific observations provide a springboard for future studies of TBGI.

Private Governance, Public Implications and the Tightrope of Regulatory Reform: The ISDA Credit Derivatives Determinations Committees

Regulatory relationships in financial markets exemplify the importance and changing nature of transnational business governance interactions (TBGI). These interactions involve reciprocal forces of influence between private and public regulators. This paper examines one key case of private governance in financial markets: the emergence, structures and decision-making of Credit Derivatives Determinations Committees (DCs) of the International Swaps and Derivatives Association (ISDA). The paper highlights the mechanisms or ‘pathways’ of interaction between ISDA, governments, courts and public regulators. Interactions between state and non-state actors are shown to occur in both operational and policy spheres. ISDA is found to be a particularly resilient private regulator in an environment subject both to the significant external shock of the global financial crisis and intense pressure on governmental actors to demonstrate that they are counteracting risk. The reasons behind ISDA’s adaptive capacities are considered.

Business and Human Rights: Understanding the UN Guiding Principles from the Perspective of Transnational Business Governance Interactions

This article analyses the United Nations (UN) Guidelines on Business and Human Rights adopted in 2011 by the UN Human Rights Council from the perspective of Transnational Business Governance Interactions (TBGI) analytical framework (Eberlein et al. 2014). The article identifies and discusses dimensions of interaction and components of regulatory governance which characterise the Guiding Principles, focusing in particular on the rule formation and implementation. The article notes that the Guiding Principles actively enrolled other actors for the rule-making process ensuring support in a politically and legally volatile field. It identifies mutual ‘piggy-backing’ by the Guiding Principles and other TBGI schemes, complementing the Principles’ very limited limitation and enforcement modalities and lending support to the rule-making and implementation of other schemes. The article concludes that the UN Guiding Principles are unique in several respects of relevance to transnational business governance interaction and indicate the relevance of the TBGI approach to public regulatory transnational business governance initiatives. The analysis of the Guiding Principles as interactional transnational business governance suggests that this form of governance offers prospects for public institutions as a means towards regulating global sustainability concerns.

Transnational Business Governance Interactions and Technical Systems in Global Finance

Most transnational regulatory problems involve technical systems: extended sets of productive connections between humans, organized knowledge, and material objects. The functioning and relations between transnational business governance (TBG) schemes in any particular issue area are usually shaped by these technical systems. These technical systems and the material world that they interact with are not simply exogenous environments for TBG schemes. Individual TBG schemes can enhance their power and influence by expanding their function in a technical system, by incorporating the material aspects of the system into their activities, or by producing the system’s technical knowledge. I hypothesize that where a robust technical system exists, the degree of integration and the need for coordination of the activities it involves will mean that in most cases that technical system will be coordinated overall by only one TBG scheme. There are two exceptions: where technical systems overlap; or where the system is so weak that competitive pressures outweigh the factors contributing to specialization. The article develops these themes by drawing on theories that have focused on the social and political aspects of technical systems. The article identifies the contributions and limits of these theories and of a focus on technical systems in analyzing interactions among TBG schemes. The relevance of the theoretical points is assessed with regard to the TBG schemes that are active in global finance.

Transnational business governance interactions: Conceptualization and framework for analysis

AbstractThis special issue demonstrates the importance of interactions in transnational business governance. The number of schemes applying non‐state authority to govern business conduct across borders has vastly expanded in numerous issue areas. As these initiatives proliferate, they increasingly interact with one another and with state‐based regimes. The key challenge is to understand the implications of these interactions for regulatory capacity and performance, and ultimately for social and environmental impact. In this introduction, we propose an analytical framework for the study of transnational business governance interactions. The framework disaggregates the regulatory process to identify potential points of interaction, and suggests analytical questions that probe the key features of interactions at each point.

Technical systems and the architecture of transnational business governance interactions

AbstractThis article sets out the concept of a technical system and explores its ability to explain why some transnational regulatory domains are governed by a single transnational business governance (TBG) scheme, while in others there are many such schemes. By linking the numbers of TBG schemes that govern any particular transnational regulatory domain to technical systems in this way, important insights are provided into TBG interactions. Where technical systems are present, the TBG schemes that govern them will be specialized and complementary, rather than competitive. More generally, a technical systems approach illuminates the set of extended relationships that connect TBG schemes to the industry they seek to regulate. By tracing out these relationships we can reveal indirect interactions between TBG schemes that may be mediated through firms or market infrastructures. These indirect interactions can be obscured by approaches that only focus on the direct interactions among TBG schemes. The article analyzes two cases of TBG schemes in global finance. The first, derivatives, has a single overall TBG scheme. The second case, professional financial designations, has multiple competing TBG schemes.