A.Purposes of This Book
Until now, stories of nature, livelihoods, or lives being destroyed by GVC capitalism in countries on the periphery of global production have failed to shock the public anywhere near as much as the story of humans dying from a virus, such as the 2020 coronavirus (Covid-19) pandemic, in the centre of global production. Possibly, if the media provided daily updates (as they did for the number of Covid cases) on the natural habitats destroyed and thousands of people dead or dying along GVCs, this might challenge the status quo. But it is entirely possible that even that level of publicity would fail to generate a response. This leads to one of the biggest issues of our time, which goes beyond legal or even legal-political problems: the normalisation of irresponsibility and impunity for the wrongdoings of corporations who operate transnationally. It is therefore crucial to tell a different story, which, before looking for solutions to the above problem, first addresses its root causes.
Hence, the question ‘why CSL?’ arose because, until now, corporations had seldom been held accountable – and virtually never legally responsible – for transboundary harm along GVCs that often results from their subsidiaries’ and subcontractors’ acts or omissions. The wrongs attributable to corporations operating transnationally stretch from armed conflicts and atrocities within and across third world countries, through discrimination and violence against indigenous peoples and local communities in both first and third worlds, to pollution, destruction of the environment, and global climate crisis. For some time, actors as diverse as academics, workers, investors, members of civil society, and individual consumers have argued that corporations should finally take on a fair part of their responsibility for the individuals, communities, and environments affected by the outsourcing of their operations. At the same time, nowadays there seems to be a certain acceptance by society at large that such atrocities are here to stay, thanks to the ever-tightening grip of global capitalism.
The question ‘why global value chains?’ arose because GVCs epitomise contemporary forms of global capitalism. It is argued that GVCs are essentially marked by a shift from vertically integrated firms to the horizontal contractual arrangements between affiliated entities within a transnational network of enterprises.2 For more than a century, traditional contract and corporate law constructs of privity, separate legal personality, and limited liability have been reducing the exposure of vertically-integrated corporations to law enforcement action. Today, those constructs make it even more difficult to enforce law against the GVC lead firms because of the horizontal nature of dispersed GVC production. GVCs thus reshape and streamline the whole geoeconomics of – now, globalised – production, thus also marking a legal transformation of transborder business transactions and broader international economic relations. Those dynamics, in turn, introduce multiple governance gaps: not only distributional disparities both in terms of geographic location and social group, but also regulatory ones across and between jurisdictions and regions. Together those gaps constitute, in legal terms, a responsibility deficit within, and indeed of, GVCs.
As Duncan Kennedy said, in paraphrasing Max Weber, ‘interpretation positing gaplessness requires the interpreter to apply in every case, according to their meanings, the legal norms he or she can derive textually, conceptually, or through precedent; it categorically forbids reference to purposes and policies’.3 While Kennedy addressed particular issues of legal interpretation, and not GVC capitalism, the opposite, gap-filling, approach of this book is an inclusion of other relevant contexts, looking precisely at the purposes and policies behind applicable – as well as non-applicable – legal norms. As noted above, today we badly need a story that, before looking for the solutions to the problem, will address the root causes of the problem. This book is different from most book-length existing literature on the subject-matter, in that it looks squarely at other, non-legal but nonetheless still relevant contexts to explain the contemporary legal status quo regarding transnational corporate liability. Relevant historico-dogmatic, social, economic, and political accounts all blend together to form what I refer to in this book as ‘GVC context’.
Today’s transnational ‘GVC’ norms comprise CSR, corporate, and contractual regimes, as well as transparency, due diligence, and liability legislation. My general idea behind the project for this book is that canvassing everything that happens under the banner of ‘corporate social liability’ – all that is debated, decided, produced, and dropped – can give us a new understanding of transnational economic governance in more subtle ways, moving beyond either doctrinal and dogmatic deficit or excess.
Where does the term ‘CSL’ come from? Contrary to corporate accountability, sustainability, CSR, just social responsibility and just corporate liability, it is not a phrase that is widely – if at all – used, as I coined the term ‘corporate social liability’ myself. Corporate liability generally covers the extent to which a corporation as a legal person can be held liable for the actions of its managers and employees, including personal injury claims, corporate manslaughter and corporate homicide – thus being a mere employer’s responsibility for whatever its employees do, typically by negligence, including numerous exceptions to such liability. The tort of negligence and the tort of breach of statutory duty are the typical venues, and corporations are thus virtually never exposed to broader claims by local communities, environmental groups, and civil society in ge...