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The Case for an ILO Convention on Supply Chain Responsibility
The Case for an ILO Convention on Supply Chain Responsibility
Common Law Backdrop (2) Boundaries of Firm & Employment
Common Law Backdrop (2) Boundaries of Firm & Employment
“It is the fact of direction with is the essence of the legal concept
“It is the fact of direction with is the essence of the legal concept
The Case for an ILO Convention on Supply Chain Responsibility
The Case for an ILO Convention on Supply Chain Responsibility
Wal-Mart’s Supply Chain Management
Wal-Mart’s Supply Chain Management
Civil Society Practice
Civil Society Practice
Wintek worker Jia Jingchan, injured by use of n-hexane to clean iPhone
Wintek worker Jia Jingchan, injured by use of n-hexane to clean iPhone
SACOM Report, May 2011 (Following Chengdu explosion)
SACOM Report, May 2011 (Following Chengdu explosion)
SACOM Report, May 2011 (Following Chengdu explosion)
SACOM Report, May 2011 (Following Chengdu explosion)
2012 Dhaka Fire & 2013 Rana Plaza Collapse
2012 Dhaka Fire & 2013 Rana Plaza Collapse
2012 Dhaka Fire & 2013 Rana Plaza Collapse
2012 Dhaka Fire & 2013 Rana Plaza Collapse
Key provisions: (a) Brands commit to source from compliant factories
Key provisions: (a) Brands commit to source from compliant factories
Norm of SCR in Int’l Legal Instruments
Norm of SCR in Int’l Legal Instruments
Norm of SCR in Int’l Legal Instruments
Norm of SCR in Int’l Legal Instruments
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The Case for an ILO Convention on Supply Chain Responsibility

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1The Case for an ILO Convention on 17Responsibility for Justice (2011); various
Supply Chain Responsibility. Brishen by Dahan, Lerner & Milman-Sivan.
Rogers Temple University Beasley School of 18Norm of SCR in Int’l Legal
Law July 10, 2015 Presentation at RDW 2015 Instruments. Ruggie Principles:
Conference. “...responsibility to respect applies
2 across its business activities and through
3Common Law Backdrop (1) No Duty to its relationships with third parties…such
Rescue. In U.S. & many other nations’ as business partners, entities in its
tort law, A usually has no duty to protect value chain, and other non-State actors”
B against harms that A has not caused OECD Guidelines for Multinational
Classic example: if A sees B drowning in a Enterprises (2011): require firms to
public space, A need not help even if “avoid causing or contributing to adverse
doing so would cost A nothing. In fact, A impacts” and to engage in “social dialogue
may “sit and smoke his cigar” while B on responsible supply chain management”.
drowns. (Some exceptions). 19Recent Proliferation of State Laws
4Common Law Backdrop (2) Boundaries of Reflecting SCR. United States: Alien Tort
Firm & Employment. Firms are “Islands Statute Dodd-Frank Provisions on conflict
of conscious power in this ocean of minerals (FLSA’s expansive definition of
unconscious co-operation like lumps of “employer”) (NLRA’s garment &
butter coagulating in a pail of construction industry provisos, and
buttermilk.” (Coase 1937) Optimal scope of proposed joint employer standard)
a firm is determined by transaction costs California Transparency in Supply Chains
of utilizing market sourcing rather than Act (2012) California “Brother’s Keeper”
command structures. Law Good caselaw developing.
5“It is the fact of direction with is 20State Laws Reflecting SCR.
the essence of the legal concept of Netherlands: joint liability common for
“employer and employee” just as it was in harms to contracted workers in the country
the economic concept [of the firm]” (Coase U.K., France, Denmark require large
1937) Generally no employment law duties companies to report on CSR initiatives
toward non-employees, which creates Proposal in French Parliament to create
incentives to purchase goods rather than statutory “duty of care” of companies
produce in house. Partial solution in US: toward supply chain workers Many in
“joint employer” doctrine (in FLSA) can trafficking: Gordon (ILO 2015) and
occasionally reach user firms (like farms) Andrees, Nasri, Swiniarski (ILO 2015.
but not food chains or retailers. 21Toward Supply Chain Liability in Tort
6 Law.
7Wal-Mart’s Supply Chain Management. 22Substantive Impediments/Possibilities
http://courses.ischool.berkeley.edu/i290-4 Under U.S. Tort Law. In U.S. tort law,
s02/readings/line56supplychain.gif. usually no duty to protect others against
8Summary. In contemporary global supply harms by third parties. Exceptions: (1)
chains, MNCs have power w’o Duty of reasonable care where one has
responsibilities Regulations based on agreed to protect another against
employment relationship within one state particular harms (2) Duty to warn or
can’t ensure decent work But norms of protect where one has non-negligently
supply chain responsibility now created a risk of harm (3) Duties to
well-developed in civil society, and are protect arising out of “special
beginning to take root in positive law relationships” – limited cases where D has
Tort law as promising site for development substantial/exclusive power to protect P.
of supply chain liability 23Key Cases. Doe v. Wal-Mart, 572 F.3d
Possibilities/impediments to this now – 677 (9th Cir. 2009) (no duty to monitor
especially jurisdictional questions suppliers where D made no binding
Potential for ILO to help process along. contractual commitment to do so) Holds
9The Emergence of Supply Chain open possibility of such liability where
Responsibility? an MNC does make such a commitment Kasky
10The Emergence of Supply Chain v. Nike, 27 Ca. 4th 939 (2002) (possible
Responsibility? Civil society practice liability under state consumer protection
(MNCs and NGOs) Private lawmaking laws for misleading statements re: supply
(Bangladesh Accord) International legal chain labor conditions) But constitutional
regimes (Ruggie etc.) Public lawmaking status of decision is unclear. Rana Plaza
(various examples). litigation, (filed 2015, D.D.C.).
11Civil Society Practice. NGOs and 24Procedural Impediments to Supply Chain
consumers very often call on brands to Liability Under U.S. Tort Law. (Treaties
exert their market power to ensure decent generally have no direct effect on MNCs –
work in their supply chains. Basically all instead bind states to regulate employment
MNCs now have CSR policies. Many commit relationships) Jurisdiction & venue
brands to ensuring decent working questions Judicial aversion to “foreign”
conditions at suppliers. claims Choice of law questions
12Wintek worker Jia Jingchan, injured by Substantive: which state’s tort law?
use of n-hexane to clean iPhone: “We hope Procedural: jury trial? Punitives? Class
Apple will heed to its corporate social action?
responsibility”. 25The Case for ILO Standard-Setting.
13SACOM Report, May 2011 (Following 26Why the ILO? Transnational rulemaking
Chengdu explosion). “Foxconn has primary necessary to resolve procedural Qs ILO is
responsibility in labour rights abuses. the recognized site for definition and
The clients, including Apple and HP, which promulgation of int’l labor standards
declare decent working conditions at their Employer participation enhances legitimacy
suppliers have indispensible obligations Strategic advantages of ILO Can solve
to put their promise into practice.”. “assurance game” problem Can negotiate
142012 Dhaka Fire & 2013 Rana Plaza north/south conflicts ILO’s monitoring
Collapse. Over 1200 killed – leads to & technical assistance capacity may be
pervasive calls for brand responsibility, helpful for any new regime.
eventually to Accord. 27Precedents at ILO. Better Work
15Import of this Norm. Not yet a Supply-chain governance; Shared
significant constraint on MNCs. But: (1) responsibility Declaration on MNEs (1977,
Shows public consensus around brands’ 2000, 2006) Defines duties for MNEs,
duties, so important backdrop to lawmaking though limited to their direct employees
(2) “Soft law” norms can be adopted into Maritime Convention (2006) Shared
“hard law” regimes via adjudication (3) jurisdiction -- flag states & port
Has been incorporated into binding states ILO Rec. 203 on Forced Labor (2014)
agreements such as Bangladesh Accord, and Supply chain due diligence.
multi-stakeholder efforts like Better 28Key Elements (I). **Ensuring
Work. jurisdiction Member states’ courts shall
16Key provisions: (a) Brands commit to have jurisdiction to hear claims by supply
source from compliant factories for at chain workers against home state MNCs
least two years; (b) Brands include Defining duty “Member states shall hold
sufficient resources in contracts to fund MNCs to duties of reasonable care to
health/safety upgrading (c) Enforcement prevent (defined harms) to workers within
via arbitration, with awards enforceable their supply chains” OR: “Member states
in domestic courts. Other regime, shall ensure that MNCs establish
“Alliance,” also involves alleged transnational industrial relations systems
commitments to enable factory safety – but to cover supply chain workers”.
no contractual commitments. 29Key Elements (II). Defining harms:
17Unpacking the Norm. “Shared Pervasive & severe violation of core
responsibility” among: MNC & labor standards (Hyde 2012)? Unacceptable
supplier/employer Home states of MNC & forms of work? Failure to establish
supplier/employer Axes of “shared transnational bargaining? Defining
responsibility” Direct causation of a harm breach/defenses: Financial commitments
Benefit from a harm Special capacity to that enable labor standard compliance?
mitigate or eliminate harm Special Monitoring protocols? Safe harbor for use
connection to those who suffer the harm of ILO monitoring?
Key works: Iris Marion Young,
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