Codes of Conduct as Private Legal Transplant: The Case of European Extractive MNEs

• Published date: 01 November 2013
• Date: 01 November 2013
• DOI: http://doi.org/10.1111/eulj.12066
• Author: Tomaso Ferrando

Codes of Conduct as Private Legal

Transplant: The Case of European

Extractive MNEs

Tomaso Ferrando*

Abstract: Corporate social responsibility is a dynamic area that cuts across a multitude

of disciplines. This paper combines the notion of Corporate Social Responsibility (CSR)

with the theory of legal transplant, and claims that Codes of Conduct can be interpreted

as proxies of unilateral legal dissemination throughout the entrepreneurial network. By

using as example four European extractive Multinational Enterprises (MNEs) (ENI

SpA., Total S.A., Repsol YPF, British Petroleum), the article analyses the content of

the Codes, the mechanisms and spaces of circulation, and asks questions like whether

they are stretching European Union law beyond its traditional boundaries. Exposed to

the legal and political relevance of MNEs, the reader is confronted with a global

framework characterised by increased complexity, the continuous redefinition of internal

and external spaces, deep inconsistencies and unexpressed potential. Therefore, the

recognition of the current theoretical weaknesses becomes a fundamental step to criti-

cally engage with the production of new legal territories.

I Introduction

Only few months ago, the case of the labour conditions provided by Foxxcon, the

main contract manufacturer for multinational electronic producers such as Apple

and HP, was reported by the principal global media. Twelve-hour shifts, low

salaries, harsh life conditions, an unprecedented number of suicides and other

violations of what are generally considered to be the basic work conditions were

denounced and exposed as the product of global delocalisation. A remedy was

urgently required. Only a few days after, Foxxcon and Apple declared that the Fair

Labor Association was contracted as external consultant and that its Workplace

Code of Conduct (CoC) be implemented. The decision immediately produced a

unanimous wave of satisfaction, mainly based on the idea that Western-shaped

* PhD Candidate, Sciences Po Law School, Paris. Visiting Researcher at the Public Law Department,

University of Cape Town (UCT), South Africa. Visiting Researcher at the Commercial Law Depart-

ment, Universidade de Sao Paulo (USP), Brazil. MSc in Comparative Law, Economics and Finance

from the International University College of Turin (Italy), and an LLM and LLB from the University

of Turin (Italy). Contact: tomaso.ferrando@sciences-po.org. Paper presented at the 9th International

Workshop for Young Scholars, Peking University, Shenzen, China. The author is thankful to Huizen

Chen and Eldar Haber for their insightful comments.

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European Law Journal, Vol. 19, No. 6, November 2013, pp. 799–821.

© 2013 John Wiley & Sons Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK

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labour principles and rules produce an automatic improvement in the standards and

working conditions.1

The implementation of a strong system of corporate social responsibility (CSR) was

advertised as the most efficient way to solve problems such as the lack of enforcement

and low legal standards. The case certainly represented the apotheosis for the sup-

porters of private self-discipline and of the need for cooperation between public and

private actors in shaping future legal orders. However, the uncritical acceptance of an

exogenous source of regulation and discipline come with no consideration of the

circumstance that it would imply the integration (or replacement) of the existing legal

framework with a juridical and disciplinary framework produced by an international

non-governmental organisation (NGO), and more precisely by a USA-based organi-

sation whose board of directors is formed by representatives of enterprises, universi-

ties and other NGOs, and not by workers nor members of the local communities.2

This paper aims at raising awareness and consciousness around this critical aspect of

CSR and to expose the legal complexity that lurks behind this area, along with its

potential hegemonic impact.

From a historical perspective, the last two decades have witnessed increased interest

in the notion of CSR. Originally stimulated by NGOs and multinational enterprises

(MNEs), it is now discussed in several disciplines, including business administration,

ethic and behavioural theory, psychology and law. Then, starting in the 1990s, when

consumer groups, human rights organisations and social movements turned to MNEs

as primarily responsible for the exploitation and impoverishment of peripheral coun-

tries, the notion of CSR started to be invoked in order to convey their normative

expectations.

Having slowly lost its nature as a counter-globalisation remedy, the term has been

gradually accepted by MNEs and their former opponents, praised for its capacity to

internalise the notion of responsibility and to transform enterprises and other

non-state entities into private social and environmental regulators (of themselves

and of others).3However, as soon as we adopt a critical legal perspective, we have

1Reuters, ‘Auditors Find Improved Working Conditions at an Apple Supplier’, (2012) The New York

Times, 22 August 2012, par Technology, available at http://www.nytimes.com/2012/08/23/technology/

23iht-apple23.html (last visited 13 September 2012).

2The choice of the Fair Labor Association raises a plurality of questions, not only related to its legiti-

macy. Why Apple and Foxxcon chose a US-based NGO rather than to apply the US standards? Why did

not they extended the content of ILO Conventions? Will the change of legal framework enough,

even without the provision of a system of accountability that can be triggered by workers and third

parties (such as local and international NGOs)? An answer to these questions could come from Blair and

Palpacuer’s reading of the history of the antisweatshop movement in USA. The authors underline that

the struggle that took place when the FLA was created after a President Clinton’s initiative as a second

generation association originating from the Apparel Industry Partnership. According to them, it was

only in ‘November 1998 that a final agreement, including a framework for monitoring the new code, was

announced. However, this agreement was not reached with the participation of all the original members

of the AIP: a group that included both unions and one of the participating NGOs had been absent

from the last stage of discussions, after criticizing what they considered to be the private sector’s

excessive influence over the emerging instrument’. Jennifer Blair and Florence Palpacuer, ‘From Varie-

ties of Capitalism to Varieties of Activism: The Antisweatshop Movement in Comparative Perspective’,

Social Problems, Vol. 59, No. 4, pp. 522–543. Source: Fair Labor Association webpage, available from

http://www.fairlabor.org/about-us/board-directors [last accessed August 2nd, 2012].

3cf L. Eslava, ‘Corporate Social Responsibility & Development: A Knot of Disempowerment’, (2008) 2(2)

Sortuz: Oñati Journal of Emergent Socio-Legal Studies 43–71, available at http://ssrn.com/paper=1524544

(last visited 17 September 2012); R. Shamir, ‘Capitalism, Governance, and Authority: The Case of

European Law Journal Volume 19

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