Just Published: "Research Handbook on Transnational Corporations" (Alice de Jonge and Roman Tomasic, eds.)"

I am happy to report the publication of Research Handbook on Transnational Corporations (Alice de Jong and Roman Tomasic, eds., Edward Elgar 2017). Here is the official book description:

Transnational corporations (TNCs) have moved to the forefront of regulatory governance both within states and in the international arena. The Research Handbook on Transnational Corpora ons provides expert background commentary and up-to-date insights into regulatory frameworks impacting on TNCs at global, industry and national levels. Wri en by global experts in their field, this unique collection of essays provides in-depth understanding of how the forces of globalisation affect the world’s largest corporations, and how those corporations, in turn, shape globalisation.

Comprehensive yet highly accessible, this is the rst major work on the reciprocal impact of TNCs on regulatory processes. The Research Handbook provides guidance on how best to understand the rapidly evolving relationship between TNCs and the processes of treaty making, the forma on of global industry standards and the processes of national law making and policy forma on (with a focus on resource taxa on). Global, industry and national-level case studies are used to explain the basic principles used to support state, private, and international regulatory programs.

Delivering both theoretical and practical insights into the regulation of TNCs, this timely and authoritative Research Handbook will be of particular interest to policy makers, industry practitioners and lawyers. Students and academics will also find it to be an invaluable resource.

Contributors include: R. Anderson, M. Bowman, L. Catá Backer, A. Chou, A. De Jonge,G. Gilligan, D. Gleeson, M.A. Gonzalez-Perez, V. Harper Ho, J.A. Kirshner, D. Kraal, L. Leonard, R. Lopert, M.E. Monasterio, P. Neuwelt, J. O’Brien, A. Rühmkorf, R. Tomasic, M. Wörsdörfer

The Table of Contents follows, along with the Introduction to my contribution, The Evolving Relationship and Political Actors and Governments also follows.

Table of Contents:

__________

The evolving relationship between TNCs and political actors and governments

Larry Catá Backer[1]

ABSTARCT: This contribution considers the nature of the relationships among TNCs, political actors and government, as a set of emerging ecologies of political economy. Each represents a distinct response to the transformation of the global legal, economic and political order in the face of globalization. Each exists autonomously and is evolving simultaneously, yet each is significantly interconnected within a polycentric governance order that lends overall structure without a centering position. The chapter starts with the conventional and traditional ecology of relationships, centered on the state. It then considers the three most distinctive forms of emerging relational ecologies emerging that de-center the state. The first is based on the TNC as the centering element of production chain order. The second is grounded on the emergence of non-state governance centers which assert order through certification, verification, and monitoring. The third posits the emergence of a multi-stakeholder autonomous and self referencing system around production chains. The chapter briefly considers whether there is something like meta theory structuring this disaggregated and scattered by intermeshed systems that have arisen around the state. The examination ends with a brief suggestion of what may lie ahead.

INTRODUCTION

This chapter examines one of the most interesting, and most elusive, areas of transnational corporations (TNC) regulation, and operation– the evolving relationships among the great stakeholders of TNC governance: political actors and governments. It is a dynamic and political topic, built on the slippery foundation of shifting definitions and agendas that has marked the lurch from the 1970s state-based internationalism[2] to the modern polycentric governance logics of economic globalization,[3] though one that still exhibits a substantial amount of national characteristics.[4]

The dynamic element of these relationships can serve as a conceptual starting point. At the start of the third quarter of the last century, the issue of any relationship among TNCs, political actors and government might have occupied very little conceptual space. For the most part, TNCs and non-governmental organizations (NGOs) tended to focus their interactions through the state, and politics. Direct popular mobilizations were just starting in the most developed states – the lettuce (and then grape) boycott led by Cesar Chavez, among the most remarkable and culturally important at the time[5] – but even these were centered around politics and law.[6] The same appeared true in the evolution of popular mobilization in developing states.[7] At the same time the political power of large global enterprises was being exposed in ways that suggested the extent of their power to affect the domestic political and legal orders of developing states.[8]

By the first decades of the 21st century, states appeared to have retreated from either a leading or centering role in the organization of relationships among non-state actors, governments and TNCs.[9] For the most part, states retreated because they were unable or unwilling to change even as economic globalization grounded in the increasing porousness of borders globalized politics and the operations of economic and political actors, producing governance gaps within which domestic legal orders could not reach and within which multi-state harmonization proved difficult.[10] The new center of state or public intervention appeared to have moved upward to international organizations, and then downward into some states (when willing) or outward into the non-state sector.[11] But public intervention no longer monopolized all governance space. Into the void, new transnational systems of self-referencing relationships suggested themselves[12] as critical actors realigned their relationships to create a new regulatory space within which each played a new and important role.[13] Where states once always set the structure of debate and served as the arbiter of rules, TNCs and NGOs began to amplify relationships that became at once both cooperative and adversarial and where they appeared to embrace both monitoring and rule making objectives.[14] And both were increasingly seen as political actors in both transnational and national space, no longer merely objects of state control but now also partners in governance.[15]

Within the emerging political space created through the realignments of power brought by economic globalization, TNCs, NGOs, states and public international organizations have developed a political ecology grounded in their inter-relationships that drives a dynamic political process beyond the state. The interactions of these actors suggest the richness of the ecology of TNC relationships with governments and NGOs, one in which each of the actors are sometimes locked in a series of adverse or cooperative relationships, and sometimes simultaneously in both. The object of the relationship is accountability on one side and risk management on the other.[16] The ideology of this ecology is not fixed and ranges from the notion that each of these actors must remain adverse if the ‘system’ is to produce welfare maximizing results, to notions that deep networks of collective action produce comprehensive systemic coherence.[17] Moreover, the role of each actor within this ecology also remains contested. The overall ideological framework within which these relations are framed also colors the view of these relationships. Three principal variations have proven of enduring importance as conceptual blinders which frame much of the academic, policy and political discourse: neoliberal, statist and production chain.[18]

Actors and ecology in motion suggest the spatial element of the relationships among the principal actors. But the temporal element is important as well. The 1970s, the apex of state ideology, focused on domestic regulation. From the 1980s through the turn of the century was an age of deregulation and competition among states for positions within global production chains. This retreat from the normative project of regulation was filled by NGOs and international organizations, and to some extent by TNCs themselves, in multiple and complex systems that have come to dominate relations among these actors.[19] And indeed, this century is marked by a relationship between TNCs and political actors that underlines the extent to TNCs now view as important the normative legitimacy of NGOs,[20] and in which NGOs view TNCs as sources and objects of governance power.[21] But it is marked by something else, especially outside of the Anglo-American world – the emergence of an increasingly influential view that TNCs, like state organs, have an obligation to realize social norms through their own operations.[22] In other words, that enterprises (and perhaps other political actors – governments and NGOs) have an obligation to act only in ways that are supportive of social norms.[23] Whether social norms might best be enforced through law remains highly contested.

This chapter, then, considers the nature of the relationships among TNCs, political actors and government, as a set of emerging ecologies of political economy. Each represents a distinct response to the transformation of the global legal, economic and political order in the face of globalization. Each exists autonomously and is evolving simultaneously, yet each is significantly interconnected within a polycentric governance order that lends overall structure without a centering position. The chapter starts with the conventional and traditional ecology of relationships, centered on the state. It then considers the three most distinctive forms of emerging relational ecologies that de-center the state. The first is based on the TNC as the centering element of the production chain order. The second is grounded on the emergence of non-state governance centers which assert order through certification, verification, and monitoring. The third posits the emergence of a multi-stakeholder autonomous and self-referencing system around production chains. The chapter briefly considers whether there is something like meta theory useful for the understanding of these otherwise disaggregated and scattered but intermeshed systems that have arisen around the state. The chapter ends with a brief suggestion of what may lie ahead.


NOTES

[1] My great thanks to my research assistant Angelo Mancini (Penn State Law JD expected 2017) for his superlative work on this chapter.


[2] See, e.g., Tagi Sagafi-nejad, The UN and Transnational Corporations: From Code of Conduct to Global Compact (Indiana University Press, 2008) 41–88.


[3] See, e.g., John G. Ruggie, Just Business: Multinational Corporations and Human Rights (W.W. Norton, 2013).


[4] See, e.g., Dennis Paterson and Ari Afilalo, The New Global Trading Order: The Evolving State and the Future of Trade (Cambridge UP, 2008).


[5] See, e.g., United Farm Workers, History <http://ufw.org/_page.php?menu=research&inc=_page.php?menu=research&inc=history/01.html>; ‘Farm Workers Press Lettuce Boycott,’ Harvard Crimson (13 November 1970) <http://www.thecrimson.com/article/1970/11/13/farm-workers-press-lettuce-boycott-ppicketing/>.


[6] In the case of the lettuce boycott, the right of the United Farm Workers to unionize lettuce pickers in the Salinas Valley agricultural district of California.


[7] S. Prakash Sethi, Multinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestle and the Infant Formula Controversy (Kluwer Academic Publishers, 1994).


[8] See, e.g., Daniel Litvin, Empires of Profit: Commerce, Conquest and Corporate Responsibility (Texere, 2003).


[9] See, e.g., Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge UP, 1996).


[10] Considered in some aspects in Robert O. Keohane, ‘Global Governance and Democratic Accountability’, in David Held and Mathias Koenig-Archibugi (eds), Taming Globalization: Frontiers of Governance (Polity Press, 2003) 130–157.


[11] Discussed in Larry Catá Backer, ‘The Structural Characteristics of Global Law for the 21st Century: Fracture, Fluidity, Permeability and Polycentricity’ (2012) 17 (2) Tilburg Law Review 177–199.


[12] Discussed in Larry Catá Backer, ‘Economic Globalization and the Rise of Efficient Systems of Global Private Law Making: Wal-Mart as Global Legislator’ (2007) 39 (4) University of Connecticut Law Review 1739–1784 .


[13] See, e.g., Dorothea Bauer, NGOs as Legitimate Partners of Corporations: A Political Conceptualization (Springer, 2011).


[14] See, e.g., Mariëtte van Huijstee and Pieter Glasbergen, ‘NGOs Moving Business: An Analysis of Contrasting Strategies’ Business Society (11 May 2010) 591–618.


[15] ‘Path breaking in the mid-1990s, strategic long-term collaborations among government, business, and civil society actors in the pursuit of common objectives are today a staple of the emerging global community.’ William S. Reese, Cathryn L. Thorup and Timothy K. Gerson, What Works in Public/Private Partnering: Building Alliances for Youth Development (International Youth Foundation, 2002) 6.


[16] See, e.g., Matias Koenig-Archibugi, ‘Transnational Corporations and Public Accountability’ (2004) 32 (2) Government and Opposition 234–259.


[17] Cf. Patti Rundall, ‘Partnerships With TNCs – An Attempt to Compartmentalise Ethics?’ and Anita Roddick, ‘A Different Bottom Line,’ (2000) both part of World Vision UK Discussion Papers No. 10: Buy In or Sell Out? Understanding business-NGO partnerships <http://archive.babymilkaction.org/pdfs/spinpdfs/appendices/buyinsellout.pdf>‘’.


[18] See, e.g., Larry Catá Backer, ‘Economic Globalization Ascendant: Four Perspectives on the Emerging Ideology of the State in the New Global Order’ (2006) 17 (1) Berkeley La Raza Law Journal 141–168. Discussed at Part 2, infra.


[19] See, e.g., Judith Richter, Holding Corporations Accountable: Corporate Conduct, International Codes and Citizen Action (Zed Books, 2001).


[20] See, e.g., Shelly L. Brickson, ‘Organizational identity orientation: The genesis of the role of the firm and distinct forms of social value’ (2007) 32 Academy of Management Review 864 and discussed in Bauer (n 13).


[21] See, e.g., Larry Catá Backer, ‘Multinational Corporations as Objects and Sources of Transnational Regulation’ (2008) 14 ILSA Journal of International & Comparative Law 499–523.


[22] See Peter Ulrich, Integrative Economic Ethics: Foundations of a Civilized Market Economy (James Fearns, trans., Cambridge UP, 2008) 269 et seq.


[23] Cf. Jürgen Habermas, The Theory of Communicative Action, Vol. II Lifeworld and System: A Critique of Functionalist Reason (Thomas McCarthy, trans., Beacon Press, 1987); see also Habermas, Vol. 1 Reason and the Rationalization of Society (Thomas McCarthy, trans., Beacon Press, 1984).