Sustainability clauses in international business contracts / Kateřina Peterková Mitkidis.
2015
K1030 .M58 2015 (Map It)
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Details
Title
Sustainability clauses in international business contracts / Kateřina Peterková Mitkidis.
Published
The Hague, The Netherlands : Eleven International Publishing, [2015]
Distributed
Portland, OR, USA : International Specialized Book Services
Copyright
©2015
Call Number
K1030 .M58 2015
ISBN
9789462364813
9462364818
9789462741553 (E-book)
9462364818
9789462741553 (E-book)
Description
xi, 344 pages : illustrations ; 25 cm.
System Control No.
(OCoLC)887852192
Summary
"Sustainable development is a globally recognized goal. However, governments are failing to reach agreement on how this should be achieved. Private actors that are under stakeholders' pressure try to fill this regulatory gap by developing various types of transnational private regulation. However, transnational private regulation suffers from weak legitimacy, questionable effectiveness, and lack of credible enforcement. This book suggests that supply chain contracting may offer an alternative regulation that could lead away from the current regulatory impasse, or at least be one of the missing pieces in the puzzle. Despite the traditionally primary goal of business - to make a profit - companies are, under the imperative of corporate social responsibility (CSR), engaging in activities pursuing public goals in the social and environmental spheres. The book examines one of the tools developed to implement CSR into the business operations: social and environmental clauses in international supply chain contracts ("sustainability contractual clauses," SCCs). Since there is a lack of literature and regulation on this topic, companies use SCCs without proper knowledge or guidance on why and how this should be done, and on what legal consequences this may have. The book fills this gap by discussing the use of the legal instrument of contract to pursue social and environmental goals; analyzing the legal framework of sustainability contractual clauses; examining what legal effects SCCs may have; and evaluating the contribution of this activity in terms of achieving sustainable development objectives. The aim is to explore both the potential and the limitations of contractual governance in achieving global sustainability and thus contribute to the current discussion on the development of new regulatory and governance designs in this area"--Back cover.
Bibliography, etc. Note
Includes bibliographical references (pages 313-342).
Series
Record Appears in
Table of Contents
Acknowledgments
xi
pt. I
Research topic and design
1.
Introduction
3
1.1.
Background
4
1.2.
Hypothesis development
9
1.2.1.
Lack of transnational governmental regulation for sustainable development
9
1.2.2.
Deficiencies of transnational private regulation
10
1.2.3.
Growing regulatory power of multinational enterprises
12
1.2.4.
Widespread use of sustainability contractual clauses
13
1.2.5.
Enforceability of international supply contracts through existing framework of international contract law
14
1.3.
Key concepts
17
1.3.1.
Sustainability, sustainable development, and CSR
17
1.3.2.
International and transnational law
21
1.3.3.
Regulation and governance
22
1.3.4.
International supply chain contracts
23
1.3.5.
Effectiveness
25
1.4.
Relevance
27
1.5.
Delimitations
30
2.
Research design
33
2.1.
Theoretical approach
34
2.1.1.
Research attitude: Critical thinking
35
2.1.2.
Jurisprudence: New legal realism
35
2.1.3.
Theorizing the global legal system: Legal pluralism
39
2.1.3.1.
Public/private divide
40
2.1.3.2.
Soft/hard law
44
2.1.3.3.
Conclusion on legal pluralism
47
2.2.
Sources of law
48
2.2.1.
Public
51
2.2.1.1.
International treaties with direct effects on private subjects
51
2.2.1.2.
International soft law
52
2.2.1.3.
National and supranational legislation with extraterritorial effects
52
2.2.1.
A National and supranational soft law
53
2.2.2.
Public-private
53
2.2.2.1.
Public-private agreements
53
2.2.2.2.
Public-private initiatives (standardization, certification)
54
2.2.3.
Private
55
2.2.3.1.
Industrial codes of conduct
56
2.2.3.2.
Business-driven cross-sector initiatives
56
2.2.3.3.
International Framework Agreements
57
2.2.3.4.
Corporate codes of conduct
57
2.3.
Methodology
58
2.3.1.
Theoretical research
59
2.3.2.
Empirical research
61
2.3.2.1.
Exploratory study
61
2.3.2.2.
Law in action
62
pt. II
Sustainability Contractual Clauses
3.
SCCs' definition
67
3.1.
Examples
67
3.2.
Defining features
74
3.3.
Distinction from other contractual content
76
3.3.1.
Active and passive clauses
76
3.3.2.
Placement within contractual text
77
3.3.2.1.
Case study
79
3.3.3.
Discussion
82
4.
Do sustainability clauses fit the contract paradigm?
85
4.1.
General theories of contract
85
4.1.1.
Will (promise) theories
86
4.1.2.
Reliance theories
90
4.1.3.
Transfer theories
91
4.1.4.
Law and economics
92
4.2.
Contract paradigm shift and modern contract law theories
93
4.2.1.
Relational contracts
93
4.2.2.
Hybridization of contracts
95
4.2.3.
Regulatory contracts
97
4.3.
Conclusion on contract theories
99
5.
Literature review
101
5.1.
Overview of fundamental literature
103
5.1.1.
Legal and contractual aspects of codes of conduct
103
5.1.2.
Contract law perspective
104
5.1.3.
Functional approach
105
5.1.4.
Best practice
109
5.1.5.
Juridical tool
110
5.2.
Some reflections on the literature review
111
pt. III
Regulation of Sustainability Contractual Clauses
6.
Legal framework
115
6.1.
Contract law
116
6.1.1.
The 1980 United Nations Convention on Contracts for the International Sale of Goods
116
6.1.2.
UNIDROIT Principles of International Commercial Contracts
117
6.1.3.
Principles of European Contract Law
118
6.1.4.
Common European Sales Law
119
6.2.
CSR regulation
120
6.2.1.
UN Human Rights Council
120
6.2.1.1.
Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights
121
6.2.1.2.
"Protect, Respect and Remedy" Framework and the Guiding Principles
123
6.2.2.
OECD Guidelines
129
6.2.3.
UN Global Compact
132
6.2.4.
ISO 26000
136
6.2.5.
EU: A renewed strategy for corporate social responsibility
140
6.2.6.
California Transparency in Supply Chains Act of 2010
142
6.2.7.
International Framework Agreements
143
6.2.8.
Multi-party business-driven initiatives
145
6.2.9.
Multi-party business agreements
147
6.3.
Conclusion on legal framework
151
7.
Sustainability clauses' anatomy
153
7.1.
Form
153
7.1.1.
Express provisions and incorporation by reference
155
7.1.1.1.
Reference to CSR documents
157
7.1.1.2.
Suppliers' awareness of CSR documents
161
7.1.2.
Implied provisions
163
7.2.
Content
166
7.2.1.
Topic
166
7.2.2.
Implied terms
171
7.2.3.
Disconnectedness from the contract subject matter
172
7.2.4.
Specificity
175
7.2.4.1.
Examples
176
7.2.4.2.
Reasons influencing specificity
178
7.2.4.3.
Implications under international contract law
181
7.2.4.4.
Conclusion on specificity
187
7.3.
Scope
187
7.3.1.
Enforcement of SCCs by third parties
190
7.3.1.1.
False advertising
190
7.3.1.2.
Unilateral promises
194
7.3.1.3.
Third-party beneficiaries
196
7.3.1.4.
Conclusion on SCCs' enforcement by third parties
200
7.3.2.
Extension of SCCs beyond first-tier suppliers
200
7.3.2.1.
Express and implied warranties
201
7.3.2.2.
Best practice
203
7.4.
Performance management/enforcement
207
7.4.1.
Monitoring
210
7.4.1.1.
Suppliers' self-assessment
212
7.4.1.2.
Auditing
213
7.4.2.
Remedies
216
7.4.2.1.
Relational enforcement tools
218
7.4.2.2.
Contract termination
221
7.4.2.3.
Damages
226
7.4.3.
Conclusion on performance management/enforcement
231
7.5.
Conclusion on sustainability clauses' anatomy
232
pt. IV
Regulation through Sustainability Contractual Clauses
8.
Legalization of CSR/hardening soft CSR regulation
237
8.1.
Obligation
239
8.1.1.
Hardening obligation through formalization
242
8.1.1.1.
Signaling commitment
243
8.1.1.2.
Internalization of agreed values
245
8.1.1.3.
Moral obligation
245
8.1.1.4.
Navigation through regulatory system categories
246
8.1.1.5.
Summary
247
8.1.2.
Hardening obligation through standardization
248
8.1.2.1.
Global best practice
248
8.1.2.2.
Trade usage
250
8.1.2.3.
Expressive function of contracts
251
8.1.2.4.
Summary
254
8.1.3.
Hardening obligation through legal transplants
254
8.1.3.1.
Summary
256
8.2.
Precision
256
8.3.
Delegation
260
8.4.
Conclusion on legalization of CSR/hardening soft CSR regulation
262
9.
Assessing effectiveness of SCCs as a transnational regulatory tool
265
9.1.
Tractability of suppliers' sustainable performance
267
9.2.
SCCs' attributes moderating effectiveness
270
9.3.
SCCs' effectiveness
272
pt. V
Final conclusions
10.
Synopsis, conclusions, and future prospects
279
10.1.
Synopsis of undertaken research
279
10.2.
Conclusions
281
10.3.
Recommendations and future prospects
285
Appendix Annexes
289
References
313
List of graphs and figures
343