Networked Regulation as a Solution to Human Rights Abuse in Global Supply Chains? The Case of Trade Union Rights Violations by Indonesian Sports Shoe Manufacturers

Abstract

This article analyses the capacity of global non-state networks of civil society actors to effectively supplement weak state regulation in reducing human rights abuse by multi-national companies (MNCs). The effectiveness of NGOs used as part of a network of control finds support both in the radical criminological literature as well as those explicitly advocating for a networked regulatory approach. This case study of the Indonesian sport shoe industry demonstrates that networked regulation has had a positive short to medium-term impact on respect for trade union rights among some manufacturers producing for Western MNCs, but inconsistent approaches by the MNCs and ongoing resistance by the manufacturers has made this influence difficult to sustain. Critically, the Indonesian state emerges as a powerful and primarily — but far from completely — complicit set of actors: applying criminal sanctions for trade union rights violations but failing to enforce them, and influencing networked regulation in complex, contingent ways. Our cases suggest both that advocates and practitioners of networked regulation need to find more effective ways to respond to the corporate drive to maximize profit and that networked regulation’s long-term usefulness will likely depend on the extent to which it draws from and operates to strengthen progressive regulatory elements within Asian states.

Keywords: networked regulation, multi-stakeholder initiatives, employment law, corporate social responsibility, trade union rights, Asian criminology, supply chain, Indonesia, sweatshops, workers rights, labor rights, Nike, Adidas, Reebok

JEL Classification: J51, J52, J71, K31, M14