Private Regulation: Indispensable for Responsible Corporate Conduct in a Globalizing World?
Bocconi School of Law Student-Edited Papers, No. 2009-06/EN
LAW & GLOBALIZATION, Bocconi School of Law Student-Edited Papers, ed., VDM Publishing, 2009
Posted: 23 Aug 2009
Date Written: August 22, 2009
Is private regulation proven to be generally more successful than public regulation in controlling the transnational conduct of multinational companies? The exponential growth of private regulations aimed at influencing corporate behaviour - as a result of the fast global market expansion – shows the full relevance of posing this question. In the light of existing international private standards, this article defines and analyzes certain major elements of private regulation, that may impact the compliance with private regulation, namely: quality; legitimacy; enforcement; and effectiveness. The authors apply these elements to three private regulatory initiatives that have been referred to by the European Parliament as private regulation that has reached a certain level of maturity: the Global Compact Principles, the OECD Guidelines and the GRI Guidelines. In assessing the characteristics of these private sets of norms, they observe some interesting references to the privately developed norms by current public regulation in the field of corporate responsibility as well as links with the enforcement of norms in the 'normal' legal arena. The question emerges whether the development of private norms strengthens or weakens public regulatory systems. Moreover, lessons learned from the recent financial crisis pose the question whether vital matters should be entrusted to private actors to be regulated.
Keywords: private regulation, private regulatory regimes, self-regulation, co-regulation, alternative regulation, codes of conduct, CSR, Corporate Social Responsibility, compliance, GRI Guidelines, OECD MNE Guidelines, Global Compact Principles, Bocconi Legal Papers
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