Upstream Corporate Social Responsibility: The Evolution from Contract Responsibility to Full Producer Responsibility

Abstract

The debate about the appropriate standards for upstream corporate social responsibility (CSR) of multinational corporations (MNCs) has been on the public and academic agenda for some three decades. The debate originally focused narrowly on "contract responsibility" of MNCs for monitoring of upstream contractors for "sweatshop" working conditions violating employee rights. The authors argue that the MNC upstream responsibility debate has shifted qualitatively over time to "full producer responsibility" involving an expansion from "contract responsibility" in three distinct dimensions. First, there is an expansion of scope from working conditions to human rights and social and environmental impacts broadly defined. Second, there is expansion in depth of this broader responsibility to the whole upstream supply chain without regard to contracting status. Upstream responsibility now includes all suppliers, including direct contractors and the chain of suppliers to such contractors. Finally, the change in CSR scope and depth has led to an evolution of CSR management practice.

Keywords: sweatshops, human rights, corporate social responsibility, sphere of influence

JEL Classification: M14