Assessing Effectiveness of International Private Regulation in the CSR Arena
Richmond Journal of Global Law and Business, Vol. 13, issue 2 (2014)
113 Pages Posted: 29 May 2014 Last revised: 25 Jun 2014
Date Written: April 23, 2014
The rise of transnational private regulation in the corporate social responsibility (CSR) arena is incontrovertible, but it has advantages as well as obvious disadvantages. Therefore, it is of importance to assess whether transnational private regulation is effective. This is salient in the CSR arena because a plethora (of different types) of transnational private regulation exists. The recent examples in Bangladesh elucidate the ineffectiveness of (some) transnational private regulation (in supply chains) in the garment industry.
The effectiveness of private regulation in the CSR arena might be assessed by a legal, economic, sociological or psychological approach. The legal approach focuses on (the objectives of) the private regulation itself, enforcement and conflict resolution. The economic approach (impact assessment) focuses on the actual impact of private regulation in terms of economic benefits/growth, but also considers social, consumer and environmental detriment and possible market disruption or hamper of trade. The sociological approach is connected with acceptance (legitimacy) of private regulation and focuses on the way private regulation is communicated, the way in which it is implemented, whether proper procedures are used to engage relevant stakeholders and how the decision making process is shaped. The psychological approach considers the behavioral effects (if any) of private regulation.
In many instances, the more of these approaches point at effectiveness, the more likely it is that the transnational private regulation will be effective. Moreover, these approaches are intertwined.
The contribution outlines a methodology which adopts all these approaches and uses insights from all these disciplines to find ex ante indicators (to be used in the rule making process) predicting the effectiveness of transnational private regulation and to find instruments to assess the effectiveness of existing transnational private regulation (ex post). Some examples of such an integrated approach (however, more limited) already exist in the CSR Arena (regarding standards) but an overarching methodology (able to compare different types of private regulation) is still lacking.
Keywords: Effectiveness, private reglation, multi-disciplinary approach
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