The Stewardship of Trust in the Global Value Chain
62 Pages Posted: 1 Feb 2015 Last revised: 22 Jun 2017
Date Written: January 28, 2015
Global governance has not yet caught up with the globalization of business. As a result, our headlines provide daily accounts of the extent and consequences of these “governance gaps.” The ability of corporations to evade state control has also contributed to an unusual, even frightening, phenomenon: corporations are governing like states. Some public governance functions traditionally delivered by state actors are now increasingly undertaken by transnational corporate actors. One area that is experiencing this substitution is dispute resolution of human rights. Corporations and other business enterprises, individually or collectively, are creating a variety of grievance mechanisms to address human rights and other conflicts associated – even caused – by their business activities.
When these roles are fulfilled by state actors, we rely on procedural fairness to guide, even discipline, decision-makers. Procedural fairness improves our faith in decision-makers and their institutions even if we might disagree with the outcomes reached. What does procedural fairness mean when it is undertaken by a corporation in relation to quasi-public governance? What factors might improve its disciplining potential on decision-makers and increase the likelihood that the watching public, local and global, might accept the outcomes reached? This Article addresses this challenge by developing a framework for procedural fairness that is based upon human rights research and contract law. The result is a strategy for trust-building that can improve the quality of governance performed by the transnational business sector.
Keywords: global supply chains, global governance, corporations, private regulation, human rights
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