Regulating the Multinational Enterprise as Entity, as a Network of Links and as a Process of Production

22 Pages Posted: 1 Mar 2018

See all articles by Larry Catá Backer

Larry Catá Backer

Pennsylvania State University, Penn State Law

Date Written: February 20, 2018

Abstract

Since the 1970s there has been an explosion of regulatory efforts that have arisen, both within and beyond law, the object of which is to manage MNEs. The MNE itself has also exploded as body on which law can be imposed. It very much retains its identity as an object ("the enterprise") of regulation and management. But it has increasingly also been understood as a conduit-a convenient intangible aggregation of the nexus points that together define the arc of its operation, or even as the framework within which global production is coordinated (and with it risk allocated and the distribution of value added is directed). It is to a consideration of those changes as well as the strong underlying lines of continuity that this short essay will focus. Section 2 considers traditional approaches to the regulation of MNEs and its problems. These sketch out the evolution of law as a means to construct and then regulate the MNE as an entity, and to manage the linkages and connections through which the MNE is constructed. Section 3 then exams emerging regulatory forms beyond the state and its domestic legal orders. The emerging techniques suggest both the evolution of law and its detachment form the state-that is, this evolution suggests the character of the transnational in regulation of which law (in its traditional sense) remains a part but no longer at the center of the regulatory project. Section 4 then briefly considers the character of the object of regulation. Some elements of transnational regulatory structures appear to be moving from the objectification of the MNE as an entity and the management of its form through interventions in its linkages and connections, to the management of the production process which is itself the object of MNE function. In the MNE one encounters entity, connections and linkages, and functionally differentiated production chains. Each aspect of the MNE is partially and simultaneously by layers of regulatory governance, the effectiveness of which is limited to that portion of the "idea" of the MNE to which it attaches. Understanding its form and structure-and its use-may drive truly transformative change. This reconsideration of the character of the MNE then may have a substantial effect on the way in which transnational law is understood and applied, that is that transnational law produces polycentricity in governance but that its object also acquires a polycentric character that shapes its amenability to regulation by law.

Keywords: multinational corporations, transnational law, transnational corporations, international law, veil piercing, corporate social responsibility, supply chains, OECD, human rights due diligence, disclosure, Modern Slavery, French supoply chain due diligence

JEL Classification: L53, M14, K22, K33, K42, O19, O22

Suggested Citation

Backer, Larry Catá, Regulating the Multinational Enterprise as Entity, as a Network of Links and as a Process of Production (February 20, 2018). Available at SSRN: https://ssrn.com/abstract=3126866 or http://dx.doi.org/10.2139/ssrn.3126866

Larry Catá Backer (Contact Author)

Pennsylvania State University, Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

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