The Global Value Chain, Networks & The New Possibilities Of Private Ordering

Abstract

 The concepts of networks and network failures offer a helpful lens through which we can better understand the contemporary global value chain (GVC) and resulting GVC regulation, particularly in the context of human rights abuses and environmental concerns. Modern legal forms often find it challenging to integrate these globally extended, network-like business and economic structures within the bounds of traditional legal models, paradigms, and structures. The resulting regulatory landscape is a complex mosaic of overlapping national and transnational, public and private, and hard and soft norms. This leads to a nebulous, interconnected array of legal and other risks for all stakeholders, particularly transnational corporations. As such, the GVC now operates in a regulatory environment characterized by extreme legal pluralism. Here, we revisit the question of whether choice-of-law rules in private international law should continue to exclude non-state and hybrid norms emerging in the specific context of GVC. Several considerations and a framework for this issue are introduced to stimulate further discussion. Our main suggestion is that a fixed, inflexible legal approach does not capture the complex, dynamic, and networked character of the GVC, especially the constantly evolving form of contemporary business organizations operating in the GVC. 

Keywords: Network, Legal Pluralism, Private Ordering, GVC, Global Value Chain, Private International Law, Choice of Law, Legal Risk, Compliance