trends and future of sustainable development - TransEco

3.2. OverviewThe legal scholarship assigns to SCCs various roles. Lundblad (2005) discusses the objective of codes ofconducts to influence behavior of suppliers. He suggests that this objective may be achieved by inclusionof a code of conduct into a supply contract. The word to influence indicates two different aspects ofSCCs: an incentive for suppliers’ positive attitude towards CSR and an actual ability of contracts to affectsuppliers’ behavior.Vandenbergh (2007) provides deeper analysis of SCCs based on empirical data. He claims thatprivate contracts are an important means of global environmental governance. He discusses two of thegenerally recognized features of “governance” and compares them to the features of private contracting.One of them is the accountability of rule-takers. In the case of a private contract, unlike in agovernmental regulation, this accountability is missing. Nevertheless, another type is present –accountability to the companies’ stakeholders. This type of accountability is also referred to as the sociallicense to operate. The other discussed feature is the collaborative approach in governance (Albareda2008; Rasche 2010), meaning that a regulation, whether it is a government regulation or a transnationalprivate regulation, addresses common problems in group decision-making. This feature is generallyabsent in private contracts concluded merely between two private parties, but according to Vandenberghmay be present when private contracts incorporate collective standards. In my view, the collaborativeaspect is embedded into all SCCs, since companies thereby respond to a rather specific pressure of theirstakeholders who thus participate in shaping of the SCCs’ content.The governance ability of SCCs is discussed also by Backer (2007) who examines how Wal-Mart uses“contractual relationships to legislate behavior among its suppliers”. The word legislate indicates thatcontracts are used to create new rules, new law. Backer presents two ways how the legislative effects ofprivate contracts within the CSR issues may develop. Firstly, contractual provisions may evokedevelopment of international customary business law. This implies that the regulatory function wouldnot be embedded directly in the contracts but rather in a new set of rules evolved based on their content.Secondly, private contracts can be seen as a legislation of its own, setting new standards for Wal-Mart’ssuppliers. The legislative character of Wal-Mart’s contracts stems from the company’s economic power.Next to the legislative function, Backer also mentions other roles of private contracts in the CSRregulatory environment; the mission within the legal enforcement and the power to deploy businessrelationships by harmonizing values and norms of the parties.The enforcement role of SCCs is further developed by McBarnet and Kurkchiyan (2007). Based onempirical data obtained from interviews, case studies, and empirical desk research, they analyze theregulatory and enforcement potential of private contracts in enhancing global CSR. The regulatorypurpose of SCCs is described as rather low since it appears from the data that the majority of the issuescovered by contracts are already implemented by local laws, however, states fail to enforce them.Therefore, contracts are seen in the first place as an enforcement mechanism of standards set byinternational and local laws and corporate codes of conduct. The authors stress the significance of “soft”contracts (relational contracts) and their ability to, if not set new standards or enforce existing, motivatecompanies’ suppliers to adopt socially responsible behavior. Even though McBarnet and Kurkchiyanrecognize the importance of private contracts in a sustainable supply chain regulation, they also drawattention to their many limitations.376