LABOUR STANDARDS IN GLOBAL SUPPLY CHAINS

THE RELATIONSHIP BETWEEN DUE DILIGENCE AND LABOUR INSPECTORATES

Abstract

Global supply chains are a widespread phenomenon and responsible for the majority of current international trade. Although they may benefit companies, consumers and, to some extent, workers, they pose major challenges to labour rights. Recent workplace tragedies and deteriorating working conditions, which relate to the underlying rationale of global supply chains and to supply chain management techniques, have brought attention to the topic. Following a call from NGOs, consumers and states to lead firms to address the problems, private codes of conduct emerged as a possible solution. As a result of their failure, recent international and domestic extraterritorial regulation initiatives are trying to tackle labour issues in global supply chains, bringing due diligence processes to their heart. Although these regulatory initiatives are still in their infancy, they handle due diligence and the most traditional method for enforcing labour rights – labour inspectorates – at arm’s length. In this context, they suggest multinational enterprises assess local labour inspectorates while evaluating their risks. Demonstrating how this assessment is easier said than done, this article proposes a different interaction between businesses and labour inspectorates in the context of due diligence processes. This interaction could be beneficial for both labour inspectorates and firms, while bringing more effectiveness to the enforcement of labour law.