Refereed journal article or data article (A1)

Contract-Boundary-Spanning Governance Mechanisms: Conceptualizing Fragmented and Globalized Production as Collectively Governed Entities




List of AuthorsJaakko Salminen

PublisherIndiana University Press

Publication year2016

JournalIndiana Journal of Global Legal Studies

Volume number23

Issue number2

Start page709

End page742

eISSN1543-0367

Self-archived copy’s web addresshttps://research.utu.fi/converis/portal/detail/Publication/17074327?auxfun=?=en_GB


Abstract







Conceptualizing how private actors can and should control their
supply chains is a tricky question with both economic and legal
dimensions. The topic is of extreme importance in today’s global economy.
On the one hand, this importance is highlighted by events such as the
catastrophic and deadly collapse of the Rana Plaza factory building in
Bangladesh and the economic fiasco of the Olkiluoto 3 nuclear power plant
construction project in Finland, both arguably caused by the lack of
effective supply chain governance. On the other hand, the potential
benefits of successful supply chain governance, shown by examples such
as open book accounting in automotive manufacturing, provide another
perspective on the importance of focusing on supply chain governance. In
this paper, I provide a framework for conceptualizing supply chain
governance from a legal perspective. First, I combine the governance
analytics of global value chain theory with research into compliance
mechanisms and practical examples of contract boundary spanning
governance mechanisms. This provides a preliminary typology that helps
distinguish between adequate and inadequate governance mechanisms.
Second, in contractually organized supply chains, governance
mechanisms necessarily transgress contract boundaries and thus privity.
This leads me to refer to them as contract-boundary-spanning governance
mechanisms. To help conceptualize the requirements for attributing legal
normative effects to such mechanisms, I propose using Teubner’s factual framework for evaluating liability in contract networks. Combined
together, the typology and the framework provide a tool for evaluating and
discussing the appropriateness of liability in different factual situations.
This tool is not limited to any specific jurisdiction or doctrine and is thus
trans-substantive. It enables further comparison of the legal doctrines
available in different jurisdictions and transnationally for their potential
in establishing liability in different configurations of supply chain
governance.





 





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