Corporate accountability in global supply chains? The effectiveness of human rights and environmental due diligence regulations

The European Union (EU), as the largest trading bloc in the world, imports large quantities of products from countries of the Global South each year. It is not uncommon for these products to be associated with serious violations of human rights and environmental degradation, such as child labor, destruction of tropical forests, land rights violations and environmental pollution. The risk is particularly heightened when companies operate in countries with poor governance and repression of advocacy groups. 

Since the 1990s, many well-known companies have developed and used various voluntary sustainability standards. However, there is now a growing criticism, particularly in civil society and politics, but also in the corporate sector, that voluntary corporate initiatives alone are insufficient to ensure sustainable global trade. In recent years, European states have therefore enacted laws prohibiting the import of products that have serious adverse impacts on human rights and the environment. These regulations enable states to hold corporations accountable for serious problems arising in the production process.

Human rights and environmental due diligence laws have been highlighted as a potentially effective tool for states to regulate global trade. These laws build on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. They require companies to implement a due diligence process to identify, assess, and manage their risks and negative impacts on human rights and the environment.

Countries like France, Norway and Germany have already enacted laws, and the EU has passed supply chain regulations based on a human rights and environmental due diligence approach (e.g., the European Union Deforestation Regulation and the Corporate Sustainability Due Diligence Directive). As a result, all enterprises operating in EU markets will soon need to comply with these requirements. Due diligence laws have been hailed as a milestone in promoting more sustainable global trade. Non-compliant companies now face lawsuits, fines, and reputational damage, driven by civil society campaigns, state supervision and investor pressures. However, the effectiveness of newly adopted laws and policies can also be undermined by practices such as symbolic compliance and a tactical rearrangement of supply chains by companies or by weak enforceability measures. Yet, there is little research on the practical consequences of these law in terms of enhancing corporate accountability across borders. 

Against this background, the project asks: 

1. To what extent and how do companies comply with HREDD regulations?
2. What are the patterns of public-private interaction, and how do these interactions influence implementation processes? 
3. How do different accountability mechanisms embodied in public policies operate, and what are their consequences for the effectiveness of HREDD regulations?
4. To what extent do supply chain characteristics and domestic context conditions in producing sites explain variation in the effectiveness of HREDD regulations?

To address these questions, the project employs a mixed-methods design, combining document analysis, semi-structured interviews, comparative case studies, network analysis, and survey methods. Altogether, the project enables a better understanding of how states can govern complex global supply chains more effectively.