ABSTRACT
This chapter discusses the increasing legal regulation of human rights standards by the home states of transnational corporations. It starts with a review of the regulatory challenges that business models based on global production networks with subsidiaries and suppliers pose for company law as the law of business organisations. The chapter then assesses how decentralised business structures with subsidiary companies and independent suppliers constitute challenges for holding the transnational corporation liable in tort law. This is followed by a discussion of the ways how, in recent years, so-called home state laws have addressed human rights issues in global supply chains. It is argued that the existing home state laws, which are primarily reporting duties, only have a limited effect on improving human rights standards across global production. The chapter then examines the opportunities of and limitations for mandatory human rights due diligence laws, which are a new form of supply chain governance that is currently discussed in several European countries.
It is argued that, although mandatory human rights due diligence can reach deep into the chain and although it can be linked with civil (tort) liability, it still needs to interact with other regulatory tools as part of a ‘multifaceted approach’ in order to govern the networks underlying global supply chains. The developing legal framework in this area has the potential to contribute to closing the governance gap, but the closing of it is a combined effect of different pieces of legislation and their interaction with each other. Mandatory human rights due diligence laws can play an important part in the puzzle that is the reconceptualization of corporations within supply chain networks.
