Law and Responsible Supply Chain Management Corporate social responsibility (CSR) has for long been on the agenda in the businessworldandrecently,ithasalsobecomeapoliticalagendaintheEuropean Union.Focusingoninternationalsupplychainsandtheir controlbasedonstudies of law in several European jurisdictions, this book aims to advance the discussion on the application and enforcement of CSR. Drawing parallels to US and Cana- dian law, the book explores to what extent private law tools can be used as an enforcement device and it ultimately asks if what we are witnessing is the forma- tion of a new area of law, employing the interplay of contract and tort – a law of “production liability”, as a corollary of the concept of “product liability”. Vibe Ulfbeck is a professor of private law at the Law Faculty at the University of Copenhagen. Alexandra Andhov (JUDr., LL.M., S.J.D.) is an assistant professor of corporate law at the University of Copenhagen, Faculty of Law. Katerˇina Mitkidis is an associate professor at the Department of Law, Aarhus University. Routledge Research in Corporate Law Available titles in this series include: Legal Approaches and Corporate Social Responsibility Towards a Llewellyn’s Law-Jobs Approach Adaeze Okoye Disqualification of Company Directors A Comparative Analysis of the Law in the UK, Australia, South Africa, the US and Germany Edited by Jean Jacques du Plessis and Jeanne Nel de Koker Beyond Shareholder Wealth Maximisation Towards a More Suitable Corporate Objective for Chinese Companies Min Yan Corporate Law and Financial Instability Andreas Kokkinis Behavioural Risks in Corporate Governance Regulatory Intervention as a Risk Management Mechanism Ngozi Vivian Okoye Indonesian Company Law Soonpeel Edgar Chang Regulation and Inequality at Work Isolation and Inequality Beyond the Regulation of Labour Vanisha Sukdeo Regulation and the Credit Rating Agencies Restraining Ancillary Services Daniel Cash Law and Responsible Supply Chain Management Contract and Tort Interplay and Overlap Vibe Ulfbeck, Alexandra Andhov and Katerina Mitkidis Law and Responsible Supply Chain Management Contract and Tort Interplay and Overlap Edited by Vibe Ulfbeck, Alexandra Andhov and ˇ Katerina Mitkidis Firstpublished2019 byRoutledge 2ParkSquare,MiltonPark,Abingdon,OxonOX144RN andbyRoutledge 52VanderbiltAvenue,NewYork,NY10017 RoutledgeisanimprintoftheTaylor&FrancisGroup,aninformabusiness ©2019selectionandeditorialmatter,VibeUlfbeck,AlexandraAndhovand KaterˇinaMitkidis;individualchapters,thecontributors TherightofVibeUlfbeck,AlexandraAndhovandKaterˇinaMitkidistobe identifiedastheauthorsoftheeditorialmaterial,andoftheauthorsfortheir individualchapters,hasbeenassertedinaccordancewithsections77and78of theCopyright,DesignsandPatentsAct1988. Allrightsreserved.Nopartofthisbookmaybereprintedorreproducedor utilisedinanyformorbyanyelectronic,mechanical,orothermeans,now knownorhereafterinvented,includingphotocopyingandrecording,orinany informationstorageorretrievalsystem,withoutpermissioninwritingfromthe publishers. Trademarknotice:Productorcorporatenamesmaybetrademarksorregistered trademarks,andareusedonlyforidentificationandexplanationwithoutintent toinfringe. BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary LibraryofCongressCataloging-in-PublicationData Acatalogrecordhasbeenrequestedforthisbook ISBN:978-1-138-61840-4(hbk) ISBN:978-0-429-46123-1(ebk) TypesetinGalliard byTaylor&FrancisBooks Contents List of tables vii List of contributors viii Preface xi 1 Introduction 1 ˇ VIBEULFBECK,ALEXANDRAANDHOVANDKATERINAMITKIDIS PARTI CONTRACT LAW 13 2 From international law to national law: The opportunities and limits of contractual CSR supply chain governance 15 KASEYMCCALL-SMITHANDANDREASRÜHMKORF 3 Contractual enforcement of CSR clauses and the protection of weak parties in the supply chain 46 VIBEULFBECK,OLEHANSENANDALEXANDRAANDHOV 4 Enforcement of sustainability contractual clauses in supply chains by third parties 65 ˇ KATERINAMITKIDIS PARTII TORT LAW 89 5 Direct and vicarious liability in supply chains 91 VIBEULFBECKANDANDREASEHLERS 6 Liability for “greenwashing”?: On unfair commercial practices, the legal duty to be transparent and the case for a “safe harbor” 110 LOUISEA.VYTOPIL vi Contents PARTIII INTERPLAY AND OVERLAP OF CONTRACT AND TORT LAW 131 7 Interplay between contract and tort in the supply chain 133 VIBEULFBECKANDOLEHANSEN 8 Developing supply chain liability: A necessary marriage of contract and tort? 146 JAAKKOSALMINENANDVIBEULFBECK Index 175 List of tables 2.1 Sectors and business areas of the 30 companies 18 2.2 Frequency of incorporation/referenceto international CSR standards 18 List of contributors Alexandra Andhov (JUDr., LL.M., S.J.D.) is assistant professor of corporate law at the University of Copenhagen, Faculty of Law. Alexandra holds an S.J.D. in International Business Law from the Central European University (2015) and an LL.M in International Business Law. She has been a visiting researcher at Cornell LawSchool(2014)andOxfordLawSchool(2013).BeforejoiningtheUniversity of Copenhagen, she was a research fellow at the Center for Integrity in Business and Government at the CEU Business School (2012–2015) and she worked with CMS Cameron McKenna in Budapest on their litigation and white-collar crime team. Alexandra’s main areas of research are corporate law, corporate social responsibilityandcapitalmarketlaw.Onthesetopics,shehaspublishedarticlesin numerous European and US law journals and reviews. AndreasEhlersisassociateprofessoroftortlawattheUniversityofCopenhagen, Faculty of Law. He obtained his master’s degree from the University of Copen- hagen in 2004 and subsequently worked for the law firm Kromann Reumert. In 2006, he was awarded the Sir Gerrard Brennan Scholarship at the University of Queensland (Australia), where he obtained an LL.M. degree in 2007. In 2011, Andreas published his PhD thesis on the doctrine of adequacy in torts. In 2017, Andreas published an LL.D. thesis on causation and personal injury. Moreover, Andreas has published several articles on tort law and related issues in Danish and foreign law journals. Ole Hansen is a professor of private law at the Law Faculty at the University of Copenhagen. He is a co-founder and a member of the research centre the Centre for Enterprise Liability (CEVIA). His area of research is general contract law with a special emphasis on long term contracts and the interplay between public law andprivatelawandlegalaspectsofprivategovernance.Hisdoctorateworkwason construction law contracts and he is currently heading a research project on the digitalization of construction law. Kasey McCall-Smith is a lecturer in public international law and the director of the LLM in Human Rights at the University of Edinburgh Law School. Her research and publications examine reservations rules in the law of treaties and, in particular, the way in which human rights obligations and treaty body outputs are List of contributors ix implementedandinterpretedinnationallegalsystems.Mostrecentlytheselinesof enquiry have focused on the incorporation of human rights treaties, US detention operations in Guantanamo Bay and modern slavery in global supply chains. She is currently the executive chair of the Association of Human Rights Institutes. Katerˇina Mitkidis is an associate professor at the Department of Law, Aarhus University.Katerˇina’sresearchfocusesonthepracticeofusingprivatelawtoolsto advancepublicinterests,especiallyintheCSRandenvironmentalregulationareas. She has published a book on this topic, titled Sustainability Clauses in Interna- tional Business Contracts, focusing on the interplay between sustainability goals andinternationalcontractlaw(ElevenInternationalPublishing,2015).Kateˇrinais also interested in the ways law and legal tools are designed and used to steer behaviour in socially and environmentally sound and responsible directions. She was a visiting scholar at Duke University (2016) and Vanderbilt University (2012). Before joining academia, Katerˇina worked as legal trainee for Baker & McKenzie, Prague office, and as a junior lawyer in Hájek & Zrzavecký, Czech Republic. Andreas Rühmkorf is a Lecturer in Commercial Law at the University of Shef- field,UK.AndreashasaPhDfromthesameinstitutionandheisalsoadmittedto the bar in Germany (Rechtsanwalt). His research interests are the legal regulation ofCSRinglobalsupplychains,focusingonthedevelopinglawsinthisareainthe home states of transnational corporations as well as company law and corporate governance. Andreas is the author of the monograph Corporate Social Responsi- bility, Private Law and Global Supply Chains (Edward Elgar Publishing, 2015). Andreas has authored several articles and book chapters about CSR in global supply chains. Jaakko Salminen (LL.D., LL.M., M.A.) has focused on researching the role of law in enabling, structuring and governing global value chains. Focusing on a tri- fecta of comparative private governance, private law and transnational regulation, Jaakko’s interests range from the theories, typologies and practices of governance through contract to debating the amount of liability companies should have over the environmental and labour contingencies of their transnational production chains and through which legal means. Jaakko has lectured extensively in parti- cular at the University of Turku Faculty of Law, presented his research at numerous international conferences and participated in several externally funded research projects. In 2017, he received his doctorate for the manuscript From National Product Liability Regimes towards Transnational Production Liability: Conceptualizing the Relationship of Law and Global Production. Vibe Ulfbeck is a professor of private law at the Law Faculty at the University of Copenhagen. She has an LL.M from the University of Cambridge, UK, and her doctorate work was on the topic of privity of contract, for which she received the Jorck’s Prize for excellent research. She is head of the research centre the Centre for Enterprise Liability (CEVIA), of which she was one of the founders. She spe- cializes in contract law and tort law with a special interest in private governance