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International Law and Economics International Law and Economics Series editors Stefan Voigt, Germany Anne van Aaken, Switzerland Andrew T. Guzman, USA Stefan Oeter, Germany Joel P. Trachtman, USA Naigen Zhang, China More information about this series at http://www.springer.com/series/13428 Felix Hadwiger Contracting International Employee Participation Global Framework Agreements Felix Hadwiger Institute of Law & Economics University of Hamburg Hamburg, Germany ISSN 2364-1851 ISSN 2364-186X (electronic) International Law and Economics ISBN 978-3-319-71098-3 ISBN 978-3-319-71099-0 (eBook) https://doi.org/10.1007/978-3-319-71099-0 Library of Congress Control Number: 2017960766 © Springer International Publishing AG 2018 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgements I am very grateful to my family and friends who helped me during the course of this research. To name only a few of them: Fanny E. Schories, Farzaneh Badiei, Mariia Parubets, Sarah Lee, Marek Endrich, Melina Ba¨rwalde and Enrico Cairola helped me with invaluable comments and suggestions and I highly appreciate the guidance and recommendations of Professor Eger and Professor Basedow. More- over, I am grateful to the Deutsche Forschungsgemeinschaft (DFG), which funded the Graduiertenkolleg “The Economics of the Internationalization of the Law” (GRK 1597/2). The generous funding enabled me to present different chapters of this book at international conferences and to receive comments and suggestions. Presentations took me to conferences organized by the World Interdisciplinary Network for Institutional Research (WINIR), the Italian Economic Association, the American Public Choice Society, the Scandinavian ReMarkLab research network, the Bundesvereinigung Deutscher Arbeitgeberverba¨nde (BDA), the International Organization of Employers (IOE), BusinessEurope and the Interna- tional Training Centre of the International Labor Organization (ILO). Further- more, I am grateful for a fellowship from the Public Choice Society supporting my stay at the 53rd Annual Meeting of the Public Choice Society in Fort Lauderdale, Florida. Two chapters of this book were pre-published in peer-reviewed journals. Condensed versions of the chapter “The Implementation of Global Framework Agreements at Subsidiaries, Suppliers and Subcontractors” were published in the International Journal of Labour Research (Vol. 7, pp. 75–94) and as a longer background paper by ILO-ACTRAV (ISBN 978-92-2-131147-8). The findings of the background paper informed a report for discussion at the ILO’s International v vi Acknowledgements Labor Conference 20161 in Geneva. The chapter “Looking to the Future: Media- tion and Arbitration Procedures for Global Framework Agreements” has been accepted for publication in the journal Transfer: European Review of Labour and Research. 1International Labor Organization (2016): Report for the International Labour Conference. Decent Work in Global Supply Chains, Geneva, pp. 55–56. Contents 1 Introduction .......................................... 1 1.1 Global Framework Agreements . 1 1.1.1 The Need for International Governance Structures . 1 1.1.2 Emergence of Transnational Industrial Relations ..... 2 1.1.3 Future Regulatory Potential of Global Framework Agreements . .............................. 3 1.1.4 The Economic Analysis of Law ................. 3 1.2 Outline ......................................... 4 1.2.1 Foundations . .............................. 4 1.2.2 Effects of Global Framework Agreements . 5 1.2.3 Outlook . ................................ 6 1.3 The Added Value of This Book . ...................... 6 1.3.1 Creation of a New Data Set . ................. 6 1.3.2 Prominent Contributions . 6 1.3.3 Focus on the Question as to Why Companies ConcludeGlobalFrameworkAgreements........... 7 1.3.4 Methodological Approach . .................... 7 Part I Foundations 2 The Internationalization of Law: The Evolution of Labor Standards in Response to Globalization ..................... 11 2.1 The Predicament: Governance Gaps . 11 2.2 The Evolution of Labor Standards in Response to Globalization: Towards a Global Labor Governance Regime ............. 12 2.2.1 Responses by International Organizations: Defining International Standards . .................... 13 2.2.2 Government Responses: Increasing Market Transparency and Corporate Accountability . 16 2.2.3 Company Responses: Corporate Social Responsibility . 17 vii viii Contents 2.3 A Thread in the Web: Global Framework Agreements . 19 3 The Phenomenon of Global Framework Agreements ........... 21 3.1 New Phenomenon: Global Framework Agreements . ...... 21 3.1.1 Development of Global Framework Agreements: Continuous Growth .......................... 23 3.1.2 Bargaining Partners . ......................... 25 3.1.3 European Framework Agreements ............... 34 3.2 Content of Global Framework Agreements: Major Features and Development Over Time ......................... 36 3.2.1 Research Sample . ......................... 37 3.2.2 References to International Standards . ........... 43 3.2.3 Regulatory Objectives ........................ 47 3.2.4 Scope of Global Framework Agreements .......... 53 3.2.5 The Enforcement of Global Framework Agreements . 53 3.2.6 Monitoring and Dispute Resolution . ........... 55 4 Enforcement in Courts or Private Enforcement? .............. 61 4.1 Enforcement of Global Framework Agreements . ......... 61 4.1.1 Literature Review: Legal Status of Global Framework Agreements . .............................. 63 4.1.2 Content Analysis of Global Framework Agreements . 67 4.1.3 Discussion . ............................... 73 4.2 Terra Incognita: Enforcement of Global Framework Agreements in Courts ........................................ 74 4.3 Global Framework Agreements as Instruments of Self-regulation andPrivateOrdering................................. 76 4.3.1 Extra-Legal Enforcement . ..................... 76 4.3.2 The Sanctioning Power of Global Union Federations . 78 4.3.3 Discussion . ............................... 81 4.4 Outlook . 82 5 Interests and Incentives of the Bargaining Partners ............ 85 5.1 Why Do Multinational Companies and Global Union Federations Sign Global Framework Agreements? . 85 5.2 Global Framework Agreements Are Mutually Beneficial . 86 5.3 Interests and Incentives of Multinational Companies . ..... 88 5.3.1 Reduction and Privatization of Disputes ........... 88 5.3.2 Public Relations ............................ 94 5.3.3 Promotion of Equal Competitive Conditions . 95 5.3.4 Exogenous Requirements and Avoidance of Regulation .............................. 97 5.4 Global Union Federations: A Public Choice Perspective . .... 99 5.4.1 Interests of Global Union Federations . 100 5.4.2 Incentives to Sign Global Framework Agreements . 100 Contents ix 5.4.3 Principal Agent Problems: Extensive Chain of Delegation .............................. 101 5.4.4 Legitimation Function and Limitations . 104 5.5 Possible Obstacles to a Bargained Solution . .............. 105 5.5.1 Risks and Uncertainties ....................... 106 5.5.2 Transaction Costs . .......................... 106 5.5.3 Non-GFA Alternatives . 107 5.5.4 Summary of the Possible Obstacles . ........ 108 5.6 The Prospects of Global Framework Agreements . 108 Part II Effects of Global Framework Agreements 6 The Public Relations Effect of Global Framework Agreements . 111 6.1 Value Creation Through Responsible Business ............. 111 6.2 An Intuitive Hypothesis: Global Framework Agreements as Signaling Devices . ............................. 112 6.3 A Simple Conceptualization of Signaling ................. 113 6.3.1 Codes of Conduct . 115 6.3.2 Global Framework Agreements . 116 6.4 EmpiricalEvaluation:ExplorativeandDescriptiveEvidence.... 117 6.4.1 An Illustration: The Solvay Case Study . ........ 117 6.4.2 Content Analysis of Companies’ Websites ......... 120 6.5 Counterintuitive Results and Possible Explanations . 121 6.5.1 A Closer Look at the Descriptive Statistics ......... 123 6.5.2 Looking Beyond Descriptive Statistics . ......... 128 6.5.3 Explanations ............................... 129 6.6 Conclusions and Implications for Further Research ......... 134
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