This post comes out of the early career workshop ‘Law and Political Economy in Europe’, which took place at the Centre for Socio-Legal Studies, at the University of Oxford, on the 7th of October 2019. For all the posts this series, click here.
Laura Dominique Knöpfel –
The French corporate law professor Jean-Philippe Robé does not grow tired of reiterating that legal scholars (but also political scientists and economists) constantly conflate the economic organisation of a business – the firm – with its legal organisation – the corporation. But, he states, “(l)’enterprise n’existe pas en tant que telle en droit”, the enterprise, the economic organization of a business, does not exist as such in law. What exists in law is the legal fiction of the corporate person, and not the entire economic organization necessary for the business. His astute observation has gained importance as our study of global capitalism turns to the importance of global value chains (GVCs). The concept of the GVC grasps the entire “life cycle” of a product ranging from its design, production, trade and consumption to its disposal and recycling. In a GVC, a lead corporation has the capacity to steer and govern the economic processes. To do so, it must exert a certain degree of control in the equity-based or contract-based relations that link various corporations into a GVC. The emerging global connections, in the words of anthropologist Anna Tsing, are “made up of uneven and awkward links”. At peripheries of GVCs, global capitalism manifests in “unequal encounters” of the global and the particular. In “fragmented but linked economic niches”, nature is turned into a commodity and humans into labour power.
Harms along GVCs have recently found their way into courts in European home state jurisdictions of lead corporations. However, law’s fabrication of the corporate person as an entity with clearly defined boundaries separating it from the societal environment, including GVCs, has prevented a just attribution of civil liability. The conception of the corporation as a separate corporate person interrupts the linkages the GVC creates between the unequal encounters at corporate frontiers and the lead corporation. Related thereto, is the exclusion of affected local communities from decision-making structures within GVCs.