The Regulatory Impact of Using Public Procurement to Promote Better Labour in Corporate Supply Chains

Abstract

This chapter examines the potential of government procurement as a mechanism for improving job quality and alleviating poverty and proposes ways in which these mechanisms can be strengthened so as to make them more effective. The promotion of higher labour standards through government procurement is a ‘soft’ law mechanism that may appeal to governments at a time when economic globalization has, among other things, reduced the political willingness and ability of governments to safeguard the welfare of workers and communities through the maintenance of conventional labour law systems. In many developed economies, governments have reduced their traditional legal protection of labour rights and standards. Many developing countries maintain strong labour laws ‘on paper’ but lack resources, adequate institutional frameworks and, at times, the will to properly enforce labour standards. This chapter assumes, however, that governments have a crucial role to play in promoting and enforcing labour standards. The difficulties of enforcement and the high disincentives to compliance with labour laws for businesses mean that governments must find innovative ways to create inducements for more widespread compliance with labour standards. It is the contention of this chapter that promotion of existing labour standards or higher than existing legal standards through government procurement may be effective because it is responsive to existing power and resource distribution among economic and social actors (Ayres and Braithwaite, 1992; Teubner, 1983).

Keywords: labour law, labour standards

JEL Classification: K00, K31