Regulating corporate regulators through contract law? : the case of corporate social responsibility codes of conduct

Abstract

Codes of conduct transcend the boundaries between the concepts of self-regulation, contract and regulation. This contribution focuses specifically on the phenomenon of corporate codes of conduct and argues that these codes can be described as a genuine form of regulation initiated by corporations, which as a consequence requires private law as the applicable legal framework to become more regulatory itself. In the context of this paper, corporate codes are defined as unilateral selfcommitments by companies to respect fundamental societal interests, such as human rights, labour standards or environmental protection, and the specific focus is on the role of contract law in regulating this corporate regulatory activity. To that end, the paper consists of four parts: it starts by proffering an explanation of why the phenomenon of corporate codes of conduct has only recently started to interest contract law scholars. It continues by analysing the way in which corporations use (and do not use) contracts and contract law enforcement in developing and practising their codes, and how contract law doctrine perceives this strategy. It reveals that there is currently a high degree of uncertainty over how contract law doctrine should react to this phenomenon. A normative argument is therefore developed and contextualised in favour of a stronger role for contract law in enforcing and regulating corporate codes. The paper concludes by emphasising the need for contract law to become regulatory in a novel sense: rather than focussing solely on the regulation of private actors via mandatory rules, contract law needs to be responsive to the conflict brought about by regulation through corporate codes of conduct by specifying clear rights and obligations that corporate regulators incur through adopting of a code of conduct.