The sui­cide nets installed around a Fox­conn fact­ory in China

Only a few months ago, the social image of prom­in­ent transna­tional enter­prises such as Apple and HP was threatened by media report­ing sev­eral viol­a­tions of labor rights by Fox­conn, the main con­tract man­u­fac­turer for elec­tron­ics com­pan­ies such as these, and which is loc­ated in the People’s Repub­lic of China. In the light of the poten­tial com­mer­cial reper­cus­sions, Apple and Fox­conn invited the Fair Labor Asso­ci­ation (the FLA) into the factor­ies where Apple’s products are built, rely­ing on the fact that Apple had just joined the Asso­ci­ation on Janu­ary 13. After more than a month of invest­ig­a­tion, the FLA “revealed [instances of] ser­i­ous and press­ing non-​compliance with FLA’s Work­place Code of Con­duct, as well as Chinese labor law” and claimed that both Apple and Fox­conn “have agreed to ongo­ing assess­ments by FLA in order to ensure that labor prac­tices meet FLA stand­ards and remain in com­pli­ance for the long term.” If respec­ted and enforced, the private agree­ment con­cluded between the two enter­prises would mean the replace­ment of the cur­rent Chinese work­ing stand­ards with the legal archi­tec­ture privately defined by the FLA, i.e. the cre­ation of an ad hoc intra-​national legal order whose bound­ar­ies will be rep­res­en­ted by Foxconn’s gates.

More recently, both the Brazilian lower house and Sen­ate approved the ‘Lei Geral da Copa’, accord­ing to which the ban on alco­holic drinks in Brazil’s sta­di­ums intro­duced in 2003 as part of the Sup­port­ers’ Stat­utes, aimed at pre­vent­ing viol­ence among hard­core fans at foot­ball matches, will be lif­ted for the occa­sions of the Con­fed­er­a­tion Cup and the World Cup. The law signed by Pres­id­ent Dilma per­mits the issue of an ad hoc jur­idical order that will be applied only in the sta­di­ums that will host the two com­pet­i­tions, and only for the length of the events. Wel­comed with great sat­is­fac­tion by the FIFA sec­ret­ary gen­eral Jerome Val­cke, it will cre­ate a sub-​system of law which will be tem­por­ally lim­ited and geo­graph­ic­ally con­tained by the doors of the World Cup’s sta­di­ums, but, more import­antly, which will be entirely determ­ined by the need for the state to respect the private agree­ment con­cluded between the Brazilian Gov­ern­ment and the Fédéra­tion Inter­na­tionale de Foot­ball Asso­ci­ation, with one eye on neg­at­ive effects on the poten­tial profits of Anheuser-​Busch, the FIFA’s beer spon­sor. While European sup­port­ers may be used to enjoy­ing a beer while watch­ing their sport idols con­front­ing each-​other, Brazil had been in the pro­cess of fol­low­ing a dif­fer­ent path, but it has even­tu­ally bowed to the con­tent of the private agreement.

The cases dis­cussed above, appar­ently dis­sim­ilar and unre­lated, rep­res­ent two of the many situ­ations in which a private agree­ment inter­venes to shape and modify national legal orders, both by impos­ing spe­cific beha­vi­ors on one of the con­tract­ing parties or by amend­ing the exist­ing law in order to accom­mod­ate the interest of private parties. In both cases, I claim, an instru­ment of private law is util­ized as a proxy for legal trans­plant and the cre­ation of spe­cial areas of law, a sort of Spe­cial Legal Zone (SLZ), where the applic­able law is dif­fer­ent from what lies bey­ond its scope, and the jur­idical com­pet­ence is often attrib­uted to altern­at­ive mech­an­isms of dis­pute. Whether we wel­come the effect­ive dif­fu­sion of high stand­ards of pro­duc­tion that lead to tak­ing parties above exist­ing stat­utory stand­ards, the same can­not be said about the use of sov­er­eign prerog­at­ives in order to modify and shape national legal orders accord­ing to the con­tent of a private agree­ment. Char­ac­ter­ized by a bright and a dark side, the pro­lif­er­a­tion of private tools of legal trans­plant and their role in the expan­sion of a glob­al­ized legal order, requires jur­ists to inter­rog­ate the cur­rent phe­nomenon and define its con­tent, and to pro­pose new the­or­ies that move bey­ond the tra­di­tional con­cep­tion of legal trans­plant as nation-​to-​nation imitation.

As the Fox­conn and FIFA examples demon­strate, glob­al­iz­a­tion is any­thing but a static and well-​defined phe­nomenon, a com­plex pro­cess that involves a plur­al­ity of act­ors and a mul­ti­tude of fields. Extremely reluct­ant to be con­strained within defined bor­ders, so much that Anthony Gid­dens defines it as a ‘term that we use fre­quently but which is poorly con­cep­tu­al­ized’¹, glob­al­iz­a­tion can be decom­posed in a plur­al­ity of sub-​processes, every­one involving and influ­en­cing dif­fer­ent aspects of life. There­fore, fol­low­ing the scheme traced by Boaven­tura de Sousa San­tos² and Duncan Kennedy³, it appears more appro­pri­ate to talk of glob­al­iz­a­tions rather than of a single glob­al­iz­a­tion, a plur­al­ity of phe­nom­ena based on the indi­vidu­al­iz­a­tion of a model of ref­er­ence by the main eco­nomic and polit­ical power which is then expan­ded bey­ond its own fron­ti­ers in order to become uni­ver­sal⁴. In this sense, glob­al­iz­a­tions are acts of uni­ver­sal­iz­a­tion, where law and cul­ture play a fun­da­mental role as tools and object­ive of change and stand­ard­iz­a­tion, so to have a dir­ect impact on local diversity and autonomy.

After thirty years in which global legal trans­plant has been defined as a state-​to-​state rela­tion­ship based on prestige, power, or imit­a­tion, today one new piece seems to be part of the global puzzle of legal stand­ard­iz­a­tion, which pushes aside the tra­di­tional idea of trans­plant as the simple mov­ing of a rule or a sys­tem of law from one coun­try to another, or from one people to another one’. This reduced per­cep­tion of legal trans­plant, in fact, can fit into a global order based on nation states and inter­na­tional organ­iz­a­tions, but it can­not be adap­ted to the cur­rent post-​modern scen­ario where global, national and local orders inter­act with each other, cul­tural dis­tinc­tions are becom­ing blurred, where the private is occupy­ing the space once occu­pied by the pub­lic, and where transna­tional enter­prises (TNEs) cut across con­tin­ents with little geo­graph­ical attachment.

Embed­ded in dog­matic immob­il­ity, we tend to remain entrapped in the idea of a private con­tract as an agree­ment that only incid­ent­ally is touched upon by the pub­lic sphere, but cer­tainly does not define its con­tent, so that we miss the pro­cess by which pro­duc­tion agree­ments, codes of con­duct, and norms of cor­por­ate social respons­ib­il­ity are made of norms and means of coer­cion that are trans­ferred from one legal order to the con­tract (a dif­fer­ent legal con­text), where they can rep­res­ent the new term of ref­er­ence for people’s beha­vi­ors. On the other side, only if we aban­don the private-​public dis­tinc­tion that is presen­ted as an untouch­able dogma, can we real­ize that cer­tain clauses con­tained in invest­ment con­tracts con­cluded between TNEs and national gov­ern­ments, such as ad hoc fiscal agree­ments, the defin­i­tion of prop­erty or of work­ing hours, the oblig­a­tions to provide full access to nat­ural resources or to crys­tal­lize law at the moment of the deal, we real­ize that private agree­ments become the legal tool through which a par­tic­u­lar legal nar­rat­ive, that of private prop­erty, indi­vidu­al­ity, com­modi­fic­a­tion of nature, etc., is expan­ded and uni­ver­sal­ized, pier­cing national bound­ar­ies and, bey­ond, the idea of national legal orders.

The intense net­work of legal tools that keep together the pieces of transna­tional enter­prises, along with the cur­rent modi­fic­a­tions in the rela­tion­ship between states and global enter­prises, requires jur­ists to recon­sider the bound­ar­ies between legal domains, and to develop a new the­ory of legal trans­plants which does not look at the source, but at the dis­tri­bu­tion of power. We have to aban­don the idea of a global com­munity of pub­lic legis­lat­ors that autonom­ously and inde­pend­ently issue coer­cive norms that bind their cit­izens, and shift to a com­plex pic­ture where coer­cive meas­ures are the product of the encounter between the private and pub­lic, or between private act­ors more and more integ­rated on a global level. In the last thirty years, legal forms and nar­rat­ives pro­duced in core coun­tries accord­ing to cap­it­al­istic eco­nomic needs have been detached from their own back­ground and moved upward to a global scale, so to con­sti­tute a new global eco­nomic order, a law-​non-​law with no clear source nor geo­graph­ical loc­a­tion, which is how­ever ter­rit­ori­al­ized any time it is respec­ted and or coer­cively enforced.

At first sight, private legal trans­plant (PLT) appears as a double-​faced phe­nomenon. On its bright side, it takes place when mother cor­por­a­tions or buy­ers impose their own stand­ards of con­duct and internal norms on private coun­ter­parts, so much that the lat­ter become internal legal sys­tems gov­erned accord­ing to exo­gen­ous dis­pos­i­tions. Legal stand­ards are raised and social, envir­on­mental or labor guar­an­tees strengthened by means of private agree­ment, although the pro­vi­sion of altern­at­ive dis­pute mech­an­ism risks coun­ter­bal­an­cing the poten­tial of the move and to sub­tract import­ant aspects of social life from pub­lic scru­tiny. In its dark aspect, PLT takes the form of invest­ment agree­ments con­cluded by global investors and nation states, with or without the legal umbrella of a Bilat­eral Invest­ment Agree­ment. Des­pite its private nature, in fact, the con­tent of the agree­ment becomes jur­idic­ally bind­ing for the state as sov­er­eign entity, and often requires it to exer­cise its prerog­at­ives in a way that respect and does not viol­ate its clauses, even if that means adapt­ing the national legal order and its insti­tu­tions accord­ing to the con­tent of the con­trac­tual oblig­a­tions. Spec­tac­u­larly for PLT’s bright aspect, it is hap­pen­ing with labor law, envir­on­mental pre­scrip­tions⁵, access to nat­ural resources and even the con­cep­tion of private prop­erty, and the risks of arbit­ra­tion and of neg­at­ive awards cer­tainly rep­res­ent a suf­fi­cient threat to reduce states’ mar­gins of appreciation.

Hence, in a glob­al­ized world where transna­tional cor­por­a­tions con­clude deals and invest­ments dir­ectly with nation states, legal reforms and adjust­ments, i.e. mod­ern legal trans­plants, do not only take place because of the action of pub­lic act­ors, but also as a con­sequence of a private-​to-​private inter­ac­tion and, even more inter­est­ingly, when private act­ors dir­ectly inter­act with the pub­lic. While the poten­tial of private-​to-​private legal trans­plant has come to be dis­cussed in the frame of Cor­por­ate Social Respons­ib­il­ity and global gov­ernance, although with little debate on the risks of a com­plete privat­iz­a­tion of the issue⁶, the private-​to-​public angle appears to be com­pletely over­looked, but extremely import­ant due to its implic­a­tions for national sov­er­eignty, demo­cracy, legit­im­acy and par­ti­cip­a­tion. In this last scen­ario, in fact, the con­trac­tual codi­fic­a­tion of a spe­cific legal dis­course and norms (includ­ing the prin­ciples of lex mer­cat­oria, a law/​non-​law which has long been strug­gling for legit­im­a­tion and con­demned to the vicious circle of legal autopoiesis), receives a formal invest­it­ure and becomes national law, des­pite its clear private origins.

In con­clu­sion, although the Fox­conn and FIFA cases might seem irrel­ev­ant or excep­tional, they are the evid­ence of a con­stant tend­ency toward the privat­iz­a­tion of the con­tent of bind­ing law. As the mod­ern mer­chants of law, private act­ors appear as the prox­ies of legal and cul­tural trans­form­a­tion, ⁷ pro­du­cers of a new legal real­ity that goes bey­ond mere eco­nomic trans­ac­tions, and whose per­vas­ive effects require to be deeply under­stood and stud­ied. There­fore, a gen­eral the­ory of PLT has to be pro­posed, one that provides a plat­form for a future and ana­lyt­ical applic­a­tion of this new cre­at­ive thought to other con­crete cases of transna­tional relationships.