Regulatory Unravelling of Mandatory Human Rights Due Diligence
Analyzing the German Supply Chain Act through the endogeneity of law framework.
1Endogeneity of Law Framework
The study utilizes the endogeneity of law framework to analyze the German Supply Chain Act. It examines how diverse actors, including business, legal, and civil society entities, constructed the meaning of mandatory human rights due diligence. This research covers the period from 2019 to 2026, focusing on the German garment industry's specific regulatory environment.
2Initial Contested Endogenization Phase
During the initial phase, actors with significant experience in private regulation actively resisted a managerialized interpretation of the law. This resistance prevented early convergence on standardized compliance practices. These stakeholders leveraged their historical expertise to challenge top-down regulatory definitions, ensuring that the implementation process remained highly contested and subject to ongoing negotiation among participants.
3Regulatory Unravelling Process
The second phase involved regulatory unravelling, driven by shifts in the broader political-economic climate. These external changes created specific avenues for weakening the law's substantive requirements. Consequently, the capacity to enforce and implement the legislation was significantly hindered, reflecting a departure from the initial objectives established during the earlier, more contested legislative development period.
4Managerialization and Legalization Dynamics
The research highlights the complex interplay between the managerialization of law and the legalization of organizations. These dual processes are not straightforward but are deeply influenced by the specific institutional context. The study demonstrates how organizational structures adapt to legal pressures, often resulting in unintended consequences for the actual enforcement of human rights standards.
5Regulatory Issue Complexity
One primary boundary condition identified is the inherent complexity of the regulatory issue itself. When dealing with global supply chains, the multifaceted nature of human rights compliance creates significant friction. This complexity complicates the translation of abstract legal mandates into concrete, actionable practices, often leading to fragmented implementation across different industry segments and firms.
6Field Regulatory Maturity
The maturity of the regulatory field serves as a critical factor in how laws are adopted. In sectors with established private governance, new mandatory rules face higher barriers to integration. The study shows that existing norms and practices within the German garment industry created a unique landscape that shaped the eventual success or failure of compliance.
7Impact of Regulatory Uncertainty
The degree of regulatory uncertainty significantly affects how actors interpret and respond to new mandates. High levels of ambiguity allow firms to delay or dilute their commitments, contributing to the observed unravelling. This uncertainty acts as a strategic variable that stakeholders manipulate to protect their interests while navigating the evolving legal requirements of the supply chain.
8Theoretical and Practical Implications
By connecting the endogeneity framework with supply chain governance research, the study offers refined insights for public regulation. It provides a theoretical basis for understanding why complex governance fields resist uniform implementation. These findings offer practical guidance for policymakers aiming to design more resilient and effective regulations that can withstand political and economic pressures.