Contractual Control and Labour-Related CSR Norms in the Supply Chain: Dutch Best Practices

Abstract

Multinational companies attempt to gain contractual control of their supply chain, in the face of possible reputational and legal risks with regard to corporate social responsibility. This article sets out the choices that fourteen Dutch multinational companies make: do they choose contracts, general terms and conditions and/or codes of conduct to regulate CSR in their supply chains? Furthermore, it explores the possibilities and limitations of these choices in terms of contract law. A model with three possible options that companies may choose is proposed. It is concluded that most Dutch multinationals do not rely on codes of conduct alone; nearly all anchor their codes of conduct by means of contractual mechanisms. Furthermore, nearly all 'strong' choices include perpetual clauses in relation to sub-tier suppliers.