Supply Chain Governance at a Distance

As inventory shortages wreak havoc on the global economy, the world is once again faced with the complexities and vulnerabilities inherent in supply chains. Yet to human rights advocates, this is nothing new. Companies have long had to manage the risk of human rights violations being committed by their third-party suppliers. In light of their largely ineffective attempts at self-regulation, governments have passed a variety of mechanisms to seek corporate accountability, ranging from intergovernmental instruments and supranational law to mandatory domestic legislation. Recent legal efforts to govern global supply chains have centered around a single practice—'human rights due diligence’—which is aimed at identifying, preventing, mitigating, and accounting for potential adverse human rights impacts.

While initially an ambiguous and vague concept when it was introduced by the United Nations in 2011, human rights due diligence is now the cornerstone of the international legal framework to regulate corporate activity related to human rights. It has evolved into an international legal norm whose meaning is being interpreted on the ground by corporate actors themselves. Articulated in a variety of legal instruments, the norm of human rights due diligence is taking shape in the technical practices of experts and through the leadership of industry associations. Drawing on industry standards, experts conduct supply chain mapping and risk assessments by applying auditing tools, indicators, and other management techniques. Yet corporate-designed templates for carrying out human rights due diligence are not just industry best practices. They have become the dominant standard for implementing domestic law on mineral supply chains (specifically, section 1502 of the US Dodd-Frank Act of 2010) and have been explicitly recommended by the European Union to implement its conflict minerals regulation (EU Regulation 2017/821). It is therefore critical to analyze the role of industry in interpreting the international legal norm of human rights due diligence.

In our article, we demonstrate that global supply chains are being ‘governed at a distance,’ borrowing from the framework of social theorists Nikolas Rose and Peter Miller. In other words, governments are outsourcing the power to regulate supply chains to certain industry associations, which are governing at a distance by means of audits, checklists, and other technocratic tools. We find that supply chain governance at a distance stands in contrast to the stated goals of human rights due diligence. Rather than establishing relationships of accountability, supply chain governance at a distance is creating an ‘ethic of detachment’ whereby companies are able to separate themselves legally, morally, and socially from responsibility to their suppliers.

Our analysis draws on a case study of a multi-industry association called the Responsible Minerals Initiative (RMI), which has assumed a leading role in implementing conflict minerals legislation and interpreting the norm of human rights due diligence in mineral supply chains. Established in 2008, the RMI was founded by companies to manage sourcing risks in Central Africa’s tin, tungsten, tantalum, and gold sectors (collectively referred to as ‘conflict minerals’). Among those risks was a concern that conflict minerals provided funding to armed groups in the Democratic Republic of Congo (DRC). As of 2022, the RMI has grown to more than 400 corporate members in such industries as electronics, automotive, aerospace, jewelry, and communications. The organization evolved to fill a vacuum left by the US government in 2010 when it passed conflict minerals legislation (section 1502 of the US Dodd-Frank Act), which lacked sufficient guidance on how to implement its extraterritorial provisions. The RMI has since assumed a leading role in implementing this law, as well as similar legislation passed by the EU, by developing a reporting template and auditing standards targeting what are considered to be supply chain choke points—the smelters and refiners often located abroad (SEC 2012). The RMI’s tools give meaning to the international legal norm of human rights due diligence in the context of mineral supply chains.

Drawing on interviews with RMI staff, corporate representatives, and independent members of the RMI’s governance committees, as well as participant observation within the RMI, we analyze the industry association’s role in implementing regulations on global mineral supply chains and interpreting the norm of human rights due diligence. We focus on the RMI’s Risk Readiness Assessment, which is an online self-assessment and due diligence tool for companies to identify and assess environmental, social, and governance risks across fifteen minerals and metals in raw materials supply chains. We demonstrate that while the RMI’s tools provide companies with helpful guidance, they mask the underlying corporate interests that control how human rights due diligence is being interpreted and implemented on the ground. The RMI’s Risk Readiness Assessment is based on general and sometimes vague categories as well as rankings that lack substantial differentiation. In addition, there is no independent verification of corporate-disclosed information or their evaluation of supply chain risks, thus resulting in a lack of accountability to external stakeholders. Based on our analysis, we argue that human rights due diligence is being transformed from an instrument of corporate accountability to a tool of corporate legitimacy. We argue that the RMI’s technocratic tools are enabling corporations to exercise considerable influence over the interpretation of the legal norm of human rights due diligence. As a result, global supply chains are being governed at a distance and fostering an ethic of detachment that enables corporations to manage, control, and limit their attachments to their suppliers and thereby deflect accountability.

Galit A. Sarfaty is a Canada Research Chair in Global Economic Governance & Associate Professor at the University of British Columbia’s Allard School of Law.

Raphaël Deberdt is a Ph.D student at the Department of Anthropology of the University of British Columbia.