Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-27T07:03:37.455Z Has data issue: false hasContentIssue false
  • English
  • Français

Transnational Private Regulation in Practice: The Limits of Forest and Labor Standards Certification in Indonesia

Published online by Cambridge University Press:  20 January 2017

Tim Bartley
Tim Bartley*
Affiliation:
Indiana University
Get access Rights & Permissions [Opens in a new window]

Abstract

Systems for certifying sustainable resource use and decent labor conditions have become prominent modes of private regulation at the transnational level. But serious questions remain about how these global standards are put into practice in particular places, especially in developing countries. Drawing on fieldwork in Indonesia, this paper examines the growth of certification of sustainable forestry (e.g., through the Forest Stewardship Council) and certification of decent labor conditions in factories (e.g., through Social Accountability International). Based on the controversy that surrounded both sweatshops and deforestation in Indonesia, and the export dependence of both the apparel/footwear and forest products sectors, these would appear to be prime candidates for the application of certification. Yet in both sectors, the growth of multi-stakeholder certification has been limited. Furthermore, private regulation in Indonesia has taken somewhat divergent paths in these two sectors, which shapes certification's significance at the point of production. The paper examines how the socio-legal context of certification, the character of supply chain relationships, and possible differences in the politics of labor and the environment can help to explain these patterns and contribute to a richer sense of private regulation's “on the ground” manifestations.

Keywords

regulation
Type
Research Article
Information
Business and Politics , Volume 12 , Issue 3 , October 2010 , pp. 1 - 34
Copyright
Copyright © V.K. Aggarwal 2010 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abbott, Kenneth, and Snidal, Duncan. 2009. ‘The Governance Triangle: Regulatory Standards Institutions and the Shadow of the State.” In The Politics of Global Regulation, edited by Mattli, Walter and Woods, Ngaire. Princeton and Oxford: Princeton University Press, 44–88 Google Scholar
Amengual, Matthew. 2010. “Complementary Labor Regulation: The Uncoordinated Combination of State and Private Regulators in the Dominican Republic.” World Development 38 (3): 405–414.CrossRefGoogle Scholar
ASEANAFFAIRS. 2009. “Export Decline Triggers Mass Layoffs at Indonesian Furniture Firms.” Nov. 2, 2009. http://www.aseanaffairs.com/indonesia_news/trade/export_decline_triggers_mass_layoffs_at_indonesian_furniture_firms.Google Scholar
Auld, Graeme, Gulbrandsen, Lars H., and McDermott, Constance L. 2008. “Certification Schemes and the Impacts on Forests and Forestry.” Annual Review of Environment and Resources 33: 187–211.CrossRefGoogle Scholar
Barr, Christopher. 2001. “Banking on Sustainability: Structural Adjustment and Forestry Reform in Post Suharto Indonesia.” Bogor, Indonesia: CIFOR.Google Scholar
Bartley, Tim. 2007. “Institutional Emergence in an Era of Globalization: The Rise of Transnational Private Regulation of Labor and Environmental Conditions.” American Journal of Sociology 113 (2): 297–351.CrossRefGoogle Scholar
Baumgartner, Frank R. and Jones, Bryan D. 1993. Agendas and Instability in American Politics. Chicago: University of Chicago Press.Google Scholar
Bernstein, Steven. 2001. The Compromise of Liberal Environmentalism. New York: Columbia University Press.CrossRefGoogle Scholar
Boli, John. 2006. “The Rationalization of Virtue and Virtuosity in World Society.” In Transnational Governance: Institutional Dynamics of Regulation, edited by Djelic, Marie-Laure and Sahlin-Andersson, Kerstin. New York: Cambridge University Press, 95–118.CrossRefGoogle Scholar
Büthe, Tim and Mattli, Walter. 2011. The New Global Rulers: The Privatization of Regulation in the World Economy. Princeton: Princeton University Press.Google Scholar
Caraway, Teri L. 2006a. “Freedom of Association: Battering Ram or Trojan Horse?” Review of International Political Economy 13 (2): 210–232.CrossRefGoogle Scholar
Caraway, Teri L. 2006b. “Political Openness and Transnational Activism: Comparative Insights from Labor Activism.” Politics & Society 34 (2): 277–304.CrossRefGoogle Scholar
Cashore, Benjamin, Auld, Graeme, and Newsom, Deanna. 2004. Governing Through Markets: Forest Certification and the Emergence of Non-state Authority. New Haven: Yale University Press.Google Scholar
Central Intelligence Agency. 2009. The World Factbook 2009. Washington, DC: Central Intelligence Agency.Google Scholar
Colchester, Marcus. 2006. “FSC Dilemmas in the Heart of Borneo: Step-wise Sand Bag or Sell Out?” World Rainforest Movement Bulletin, no. 105, April 2006.Google Scholar
Colchester, Marcus, Sirait, Martua, and Wijardjo, Boedhi. 2003. “Obstacles and Possibilities: The Application of FSC Principles 2 and 3 in Indonesia.” Report published by WAHLI and AMAN.Google Scholar
Conroy, Michael E. 2007. Branded!: How the Certification Revolution Is Transforming Global Corporations. Gabriola Island, BC, Canada: New Society Publishers.Google Scholar
Curran, Lisa M., Trigg, S. N., McDonald, A. K., Astiani, D., Hardiono, Y. M., Siregar, P., Caniago, I., and Kasischke, E. 2003. “Lowland Forest Loss in Protected Areas of Indonesian Borneo.” Science 303: 1000–1003.CrossRefGoogle Scholar
Dauvergne, Peter. 1993. “The Politics of Deforestation in Indonesia.” Pacific Affairs 66 (4): 497–518.CrossRefGoogle Scholar
Darnall, Nicole and Sides, Stephen. 2008. “Assessing the Performance of Voluntary Environmental Programs: Does Certification Matter?” Policy Studies Journal 36 (1): 95–117.CrossRefGoogle Scholar
Dicken, Peter and Hassler, Markus. 2000. “Organizing the Indonesian Clothing Industry in the Global Economy: the Role of Business Networks.” Environment and Planning A 32: 263–280.CrossRefGoogle Scholar
Djelic, Marie-Laure and Sahlin-Andersson, Kerstin, eds. 2006. Transnational Governance: Institutional Dynamics of Regulatiosn. New York: Cambridge University Press.CrossRefGoogle Scholar
Donovan, Richard. 2001. “A Perspective on the Perum Perhutani Certification Suspension.” Rainforest Alliance, http://www.rainforest-alliance.org/news/2001/perhutani-perspective.html.Google Scholar
Dove, Michael R. and Kammen, Daniel M. 2001. “Vernacular Models of Development: An Analysis of Indonesia Under the ‘New Order’.” World Development 29 (4): 619–639.CrossRefGoogle Scholar
Elliott, Chris. 2000. Forest Certification from a Policy Network Perspective. Jakarta: Center for International Forestry Research (CIFOR).Google Scholar
Elliott, Kimberly Ann and Freeman, Richard B. 2003. Can Labor Standards Improve Under Globalization? Washington, DC: Institute for International Economics.Google Scholar
Esbenshade, Jill. 2004. Monitoring Sweatshops: Workers, Consumers, and the Global Apparel Industry. Philadelphia: Temple University Press.Google Scholar
Espach, Ralph H. 2009. Private Environmental Regimes in Developing Countries: Globally Sown, Locally Grown. New York: Palgrave Macmillan.CrossRefGoogle Scholar
Evans, Rhonda and Kay, Tamara. 2008. “How Environmentalists Greened Trade Policy: Strategic Action and the Architecture of Field Overlap.” American Sociological Review 73 (6): 970–991.CrossRefGoogle Scholar
Feddersen, Timothy J. and Gilligan, Thomas W. 2001. “Saints and Markets: Activists and the Supply of Credence Goods.” Journal of Economics & Management Strategy 10 (1): 149–171.Google Scholar
Fligstein, Neil. 2001. The Architecture of Markets: An Economic Sociology of Twenty-First Century Capitalist Societies. Princeton: Princeton University Press.CrossRefGoogle Scholar
Food and Agriculture Organization (FAO). 2006. “Global Forest Resources Assessment 2005.” Rome: Food and Agriculture Organization of the United Nations.Google Scholar
Ford, Michele. 2009. Workers and Intellectuals: NGOs, Trade Unions and the Indonesian Labour Movement. Honolulu: University of Hawaii Press.Google Scholar
Fourcade, Marion and Savelsberg, Joachim J. 2006. “Global Processes, National Institutions, Local Bricolage: Shaping Law in an Era of Globalization.” Law and Social Inquiry 31 (3): 513–519.CrossRefGoogle Scholar
FSC Watch. 2008. “FSC dumps Asia Pulp and Paper - but who was to blame?” Jan. 10, 2008. http://www.fsc-watch.org/archives/2008/01/10/FSC_dumps_Asia_Pulp_.Google Scholar
Garcia-Johnson, Ronie. 2001. “Beyond Corporate Culture: Reputation, Rules, and the Role of Social and Environmental Certification Institutions.” unpublished paper, Duke University.Google Scholar
Gereffi, Gary, Garcia-Johnson, Ronie, and Sasser, Erika. 2001. “The NGO-Industrial Complex.” Foreign Policy 125 (July/Aug): 56–65.CrossRefGoogle Scholar
Gereffi, Gary, Humphrey, John, and Sturgeon, Timothy. 2005. “The governance of Global Value Chains.” Review of International Political Economy 12 (1): 78–104.CrossRefGoogle Scholar
Gulbrandsen, Lars H. 2005. “Mark of Sustainability? Challenges for Fishery and Forestry Eco-labeling.” Environment 47 (5): 8–23.Google Scholar
Gulbrandson, Lars H. 2009. “The Emergence and Effectiveness of the Marine Stewardship Council.” Marine Policy 33 (4): 654–660.CrossRefGoogle Scholar
Gullison, Raymond E. 2003. “Does Forest Certification Conserve Biodiversity?” Oryx 37 (2): 153–165.CrossRefGoogle Scholar
Hall, Keith. 2003. “UK Government in Dock Over Illegal Tropical Plywoods Use.” Building for a Future Magazine (Summer 2003): 4–10.Google Scholar
Halliday, Terence C. and Carruthers, Bruce G. 2007. “The Recursivity of Law: Global Norm Making and National Lawmaking in the Globalization of Corporate Insolvency Regimes.” American Journal of Sociology 112 (4): 1135–1202.CrossRefGoogle Scholar
Harrison, Ann and Scorse, Jason. 2006. “Improving the Conditions of Workers? Minimum Wage Legislation and Anti-Sweatshop Activism.” California Management Review 48 (2): 144–160.CrossRefGoogle Scholar
Haufler, Virginia. 2009. “The Kimberley Process, Club Goods, and Public Enforcement of a Private Regime.” In Voluntary Programs: A Club Theory Perspective, edited by Potoski, Matthew and Prakash, Aseem. Cambridge and London: MIT Press, 89–105 CrossRefGoogle Scholar
Hill, Hal. 2000. “Export Success Against the Odds: A Vietnamese Case Study.” World Development 28 (2): 283–300.CrossRefGoogle Scholar
Kaplinsky, Raphael, Morris, Mike, and Readman, Jeff. 2002. “The Globalization of Product Markets and Immiserizing Growth: Lessons From the South African Furniture Industry.” World Development 30 (7): 1159–1177.CrossRefGoogle Scholar
King, Andrew A., Lenox, Michael J., and Barnett, Michael L. 2002. “Strategic Responses to the Reputation Commons Problem.” In Organizations, Policy, and the Natural Environment, edited by Hoffman, Andrew J. and Ventresca, Marc J. Stanford, CA: Stanford University Press, 393–406 Google Scholar
King, Andrew and Lenox, Michael J. 2000. “Industry Self-Regulation without Sanctions: The Chemical Industry's Responsible Care Program.” Academy of Management Journal 43 (4): 698–716.CrossRefGoogle Scholar
King, Andrew A., Lenox, Michael J., and Terlaak, Ann. 2005. “The Strategic Use of Decentralized Institutions: Exploring Certification with the ISO 14001 Management Standard.” Academy of Management Journal 48 (6): 1091–1106.CrossRefGoogle Scholar
Klein, Naomi. 1999. No Logo: Taking Aim at the Brand Bullies. New York: Picador.Google Scholar
Kolk, Ans. 2005. “Corporate Social Responsibility in the Coffee Sector: The Dynamics of MNC Responses and Code Development.” European Management Journal 23 (2): 228–236.CrossRefGoogle Scholar
Kotchen, Matthew J. and van ‘t Veld, Klaas. 2009. “An Economics Perspective on Treating Voluntary Programs as Clubs.” In Voluntary Programs: A Club Theory Perspective, edited by Potoski, Matthew and Prakash, Aseem. Cambridge: MIT Press, 67–86 CrossRefGoogle Scholar
Lebedys, Arvydas. 2008. “Contribution of the forestry sector to national economies, 1990-2006.” Food and Agriculture Organization (FAO), Rome. http://www.fao.org/docrep/011/k4588e/k4588e00.htm.Google Scholar
Linton, April. 2008. “A Niche for Sustainability? Fair Labor and Environmentally Sound Practices in the Specialty Coffee Industry.” Globalizations 5 (2): 231–245.CrossRefGoogle Scholar
Locke, Richard, Amengual, Matthew, and Mangla, Akshay. 2009. “Virtue out of Necessity?: Compliance, Commitment and the Improvement of Labor Conditions in Global Supply Chains.” Politics & Society 37 (3): 319–351.CrossRefGoogle Scholar
Loya, Thomas A. and Boli, John. 1999. “Standardization in the World Polity: Technical Rationality over Power.” In Constructing World Culture: International Nongovernmental Organizations Since 1875, edited by Boli, John and Thomas, George M. Stanford, CA: Stanford University Press, 169–197.CrossRefGoogle Scholar
Maletz, Olga and Tysiachniouk, Maria. 2009. “The effect of expertise on the quality of forest standards implementation: The case of FSC forest certification in Russia.” Forest Policy and Economics 11 (5-6): 422–428.CrossRefGoogle Scholar
Mattli, Walter and Büthe, Tim. 2003. “Setting International Standards: Technological Rationality or Primacy of Power?” World Politics 56 (1): 1–42.CrossRefGoogle Scholar
McCarthy, John F. 2004. “Changing to Gray: Decentralization and the Emergence of Volatile Socio-Legal Configurations in Central Kalimantan, Indonesia.” World Development 32 (7): 1199–1223.CrossRefGoogle Scholar
Merry, Sally Engle. 2006. Human Rights and Gender Violence: Translating International Law into Local Justice. Chicago: University of Chicago Press.Google Scholar
Micheletti, Michele. 2003. Political Virtue and Shopping: Individuals, Consumerism, and Collective Action. New York: Palgrave Macmillan.CrossRefGoogle Scholar
Monshipouri, Mahmood, Welch, Claude E. Jr, and Kennedy, Evan T. 2003. “Multinational Corporations and the Ethics of Global Responsibility: Problems and Possibilities.” Human Rights Quarterly 25 (4): 965–989.CrossRefGoogle Scholar
Muhtaman, Dwi Rahmad and Prasetyo, Ferdinandus Agung. 2006. “Forest Certification in Indonesia.” In Confronting Sustainability: Forest Certification in Developing and Transitioning Countries, edited by Cashore, Benjamin, Gale, Fred, Meidinger, Errol, and Newsom, Deanna. New Haven: Yale School of Forestry & Environmental Studies, 33–68.Google Scholar
National Research Council. 2010. “Certifiably Sustainable? The Role of Third-Party Certification Systems: Report of a Workshop.” National Academies Press.Google Scholar
O'Rourke, Dara. 2005. “Market Movements: Nongovernmental Organization Strategies to Influence Global Production and Consumption.” Journal of Industrial Ecology 9 (1-2): 115–128.CrossRefGoogle Scholar
O'Rourke, Dara. 2006. “Multi-stakeholder Regulation: Privatizing or Socializing Global Labor Standards?” World Development 34 (5): 899–918.CrossRefGoogle Scholar
Obach, Brian K. 2004. Labor and the Environmental Movement: The Quest for Common Ground. Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Overdevest, Christine. 2010. “Comparing Forest Certification Schemes: the Case of Ratcheting Standards in the Forest Sector.” Socio-Economic Review 8 (1): 47–76.CrossRefGoogle Scholar
Polanyi, Karl. 1944. The Great Transformation. Boston: Beacon Press.Google Scholar
Polaski, Sandra. 2006. “Combining Global and Local Forces: The Case of Labor Rights in Cambodia.” World Development 34 (5): 919–932.CrossRefGoogle Scholar
Ponte, Stefano. 2008. “Greener than Thou: The Political Economy of Fish Ecolabeling and Its Local Manifestations in South Africa.” World Development 36 (1): 159–175.CrossRefGoogle Scholar
Posthuma, Anne Caroline. 2004. “Taking a Seat in the Global Marketplace: Opportunities for ‘High Road’ Upgrading in the Indonesian Wood Furniture Sector?” Research in the Sociology of Work 13 (3): 175–194.CrossRefGoogle Scholar
Potoski, Matthew and Prakash, Aseem. 2009. “A Club Theory Approach to Voluntary Programs.” In Voluntary Programs: A Club Theory Perspective, edited by Potoski, Matthew and Prakash, Aseem. Cambridge: MIT Press.CrossRefGoogle Scholar
Prakash, Aseem and Potoski, Matthew. 2006. “Racing to the Bottom? Trade, Environmental Governance, and ISO 14001.” American Journal of Political Science 50 (2): 350–364.CrossRefGoogle Scholar
Rainforest Alliance SmartWood Program. 2002. “Forest Management Public Summary for PT Perhutani – KPH Lawu.” New York: Rainforest Alliance.Google Scholar
Raitzer, David A. 2008. “Assessing the Impact of CIFOR's Influence on Policy and Practice in the Indonesian Pulp and Paper Sector.” Center for International Forestry Research, Bogor, Indonesia.Google Scholar
Rao, Hayagreeva. 1998. “Caveat Emptor: The Construction of Nonprofit Consumer Watchdog Organizations.” American Journal of Sociology 103 (4): 912–61.CrossRefGoogle Scholar
Riles, Annelise. 2000. The Network Inside Out. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Robison, Richard and Hadiz, Vedi R. 2004. Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Markets. New York: RoutledgeCurzon.Google Scholar
Sabel, Charles, O'Rourke, Dara, and Fung, Archon. 2000. “Ratcheting Labor Standards: Regulation for Continuous Improvement in the Global Workplace.” KSG Working Paper No. 00-010, ssrn.com/abstract=253833.Google Scholar
Schneiberg, Marc, and Bartley, Tim. 2001. “Regulating American Industries: Markets, Politics, and the Institutional Determinants of Fire Insurance Regulation.” American Journal of Sociology 107 (1): 101–146.CrossRefGoogle Scholar
Seidman, Gay. 2007. Beyond the Boycott: Labor Rights, Human Rights and Transnational Activism. New York: Russell Sage Foundation/ASA Rose Series.Google Scholar
Sethi, S. Prakash. 2003. Setting Global Standards: Guidelines for Creating Codes of Conduct in Multinational Corporations. Hoboken, NJ: John Wiley & Sons.Google Scholar
Social Accountability Accreditation Services. 2005. “Complaint #006: Certification Improper because of Major Non-conformance.”Google Scholar
Spar, Debra L. and LaMure, Lane T. 2003. “The Power of Activism: Assessing the Impact of NGOs on Global Business.” California Management Review 45 (3): 78–101.CrossRefGoogle Scholar
Suchman, Mark C. 1995. “Managing Legitimacy: Strategic and Institutional Approaches.” Academy of Management Review 20 (3): 571–610.CrossRefGoogle Scholar
Taylor, Peter Leigh. 2005. “In the Market But Not of It: Fair Trade Coffee and Forest Stewardship Council Certification as Market-Based Social Change.” World Development 33 (1): 129–147.CrossRefGoogle Scholar
Tollefson, Chris, Gale, Fred, and Haley, David. 2008. Setting the Standard: Certification, Governance, and the Forest Stewardship Council. Vancouver: University of British Columbia Press.Google Scholar
Tsing, Anna L. 2005. Friction: An Ethnography of Global Connection. Princeton: Princeton University Press.CrossRefGoogle Scholar
Ussach, Ivan. 1990. “Letter to Bob Simeone, Nov. 13, 1990.” Personal archives of FSC organizer.Google Scholar
Vandenbergh, Michael P. 2007. “The New Wal-Mart Effect: The Role of Private Contracting in Global Governance.” UCLA Law Review 54: 913–970.Google Scholar
Vandergeest, Peter. 2007. “Certification and Communities: Alternatives for Regulating the Environmental and Social Impacts of Shrimp Farming.” World Development 35 (7): 1152–1171.CrossRefGoogle Scholar
Vogel, David. 2005. The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. New York: Brookings Institution Press.Google Scholar
Vogel, David, 2008. “Private Global Business Regulation.” Annual Review of Political Science 11: 261–282.CrossRefGoogle Scholar
Vogt, Kristiina A., Larson, Bruce C., Gordon, John C., Vogt, Daniel J., and Fanzeres, Anna. 2000. Forest Certification: Roots, Issues, Challenges, and Benefits. Boca Raton, FL: CRC Press.Google Scholar