Over the past decade and a half, private sector actors have developed innumerable environmental and social standards whose stated intention is to further global public interests, such as sustainable development in less developed countries (LDCs). While some authors have welcomed these standards as a means of addressing transnational problems that governments are ill-equipped to deal with, others argue that these standards often amount to little more than a public relations exercise, with private actors producing high-minded standards on paper but failing to enforce them in practice.

This paper critically explores how to implement changes to corporate behavior in regard to labor-related issues through codes of conduct (“code” or “codes”) that would strengthen the rights of workers. The corporation essentially allows for its own reformation from within. There are many ways the link between corporate governance or corporate social responsibility (“CSR”) and workers' rights can be explored. The term CSR is used to differentiate from the alternate shareholder primacy model of a corporation existing solely for its shareholders and to increase profit. It stands for the idea that corporations have duties to other stakeholders beyond shareholders. Those stakeholders include, but are not limited to, employees and those who produce goods and provide services, environmental agencies, and government. Codes are a soft law mechanism that may be used to create a voluntary standard or set of rules to which corporations are bound. While this may be viewed as rather insubstantial compared to legislation, codes have value in terms of allowing the two (or more) parties that are bound by the code to have direct input in drafting the code. While the inherent imbalance of power involved in the dynamics of the employment relationship between management and workers must be acknowledged and must have an impact on the creation of the code, it does allow for involvement at a level which legislation does not. Part two of this paper examines governance models, Part three discusses codes of conduct as a private regulatory framework, and Part four shows how monitoring agencies are used to ensure compliance with codes.

A market economy is not a product of free economic behavior but rather, of an order requiring the fulfillment of systemic tasks by market operators. Their performance needs to be guided by rules imposing competition as a political tool to functionalize their action, in such a way that market failures can be avoided. This is not only the case for coordinated market economies, typically making use of direct market regulations, but also for liberal market economies, even if these latter ones prefer an indirect regulation of economic life, by having to condition individual behavior. Different modes of regulation may be used to stabilize the same accumulation regime, which is understood as patterns of production and consumption reproducible over a long period. In other words, liberal market ideology, as well as liberalism, is anything but a theory on unlimited freedom: it “needs freedom”, but also needs to “consume” this freedom as a condition of historical and social possibilities for a free market economy. Even if differences may involve the way of assuring those possibilities, the necessity to force economic behavior into functionalizing schemes must be seen as unavoidable.