- New Horizons in Management series
Edited by Michael Barry and Adrian Wilkinson
Chapter 18: Regulating Global Capital through Public and Private Codes: An Analysis of International Labour Standards and Corporate Voluntary Initiatives
18 Regulating global capital through public and private codes: an analysis of international labour standards and corporate voluntary initiatives Tony Royle INTRODUCTION An increasingly important influence on the way in which employment relations are played out in different countries is the impact of global capital and the activities of multinational corporations (MNCs). No national economy is completely insulated from global capital flows and this has become increasingly the case since the deregulation of the stock market and opening up of the global economy since the late 1980s. However, this is not a new phenomenon; as early as the eighteenth century it was recognized that countries with higher labour standards may be at a disadvantage to those countries with lower standards and this could put pressure on states to lower their labour standards accordingly (Hepple, 2005). Existing variations in national labour standards reflect different stages of development, differing industrial relations systems and welfare systems, which are subject to varying historical trajectories and different structural, political, economic and cultural factors. Part of the solution to this problem would be to try to achieve the same minimum levels of pay and conditions of work for all workers across the globe through a set of internationally recognized and effectively enforced international labour standards. However, this proposition is extremely difficult in practice; developing countries’ main competitive advantage in attracting foreign investment may be based on having relatively low standards and nation states are often averse to giving up any sovereignty to international institutions and, especially...
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