Reference no: EM131915176

Question: Private Law for Walmart?

A portion of Walmart's Ethical Standards Program demands employee welfare throughout its vast supply chain: We do not own, operate, or manage any factories. Instead, we purchase merchandise from suppliers located in more than 60 countries. Our Ethical Standards team is dedicated to verifying that these supplier factories are in compliance with our Standards for Suppliers. These standards cover compliance with local and national laws and regulations governing compensation, hours of labor, forced/prison labor, underage labor, discrimination, freedom of association and collective bargaining, health and safety, environment, and the right of audit by Walmart Stores, Inc.35 Law professor Larry Cata Backer argues that Walmart and other global giants are effectively legislating their own private law in the form of contract and business relationships and ethics standards governing product quality, working conditions and similar matters. Walmart's Standards for Suppliers are the core of its global governance system that, according to Backer, is "an important emerging phenomenon: the development of efficient systems of private law making by nongovernmental organizations that sometimes supplement, and sometimes displace traditional legal systems."36 Working with the media, nongovernmental organizations (NGOs), consumers, and investors, Walmart and other multinationals, Backer argues, are beginning to build independent mechanisms for efficient regulation of economic behavior on a global scale that may lead to systems of law beyond governments and moderated largely by stakeholders.37

Should we welcome and encourage the development of a private law system enforced through contractual and ethical standards by giant multinationals, or should we be concerned that strengthened, strictly enforced private law arrangements would place too much authority in the hands of already powerful organizations? Explain.