The Politics of Sustainable Supply Chains: Brazilian Industry Associations as Agents in Private Governance

Complex global governance systems often emerge as the result of political-strategic disputes between multiple interest groups. Private governance, for example, is not a merely technical and problem-solving phenomenon independent of politics but rather the outcome of power struggles between a wide range of state and non-state actors. The private governance literature and its interactions with the global value chain/production network (GVC/GPN) approaches have focused extensively on lead firms. And, more recently, growing academic attention has been devoted to public-private interactions, thus bringing the state back into the analysis. Industry associations, however, are key actors that are still overlooked and undertheorized. Industry associations are relevant players in public-private and local-global interactions and can have a significant influence on the design and implementation of value chain sustainability governance. Based on this, I develop a theoretical framework that puts industry associations at the center of the analysis and focuses on why and how they shape the private sustainability governance of value chains. My argument is that industry associations’ agency needs to be understood in relation to their position at the intersection of bottom-up and top-down commercial and governance-related pressures as both regulatory intermediaries (of which there is expanding literature) and as actors who must respond to changing factors at the producer and buyer levels. I apply my theoretical framework in exploratory cross-case comparisons between Brazilian soy and sugarcane industries and resort to process tracing to explain the agency of national industry associations. By recognizing that conflicting interests and demands around non-deforestation rules drive and shape how selected Brazilian industry associations influence private sustainability arrangements, this qualitative research contributes to a better understanding of value chain governance in emerging economies. This is especially important in a polycentric trade era. And the focus on the collective action of national interest groups can help both public and private sustainability programs update their strategic decisions to improve on-the-ground impacts. Although my theoretical and empirical investigations focus on private governance, I also discuss how my findings might apply to an increasing number of mandatory state-led supply chain regulations that are recently emerging and being incorporated into our complex and still in the making system of legal and regulatory pluralism.