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Can Due Diligence Laws pay out for workers? – Effects of Regulation Design and Contextual Factors for the Indian Apparel Industry

Globalisation
Human Rights
India
Regulation
Transitional justice
Stefanie Lorenzen
Berlin School of Economics and Law
Artemisa Ljarja
Berlin School of Economics and Law
Stefanie Lorenzen
Berlin School of Economics and Law

Abstract

Abstract With the objective of increasing environmental and social sustainability globally, national and regional human rights and environmental due diligence laws (HREDD laws) have been adopted, as the German Supply Chain Due Diligence Act, 2021 (GSCDDA) and the. EU Corporate Sustainability Due Diligence Directive (CSDDD), 2024. Currently they are supplemented by EU laws restricting access to the EU market, if importers cannot show due diligence in the production process, e.g. the EU Forced Labour Regulation, 2024. Some analyses of HREDD laws exist, based on the design of the laws. This paper compares possible effects of HREDD and import restricting due diligence laws, using the apparel sector as an example. Also, it connects these findings to GVC and trade regulation analysis as contextual factors influencing the effective application of due diligence laws for workers in producing countries. For the example of the apparel industry in India GVC literature shows little economic and social upgrading in a „market despotic“ system of industrial relations with weak trade unions. Trade regulation research suggests that the effective implementation of extraterritorial due diligence laws depends strongly on the trade volume between countries. This paper discusses how the GVC and trade settings could influence the implementation of the new due diligence laws for workers in the apparel industry in India, and whether the laws in turn can reinforce worker strategies pushing for labour governance mechanisms with gains for workers.