Civil Society, the Moral Economy and Horizontal Governance: The Fishing Gvc and New Zealand

Introduction

This paper is primarily empirical in focus, in that it addresses in a particular location and sector the local interaction of actors involved in, first, the governance of, and, second, the  monitoring of, a global value chain. The location is New Zealand, and the sector is fishing.

The case is interesting in that a combination of local pressures, combining with knowledge and networks gained at the international level, brought about strong legislative intervention at national level in order to moderate substantially labour exploitation in the value chain. Moreover, the case highlights a clash within the governance of the value chain, particularly between fractions of capital, the one promoting a positive upgrading of labour standards (in which moral argument is conflated with economic rationality), the other applying a narrow business frame of reference in which labour standards are subordinated to the profit criterion.

The clash between these two views – between a composite CSR/moral/economic rational vision and a strictly economic rational (business) vision – was played out as a result of public pressure and visibility created by a combination of NGO and public pressure, and academic research. Government was forced to intervene in the GVC at the local level as a result of that pressure, in the interests of the upgrading fraction. Further complexity arises in the case for, in other contexts, the upgrading fraction in fishing takes a different line in other value chains in which it operates, and the government has taken a markedly different position on labour standards in other value chains.

The Issues

The analytical questions addressed in this paper concern, first, horizontal rather that vertical dimensions of GVC governance; second, contestation between actors within that horizontal layer; third, the role of CSR in that contestation. From its inception, the GVC approach in its various guises has focused primarily on the vertical governance of value chains. The horizontal governance of those chains, and the role of regulatory institutions in that governance, is a later concern. The recognition that horizontal institutional pressures beyond companies and government – trade unions, NGOs, research, media campaigns, for example - may play a part in defining governance outcomes follows. Important questions follow from the identification of these pressures. For example, are they effective in the longer term? Do they promote or extend CSR practices at company level? Are they capable of being extended vertically in the chain?

Contestation of the horizontal governance of GVCs is now also a focus of analysis. Interest is shown in the impact of domestic economic and political settings, of NGOs and local political campaigns in civil society, and the consequent responses by companies to self-regulate by means of CSR initiatives in order to respond to such pressures. We can understand this is the broad context of civil society demanding the implementation of standards, which may, or may not, be internalised in a CSR practice.

The impact of horizontal governance pressures on CSR adoption is an important, but difficult, issue. We cannot assume that horizontal pressures will promote or consolidate sustained (and moral) CSR behaviours. More importantly for this case, the conflation of economic rationality with CSR concerns begs the question: may imposed (regulated) CSR behaviours be appropriated and subjugated to economic rationality as a default outcome at the expense of expressed civil morality?

The Case

In July 2011, following a public outcry about labour conditions in the Foreign Charter Vessel sector, the New Zealand government announced a Ministerial Inquiry. The Inquiry’s panel was commissioned with investigating whether foreign owned and flagged vessels fishing in New Zealand’s waters supported government objectives, particularly in regards to equitable labour standards. The findings were released in February 2012 and in May the same year the government announced that all foreign vessels fishing in New Zealand waters must be reflagged as New Zealand vessels by 1 May 2016, in order to bring them under New Zealand labour, health and safety laws and place accountability directly with the New Zealand charterer. In order for reflagging to become law, the Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill was announced in October 2012 and enacted in August 2014.

Exploitative working conditions aboard FCVs were first identified in Parliament in the 1990s. In response, the New Zealand government reformed the Fisheries Act (1986) to ensure that the Minimum Wage Act 1983 and the Wages Protection Act 1983 applied to foreign crew on FCVs. Amendments were incorporated in the Fisheries Act (1996), which replaced the 1986 Act. Despite the Act requiring that foreign crew be paid the New Zealand minimum wage, enforcing this provision was problematic. Claims of exploitative working conditions aboard FCVs continued to surface over the next two decades, highlighting the inadequacy of the Fisheries Act (1996) in protecting migrant workers. In 2004, further investigation began, leading to the introduction of a voluntary Code of Practice in 2006 along with a new immigration policy pertaining to the issuing of crew visas. The failure of the Code to improve work conditions was shown in rigorous academic research which, coupled with NGO pressure, support from parliamentarians and a popular campaign reflected widely in media coverage, gave rise to the 2014 legislation.

The Discussion

The paper will conclude with a discussion of the following issues:

1. What were the characteristics of the moral economy promoted by the campaign for improved labour conditions in the FCV sector?

2. To what extent did the enacted legislation meet the campaign’s expectations?

3. What was the motivation for government to respond to the campaign by intervening in the regulation of the domestic aspects of the GVC?

4. To what extent was CSR advanced by the campaign and its legislative impact, and to what extent was CSR appropriated by, and subjugated to, a sectional economic (business) rationale during the campaign?