The naked truth about private regulations in Europe - The perception of northern Italian suppliers

Abstract: Private regulation of employee rights in global production networks emerged in the early 1990s as a response by Western companies to poor working conditions in non-Western countries. This has recently changed with private regulations moving back to Western countries. Despite this return of private regulation, research has almost exclusively focused on non-Western countries and largely ignored how, for example, European suppliers and sub-suppliers perceive private regulation. This is problematic given that both the horizontal and vertical dimensions of global production networks influence private regulation. In order to fill this gap, we investigated the Swedish clothing company Nudie Jeans Co’s network in Italy with focus on how nine sub-suppliers perceive private regulation. Our findings indicate that the perception of private regulations is positive thanks to Italy’s strict public regulatory system and how auditors have adapted their factory audits to the Italian setting. They also show that the opinions of the sub-suppliers differ depending on the resources, value adding activities and number of clients. Lastly, although the sub-suppliers understand the necessity of having private regulations, the current system is not efficient since its benefits are not equal to the time and money spent on it.