Going Green – Entering a Judicial Grey Zone? Corporate Social Responsibility and the Shipping Business

Abstract: Corporate Social Responsibility (CSR) has during the last decade become an increasingly relevant concept. Most Multinational Enterprises (MNEs) have formulated Corporate Codes of Conduct, and many have also joined international initiatives focusing on CSR, such as the United Nations Global Compact. Through globalisation, deregulation, paradigm shifts and not least the development of information technology; consumer awareness has increased and brand equity has become essential to MNEs. Translated to the shipping business, as more consumers consider e.g. environmental features important in their purchasing decisions, shippers and carriers alike in the maritime chain of responsibility have a keen interest in communicating the “green” attributes of their products and services. Although CSR-measures largely are voluntary and non-binding, there are regulatory frameworks covering the making and keeping of promises, such as contract and market law, and by being brought into and activating such frameworks; CSR-measures may confer legal implications. The purpose of the thesis is to explore the wider legal implications of CSR, with focus on the environmental aspect, as applied to the shipping business. It intends to present a bird’s eye view of the topic to the legal layman as well as to the legal reader; to serve as legal overview to the shipper or carrier, and to give the jurist an insight into the shipping business. The thesis initially outlines the history, development and various concepts of CSR, highlighting motives and stakeholders and exemplifying international initiatives. The findings are then applied to the shipping business, elucidating the significance of CSR for shippers and carriers; also discussing the general status of CSR-measures as constituting soft law. Within this framework, with a starting point in a business transaction concluded in Sweden, the possible legal implications of CSR-measures under English and Swedish contract law are explored, in terms of interpretation and breach of contract, outlining available remedies. Using the example of an environmental commitment-clause in a transportation framework agreement, the investigation suggests that, depending on the actual circumstances of the case in question, contractual liability may arise. Further, the possible legal implications of CSR-measures under Swedish market law are investigated, focusing on marketing practices, unfair commercial practices and outlining available sanctions. Due to its influence on Swedish market law, a comment is also made on European Union (EU) market law. Using the example of a carrier marketing its environmental commitment towards a shipper, the investigation suggests that, depending on the actual circumstances of the case in question, misleading marketing practices may be at hand. The comparative comments in the summarising analysis indicate that under English contract law, parties need to look after their own interests to a greater extent than under Swedish contract law. Similarly, comparative comments on EU and Swedish market law highlight the greater protection of not only consumers, but also companies, under the latter. The concluding discussion as to the future legal status of CSR, especially as applied to the shipping business, suggests enforcement and enhancement of already available legal systems and organs as a viable alternative; leading to common guidance on concepts and methods of implementation, and removing uncertainty as to legal status.