Abstract
The issue of “conflict minerals” – the specific minerals economically benefitting armed groups in defined areas through international trade – has recently been raised. Related regulations include voluntary codes formulated by industries, regulations developed in progress in the European Union, and also the U.S. law, which is currently the only domestic law regulating the use and disclosure of conflict mineral. However, the U. S. legislation has caused vast reactions both in and outside the U. S., especially in several countries which rely on high-technology exports, including Taiwan, concerning they may also need to comply with the rule. This situation has reflected the fact that nowadays supply chains in many industries have already spread into multiple countries; therefore, it is necessary for those enterprises, which are regulated either by laws or voluntary regulations, to request cooperation from their foreign suppliers. This kind of “regulation” exercised by enterprises through supply contracts, is considered to be viewed as a type of private governance through the transnational private regulation scheme. Also, from their suppliers’ point of view, when the suppliers are regulated by their buyers, they may be also indirectly regulated by the foreign laws or international regulations imbedded in the supply contract; in this context, supply chains have become a kind of medium transplanting regulations, and are considered that they probably have generated a kind of “legal transplant” in a broader sense. In the empirical study part, this study takes the effects on Taiwanese industries generated by conflict minerals-related regulations as an example of the “legal transplant through supply chains”. A certain proportion of participants in our study have been complying with conflict mineral regulations, and the most common incentive among them is being required by their buyers. In other words, those companies have changed their conduct because of supply relationships, under foreign laws or voluntary codes which may not necessarily regulate those companies directly. Furthermore, those participants complying with conflict mineral regulations are mostly also requiring cooperation from their own suppliers, which might imply that the regulatory effects would be continuously transmitted down through the supply chains. In the context of private governance, it may present a phenomenon that regulations may have even broader impact through the spread of supply chains. Although the participants may not represent the whole industries in Taiwan, however it may exemplify that the legal transplant in a broader sense through supply chains is probably taking place in Taiwan. Also, the example in this study may again show that in some fields such as corporate social responsibility, not only voluntary regulations may have impact on businesses’ behaviors through contract or other market power, but also those regulations may be transmitted into regions that was originally unreachable by regulators and have wider effect across boundaries.