The Role and Liability of Certification Organisations in Transnational Value Chains

Certification organisations have become important players in the monitoring of compliance by operators, in particular, from developing countries with social and environmental standards. At the same time, some of the worst disasters in recent years, such as the Ali Enterprises factory fire in Pakistan or the collapse of the Rana Plaza building in Bangladesh, occurred after the relevant operators had been certified for their compliance with standards; which raised doubts about the care that the relevant certification organisation exercised. This article explores potential grounds on which CSR certification organisations may incur liability towards third parties, in particular employees of subsidiaries or suppliers. To this end, it discusses the functions of certification generally before it analyses the potential liability of certification bodies under German and English law. It thereby considers various circumstances under which certification takes place, including certification that is required by law, certification that is required to obtain certain benefits, such as tax reduction, certification within private CSR schemes and the entirely voluntary use of CSR certification as an instrument of supply chain control