Panel Paper: Environmental Governance through Supply Chain Management: The Semiconductor Industry as a Case Study

Friday, November 9, 2012 : 1:00 PM
Poe (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Daniel Fiorino and Manjyot Bhan, American University

Twenty years ago, a discussion of environmental regulation and the broader concept of environmental governance would have focused entirely on the role of government. Through laws like the Clean Air Act and Toxic Substances Control Act, regulation forced accountability on private firms. In the last few decades, the institutional landscape for environmental governance has changed. Public regulation still may dominate, but it is complemented by institutional developments and practices that illustrate the concept of “government without governance.” Public policy literature until quite recently focused on the benefits of the public sector collaborating horizontally across national, sub-national, regional and local governments. Some recent focus has shifted to studying collaboration vertically across the private and non-governmental sector. However, the literature has given less attention to collaboration within the private sector, especially across its supply chain.

One category of private sector governance that has drawn attention is industry certification programs like Responsible Care or the Sustainable Forestry Initiative and partnerships among firms and non-governmental organizations, such as the Forest Stewardship Council and Marine Stewardship Council. These programs establish collaborative relationships, either between private firms or among firms and other organizations, that create private (i.e., non-governmental) regulatory regimes. However, private firms with market leverage have increasingly engaged in supply chain management as a form of private regulation, one that illustrates a form of collaborative governance.

Our case for the analysis is the effects of supply chain requirements on chemical uses in the semiconductor industry. The existing literature focuses largely on regulatory pressures affecting chemical use, and secondarily on third-party certification programs. However, our work with the semiconductor industry as well as the business literature shows that supply chain pressures play a major role in determining responsible chemical management for an industry. These pressures come in the form of product disclosures, restrictions on chemical use, and end-of-life responsibility, among others.

This paper builds on data from a series of interviews and an dialogue session convened by the authors to analyze the effects of supply chain management on chemicals use and innovation; the comparisons with government regulation, in terms of the opportunities for collaboration, throughout the supply chain; and the perceptions within industry of the differences between public private sector regulation. Among the findings are that supply chain relationships may be as significant a source of pressure as government regulation; that consultation within the supply chain is ad hoc and a source of uncertainty; and that the sources of supply chain pressures often lack an understanding of the complexities of chemical use within the semiconductor industry. The intent of the paper is to propose a framework for analyzing supply chain managements as a form of collaborative governance.

Full Paper: