Labor Laws Transplantation Made By Multinational Purchaser Through Contracts

Since the nineties of last century, multinational buyers have developed supplier codes of conduct to check the supplier's social responsibility. If the factory fails to comply with the supplier codes of conduct requested by the buyers, the factory may face the risk of losing orders. Terms on the supplier codes of conduct come from the laws of the buyers'country and international conventions where they are not clearly prescribed by the laws of suppliers'country or they are not well implemented even they are provided for.The supplier code of conduct is a form of unofficial legal transplantation and it covers more legal departments. The codes mainly contain labor laws and gradually absorb the laws on environmental protection, intellectual property protection, fire safety and anti-terrorism. The social responsibility movement changes the consumer's product preferences in developed countries. And then, these preferences spread to the global buyers and suppliers through the market mechanism. Since the public legal department can not effectively solve the situation of relatively low labor standards in developing countries, buyers choose the supplier codes of conduct as an alternative mechanism. With the further development of the supplier codes of conduct, SA8000, a uniform standard of social responsibility has come into being. Suppliers in developing countries have progressively taken collective action to improve their business image. CSC9000T is achievement of collective action of China's textile industry. Thus, the supplier codes of conduct will finally transmit to developing countries'official actions, affecting developing countries'legislation and law enforcement.After the description and the analysis of the transplantation, this paper reviews the literatures on labor standards and trade, legal transplant and legal completeness and the effects of legal transplant. On this basis, this paper builds mathematical models of economics, and takes the system of labor law as a component of workers economic welfare to analyze the relationship between market equilibrium and labor legal transplant.Conclusion is drawn as follows. First, changing in consumer preferences is a driving factor in legal transplant through international procurement contracts. Second, the code of conduct is an alternative mechanism chosen by the international buyers within imperfect rules of law in developing countries. Third, changes in labor law are synchronized with the socio-economic progress. The deviation from the optimal evolution path of the legal changes may result in worsening the situation of workers. Thus, we should gradually improve the national system of labor laws to fall in line with internationally accepted standards. Furthermore, the government should focus on enhancing the labor production skills, increasing marginal production capacity.