Law and welfarism in digital global value chains: a critical analysis of the implementation of enhanced downstream workers' rights in Kenya

Abstract

The rapid rise of technology has transformed the labour market, notably through the creation of digital global value chains. Traditional liability doctrines fail to protect downstream workers due to the absence of a formal employer- employee relationship, as well as limited proximity and control. Consequently, these workers lack the legal protections and reliefs enjoyed by employees in comparable traditional industries. Tort reformists argue that rather than the employment relationship, corporate liability should be attributed based on networks and connections to the harm, which would allow Multinational Companies to bear responsibility for production practices throughout their value chains. However, in imposing such regulations, it is necessary to account for the complexities introduced by digital markets and the fragmented organisational structure of globalised firms. Given these complexities, this study argues for a sui generis liability framework. State-based interventions in digital markets are often limited due to the dynamic nature of these markets, which creates information asymmetries and regulatory uncertainty, potentially leading to inappropriate regulation, deterring investment and hindering economic growth. Private regulation, driven by industry expertise, can offer more efficient solutions. However, it faces challenges in enforcement and compliance due to firms' profit-driven nature, prioritising self-interest. A public-private regulatory approach thus emerges as the most effective solution by bridging the respective strengths and weaknesses of private and public regulation. This study employs a doctrinal methodology complemented by a comparative analysis of the European Union’s Corporate Sustainability Due Diligence Directive to answer the question of how to sufficiently protect downstream digital workers. The discussion proposes the Environment, Social and Governance standards as a potential regulatory model. The voluntary nature of the standards allows for flexible, market-driven solutions whereas the state exercises oversight through monitoring reporting.