The Juridification of Business Ethics 3031399072, 9783031399077

Table of contents :
Acknowledgements
Contents
Chapter 1: Introduction
1.1 Introduction to the Problem
1.2 Focusing the Problem into Research
1.3 The Division of this Research into Sub-studies
1.4 Discourse on Method
1.4.1 Introduction to Ontology, Epistemology, and Methodology
1.4.2 Ontology, Epistemology, and Methodology Applied
1.5 Limitations
1.6 The Question Concerning Business Ethics
References
Chapter 2: The Camera Iuridica
2.1 Introduction
2.2 The Standard View on the Relationship Between Business Ethics and Law
2.2.1 Reinforcement, Complementarity, and Opposition
2.2.2 The Contents of Business Ethics and Law
2.2.3 The Procedures of Business Ethics and Law
2.2.4 The Functions of Business Ethics and Law
2.3 The Juridification of Business Ethics
2.4 Critical Business Ethics Studies
2.4.1 Foucault’s Protest Against Ethics and Law
2.4.2 A Legally Thought Business Ethics
2.4.3 An Ethically Thought Business Ethics
2.5 The Eternal Impasse of Business Ethics?
References
Chapter 3: The Juridical Disclosure of Ethics in the Netherlands and Indonesia
3.1 Introduction
3.2 The Legal Origins of ‘Reasonableness and Fairness’
3.3 The Historical Evolution of Dutch and Indonesian Law
3.4 The Meaning of Reasonableness and Fairness: The Netherlands
3.4.1 The Law: Companies and Contracts
3.4.2 Functions of Reasonableness and Fairness
3.4.3 The Reasonableness and Fairness Norm in Contract Law
3.4.4 The Reasonableness and Fairness Norm in Corporate Law
3.5 The Meaning of Reasonableness and Fairness: Indonesia
3.5.1 The Law: A Pluralistic Perspective
3.5.2 Historical Perspective: Decolonization
3.5.3 Reasonableness and Fairness in the Law
3.5.4 Jurisprudence Concerning ‘Unlawful Acts’
3.5.5 Jurisprudence Concerning Contract Law
3.5.6 Jurisprudence Concerning Corporate Law
3.5.7 New Legislative Developments
3.6 Discussion: A Critical Legal Study of Open Norms
3.7 Final Remarks
References
Chapter 4: Ethics as the Regulation of the Self
4.1 Introduction
4.2 The Term Self-Regulation
4.3 Self-Regulation as Autonomy
4.4 Performance Accountability to the Principal
4.5 Self-Regulation as Heteronomy
4.6 Juridification of the Corporate Governance Code
4.7 Ethics in Self-Regulation
References
Chapter 5: Dispute Resolution as an Ethical Phantasm
5.1 Introduction
5.2 Trans-Formation and Trans-Portation of Disputes
5.3 Alternative Justice as Law Opposing Myth
5.4 Colonization of Alternative Justice
5.5 From Shape-Less to Shape-Ness
5.6 The Fall of Ethics by Legal Homology
References
Chapter 6: New Materialism in Business Ethics
6.1 Introduction
6.2 Juridical Forms in Business Ethics
6.3 The Ethics of Posthuman Performativity
6.4 The Disciplinary Apparatus in Business Ethics
6.5 A Posthuman Approach to Critical Business Ethics
Appendix
References
Chapter 7: Business Ethics on Its Last Legs
7.1 Introduction
7.2 The Current Situation: A Leg After Amputation
7.3 Ethical Considerations
7.4 Legal Considerations
7.5 The Indifference of Technology
7.6 Postlegomena: The Negative Being-in-the-World in the Mode of Violence
References
Chapter 8: Conclusions and Final Remarks
8.1 A Final Introduction
8.2 Conclusions
8.2.1 Conclusions from the Sub-studies
8.3 Final Remarks
References
References
Index

Citation preview

Bart Jansen

The Juridification of Business Ethics

The Juridification of Business Ethics

Bart Jansen

The Juridification of Business Ethics

Bart Jansen Department of Philosophy New York University New York, New York, USA

ISBN 978-3-031-39907-7    ISBN 978-3-031-39908-4 (eBook) https://doi.org/10.1007/978-3-031-39908-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Entering into the Reasoning Power, forsaking Imagination | They became Spectres; & their Human Bodies were reposed | In Beulah, by the Daughters of Beulah with tears & lamentations | The Spectre is the Reasoning Power in Man; & when separated | From Imagination, and closing itself as in steel, in a Ratio | Of the Things of Memory. It thence frames Laws & Moralities | To destroy Imagination! the Divine Body, by Martyrdoms & Wars. William Blake, Jerusalem: The Emanation of the Giant Albion, 1820, 74, 7–13. Les sciences sociales, humaines et gestionnaires, les sciences biologiques et médicales (si entreprenantes dans le domaine des filiations) sont de nos jours un discours normatif, un juridisme qui s’ignore et dont les effets sur le plan symbolique, étant massifs, doivent être soumis à la critique. En enfermant l’interprète, particulièrement le juge, dans le carcan scientiste, nous touchons aux fondements institutionnels de la parole ; dans ces conditions, le Droit participe en toute innocence à la désinstitution des nouvelles générations. Pierre Legendre, Leçons VI, éd. Fayard, 1992, p. 359.

For Jo

Acknowledgements

I would like to thank my colleagues Ronald Jeurissen, Tineke Lambooy, Faizal Kurniawan, and Annida Aqiila Putri with whom I collaborated on an earlier version of Chaps. 2 and 3. In addition, earlier versions of the Chaps. 2, 3, 5, and 6 have appeared in the journals Ethical Perspectives (2022), International and Comparative Corporate Law Journal (2021), Tijdschrift voor Financieel Recht (Dutch Journal of Financial Law, 2018), Philosophy of Management (2021a), and International Journal of Management Concepts and Philosophy (2021b), respectively. A word of thanks also goes out to my colleagues at the Center for Entrepreneurship, Governance & Stewardship at Nyenrode Business University, in particular the ‘village des irréductibles juristes’ within this center, to the members of the Nyenrode Corporate Governance Institute, all of whom have involved me so outstandingly in their research and teaching. In addition, I thank my colleagues from the departments of Jurisprudence, Philosophy of Law, and Moot Court and Advocacy at my alma mater Leiden University, where I have enjoyed teaching immensely and where I have forged many close friendships. The same goes for the department of Jurisprudence and the Paul Scholten Centre for Jurisprudence at the University of Amsterdam. A very special word of gratitude goes to Agnes Schreiner, my former office mate at the Oudemanhuispoort and Campus Roeterseiland, who, at a time of need, provided me with ways to avoid the dialectics of meaning when it started to bore me heavily and deeply. Every autumn my dear colleague Rosalien van’t Foort-Diepeveen and I have had the pleasure of being invited to the Airlangga University in Surabaya, Indonesia, as guest lecturers. When looking back over the past four years, I realize that the archipelago has brought me so many joyful experiences and precious memories. I especially thank Faizal Kurniawan, Prawitra Thalib, and Annida Aqiila Putri for their unbounded hospitality and hope we will be able to continue our collaboration in the years to come. I also thank my colleagues from the European Union funded project Sustainable Market Actors for Responsible Trade (SMART) for their great teamwork in Bangladesh, India, Indonesia, Norway, Turkey, and Vietnam, in particular my dear colleague Martine Bosman. ix

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Acknowledgements

Furthermore, I would like to thank my friends Mark van Roosmalen and Rogier Baart. Five years ago, Mark was the first person to make Rogier and myself question the legal and ethical implications of the ownership of amputated limbs. This led to one of my favorite research projects, ‘Am I My Leg?’, an endeavor for which Rogier and I received so much invaluable support along the road. Finally, I would like to express gratitude towards my parents’ ongoing support and pay tribute to my significant other, Johanna Rietveld, for her loving presence and inspiring absence.

Contents

1

Introduction����������������������������������������������������������������������������������������������    1 1.1 Introduction to the Problem��������������������������������������������������������������    1 1.2 Focusing the Problem into Research������������������������������������������������    2 1.3 The Division of this Research into Sub-studies��������������������������������    3 1.4 Discourse on Method������������������������������������������������������������������������    6 1.4.1 Introduction to Ontology, Epistemology, and Methodology������������������������������������������������������������������    6 1.4.2 Ontology, Epistemology, and Methodology Applied������������    8 1.5 Limitations����������������������������������������������������������������������������������������   12 1.6 The Question Concerning Business Ethics ��������������������������������������   12 References��������������������������������������������������������������������������������������������������   16

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 he Camera Iuridica ������������������������������������������������������������������������������   19 T 2.1 Introduction��������������������������������������������������������������������������������������   19 2.2 The Standard View on the Relationship Between Business Ethics and Law������������������������������������������������������������������   20 2.2.1 Reinforcement, Complementarity, and Opposition��������������   21 2.2.2 The Contents of Business Ethics and Law����������������������������   23 2.2.3 The Procedures of Business Ethics and Law������������������������   25 2.2.4 The Functions of Business Ethics and Law��������������������������   27 2.3 The Juridification of Business Ethics������������������������������������������������   28 2.4 Critical Business Ethics Studies�������������������������������������������������������   30 2.4.1 Foucault’s Protest Against Ethics and Law��������������������������   30 2.4.2 A Legally Thought Business Ethics��������������������������������������   31 2.4.3 An Ethically Thought Business Ethics ��������������������������������   34 2.5 The Eternal Impasse of Business Ethics? ����������������������������������������   35 References��������������������������������������������������������������������������������������������������   36

3

The Juridical Disclosure of Ethics in the Netherlands and Indonesia ������������������������������������������������������������������������������������������   41 3.1 Introduction��������������������������������������������������������������������������������������   41 3.2 The Legal Origins of ‘Reasonableness and Fairness’����������������������   43 xi

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Contents

3.3 The Historical Evolution of Dutch and Indonesian Law������������������   44 3.4 The Meaning of Reasonableness and Fairness: The Netherlands��������������������������������������������������������������������������������   47 3.4.1 The Law: Companies and Contracts ������������������������������������   47 3.4.2 Functions of Reasonableness and Fairness ��������������������������   48 3.4.3 The Reasonableness and Fairness Norm in Contract Law����������������������������������������������������������   50 3.4.4 The Reasonableness and Fairness Norm in Corporate Law��������������������������������������������������������   52 3.5 The Meaning of Reasonableness and Fairness: Indonesia����������������   53 3.5.1 The Law: A Pluralistic Perspective ��������������������������������������   53 3.5.2 Historical Perspective: Decolonization��������������������������������   54 3.5.3 Reasonableness and Fairness in the Law������������������������������   54 3.5.4 Jurisprudence Concerning ‘Unlawful Acts’��������������������������   55 3.5.5 Jurisprudence Concerning Contract Law������������������������������   56 3.5.6 Jurisprudence Concerning Corporate Law����������������������������   57 3.5.7 New Legislative Developments��������������������������������������������   58 3.6 Discussion: A Critical Legal Study of Open Norms ������������������������   58 3.7 Final Remarks ����������������������������������������������������������������������������������   61 References��������������������������������������������������������������������������������������������������   63 4

 thics as the Regulation of the Self��������������������������������������������������������   67 E 4.1 Introduction��������������������������������������������������������������������������������������   67 4.2 The Term Self-Regulation����������������������������������������������������������������   69 4.3 Self-Regulation as Autonomy ����������������������������������������������������������   71 4.4 Performance Accountability to the Principal������������������������������������   73 4.5 Self-Regulation as Heteronomy��������������������������������������������������������   74 4.6 Juridification of the Corporate Governance Code����������������������������   75 4.7 Ethics in Self-Regulation������������������������������������������������������������������   76 References��������������������������������������������������������������������������������������������������   78

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 ispute Resolution as an Ethical Phantasm������������������������������������������   81 D 5.1 Introduction��������������������������������������������������������������������������������������   81 5.2 Trans-Formation and Trans-Portation of Disputes����������������������������   84 5.3 Alternative Justice as Law Opposing Myth��������������������������������������   85 5.4 Colonization of Alternative Justice ��������������������������������������������������   88 5.5 From Shape-Less to Shape-Ness������������������������������������������������������   91 5.6 The Fall of Ethics by Legal Homology��������������������������������������������   92 References��������������������������������������������������������������������������������������������������   93

6

 ew Materialism in Business Ethics������������������������������������������������������   97 N 6.1 Introduction��������������������������������������������������������������������������������������   97 6.2 Juridical Forms in Business Ethics ��������������������������������������������������  100 6.3 The Ethics of Posthuman Performativity������������������������������������������  103 6.4 The Disciplinary Apparatus in Business Ethics��������������������������������  105 6.5 A Posthuman Approach to Critical Business Ethics ������������������������  108

Contents

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Appendix����������������������������������������������������������������������������������������������������  109 References��������������������������������������������������������������������������������������������������  110 7

 usiness Ethics on Its Last Legs ������������������������������������������������������������  113 B 7.1 Introduction��������������������������������������������������������������������������������������  113 7.2 The Current Situation: A Leg After Amputation������������������������������  114 7.3 Ethical Considerations����������������������������������������������������������������������  117 7.4 Legal Considerations������������������������������������������������������������������������  118 7.5 The Indifference of Technology��������������������������������������������������������  119 7.6 Postlegomena: The Negative Being-in-the-World in the Mode of Violence��������������������������������������������������������������������  120 References��������������������������������������������������������������������������������������������������  122

8

 onclusions and Final Remarks ������������������������������������������������������������  123 C 8.1 A Final Introduction��������������������������������������������������������������������������  123 8.2 Conclusions��������������������������������������������������������������������������������������  124 8.2.1 Conclusions from the Sub-studies����������������������������������������  124 8.3 Final Remarks ����������������������������������������������������������������������������������  127 References��������������������������������������������������������������������������������������������������  129

References ��������������������������������������������������������������������������������������������������������  131 Index������������������������������������������������������������������������������������������������������������������  147

Chapter 1

Introduction

No one will ever be able to transfer his power and (consequently) his right to another person in such a way that he ceases to be a human being. (Spinoza, TTP 7.1, 1670, p. 208)

1.1 Introduction to the Problem With this phrase, from his Theologico-Political Treatise (1670), Benedict de Spinoza clearly articulated what remains of a human being when he submits himself to the authority of the law. Spinoza challenges us to think of our submission to legal authority as a form of self-alienation. Because the human being under legal authority is a differentiated other of himself, a subjectum, the ethics of law is an ethics of heteronomy. In business ethics the opposite seems to be taking place: the ethics of business ethics is partly legal, and thus heteronomous. The core argument of this nomomorphology is that business ethics is suffering from juridification and may cease to exist because of it. The consequence of the juridification of business ethics is that the human being disappears into abstraction. Juridification of business ethics means that legal modes of thinking replace and subsume ethical ones. Business ethics has fallen under the spell of codes of conduct, compliance procedures, enforcement mechanisms, penalties for violations, and other quasi legal approaches. Legal thinking is increasingly used to change relationships in business. The result is a business ethics that has come more and more to resemble the law, and business ethicists who are revealed to be legal turncoats. Juridification can be an indicator of reduced confidence in business ethics, but legal thinking can also function as a substitute for a business ethics that is already in decline. In both cases there is much to be gained for business ethics. This study aims at liberating business ethics from that loss by revealing legal thinking within business ethics. Ethical codes, whether they are value based or rule based, are the most prominent within business ethics when a regulated form of ethics enters the equation. Ethical codes are adopted by corporations and organizations with a view to explaining the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_1

1

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1 Introduction

difference between right and wrong to staff members and business partners, and when seeking to make that distinction applicable to decisions taken in the working environment. In short, the ethical conduct that must be displayed in the workplace is codified in all manner of ‘juridical’ forms, as mentioned above. What these various codifying phenomena have in common is that they are known within applied ethics and legal theory as ‘voluntary ethical self-binding’, ‘self-regulation’, ‘soft law’, ‘self-determination’, ‘informal justice’ and ‘alternative justice’. This study deals with the latter term: ‘alternative justice’. In alternative justice the tension between ethics and law, on the one hand, and the redirection of ethics into law, on the other, becomes manifest. Business ethics has adopted a particular style of thinking referred to in this study as ‘legal’. In this study I diagnose and problematize this as a ‘legally thought business ethics’. Legal thinking does something to ethics and, in its wake, to ethicists. Legally thought ethics may limit itself to a discourse around rights and obligations, rendering the distinction between ethics and law negligible. When the distinction between ethics and law is negligible it is unclear what the remaining added value of ethics is in relation to the law. Ethics is in effect then legally subsumed. Legally thought ethics narrows, simplifies, and minimizes ethics to a problem solver; ethics thus becomes a procedure that substitutes complex reality for simple causality. This simple ethics brings me to another possible ethogenetic reality effect. Simple ethics is incapable of accommodating the queerness, the alterity, the Other. Legally thought ethics denies the alterity and forces the concrete human being into a violent, abstract system: a legal system. At the root of this systematic legal thinking is an anthropology that differentiates the concrete human from his very being. The legally thought human can only be understood as a subject, an abstract fiction, oppressed by an abstract system of rules. This legally thought business ethics thus kneads and molds the concrete human being under the logic of a closed system of norms, is no more than a means of making humans addicted to authority and is an authority phenomenon in itself, that makes an existing norm-confirming order effective in its constitution and efficient in its compliance.

1.2 Focusing the Problem into Research The philosophical debate about business ethics is customarily concerned with the question of how ethics can be applied to actions, policies, and structures in the world of business. This application of ethics always goes hand in hand with a certain degree of formalization because abstract ethics must be formed (literally) according to the concrete situation to which it is to be applied. The main subject of this study is that this transformation inevitably brings with it idiosyncratic legal characteristics and forms. This study is thus a ‘nomomorphology’ of ethics, a study about ethics morphing into laws, that contributes to the revealing of legal characteristics in ethics. Considering all this brings us to the main question: What distinctive juridical forms can be attributed to business ethics, and what do they imply for critical

1.3  The Division of this Research into Sub-studies

3

business ethics? This nomomorphology contributes to the exposition of legal characteristics in business ethics, and thus sheds new light on phenomena that are wrongly considered by business ethicists to belong to the realm of ethics instead of that of law. The plan is to articulate and problematize this assumption of a legally thought business ethics. More precisely, I aim to address the axiological preconditions of ethics as opposed to the preconditions of law, and to consider what these preconditions mean for business ethics. Legal thinking manifests itself both in ethical casuistry and in ethical dogmatics. In the study now before you, this legally thought ethics is illuminated through several studies. The first study is an examination of the status quo of business ethics in relation to the law. It questions the nature of the relationship that these two concepts can have, in casuistry and in dogmatics. Each subsequent study embodies a ‘critique’ in the Kantian sense of the word; thus, each independent study is an ‘examination of the conditions of possibility’ of ethics within the spectrum of law and alternative justice. Ethics is successively problematized in (a) the open norm of ‘reasonableness and fairness’ in Dutch and Indonesian corporate law, (b) self-­ regulation, more specifically in the Dutch Corporate Governance Code, and (c) alternative dispute resolution (ADR) as an alternative to formal dispute resolution. A subsequent conceptual study problematizes disciplinary legal thinking within the broader discipline of business ethics. It examines whether and, if so, how legal thinking within business ethics can fundamentally weaken business ethics.

1.3 The Division of this Research into Sub-studies The sequence of the studies is further elaborated in this section. As already described, this study consists of six sub-studies which all answer a sub-question that contributes to developing an answer to the main research question. • Chapter 2 deals with the question what the relationship is between business ethics and law as promulgated in extant business ethics literature. This question is important because business ethics and law both provide frameworks for the normative assessment of business conduct. Both business ethics and law are powerful social institutions by virtue of which outcomes for businesses and their stakeholders can be controlled. Both define obligations, duties, entitlements, opportunities, limitations, and ideals for businesses and their stakeholders, but both do this differently and in ways that are not always clearly understood. The contents, methods, and functions of the two institutions are in part similar and partly different. Sometimes they act in unisono, and at other times they appear to function as opposites. An improved understanding of the relationship between business ethics and law can be helpful to decision makers in business and stakeholders in taking better decisions and developing more effective policies regarding normative issues in the business world. Within the discourse of business ethics an increasingly important role is reserved for a juridified form of business

4

1 Introduction

ethics: a tendency within business ethics to adopt legal language and argumentation can be discerned. This legally thought business ethics appears to be considered a plausible and legitimate operationalization within business ethics and propelled by its approval, this legally thought business ethics leads to the ­development and application of instruments and institutions that have unavoidably legal features. Examples include ethical codes of conduct, corporate governance codes, case histories, and alternative dispute resolution. • Chapter 3 deals with the question to what extent open norms in formal law can be interpreted ethically. For this sub-study comparative law research was conducted into the interpretation of the open norm of ‘reasonableness and fairness’ in Dutch and Indonesian corporate law. This chapter offers a perspective on the anthropo-legal background that is important for the interpretation of open norms. The comparison of reasonableness and fairness in the corporate laws of both countries is interesting because: both countries have a colonial and, therefore, ‘transplant’ relationship; both countries exhibit major cultural, economic, political, and religious differences that influence the way in which open norms are interpreted; it offers an opportunity for examining the interpretation of the same open norm in a centralistic legal system in the Netherlands, as opposed to an assumed pluralistic legal system in Indonesia; both Dutch and Indonesian corporate law have undergone a development that is partly separate from Dutch and Indonesian civil law developments, and the historical development of Dutch and Indonesian corporate law have followed their own paths. To arrive at a corporate law comparison, this study first deals with the similarities between Dutch and Indonesian civil law as regards contractual limitations and the behavioral normative dimension that can be attributed to reasonableness and fairness in corporate law. This chapter will also discuss prevailing legal theoretical perspectives and their practical elaboration in the Netherlands and Indonesia. • Chapter 4 deals with the question to what extent self-regulation can be considered to be ethics. This chapter discusses and criticizes the claim that self-­ regulation in business can be equated with business ethics. This claim comes, for example, from the largest employers’ organization in the Netherlands, the VNO-­ NCW Association. According to this organization ethics is a form of self-­ regulation and, therefore, self-direction. A corporation sets the norms that it considers important. As a result, ethics will not, or will not be needed to, incentivize the drafting and imposing of new laws and regulations to promote the desired behavior. This self-regulatory trend fits within a broader concept of Western-­styled liberal ways of executing public governance, and thus within alternative styles of regulation. This phenomenon has been awarded the name ‘alternative justice’ in legal theoretical literature. The philosophical and sociological question posed in the same literature concerns the extent to which alternative justice can ever form a real alternative to the violence and coercion of state power. The pretension that self-regulation can be equated with business ethics is based on the idea that self-regulation is a mechanism whereby the business field itself bears responsibility for drawing up, implementing, and enforcing self-­ binding rules. The self-binding principle of this mechanism is supposed to distin-

1.3  The Division of this Research into Sub-studies

5

guish self-regulation from legal or state regulation because the norms and standards are supposed to be private and not public in nature. The question that will be answered in this chapter is whether self-regulation is indeed deserving of this degree of autonomy. This question is answered through the examination of a case study concerning the Dutch Corporate Governance Code. • Chapter 5 deals with the question to what extent alternative dispute resolution (ADR) in business can be considered to be ethics. Where the previous chapter provides an insight into the juridification of material ethics—an ethics which, after juridification, is homologous to material (i.e., substantive) law in terms of style—Chap. 5 provides an insight into a legally thought formal ethics. In this context, formal ethics does not refer explicitly to Immanuel Kant’s ethics, but to ethics which, after juridification, is homologous to formal law. This chapter discusses the claim that, in addition to self-regulation, ADR can also be equated with business ethics for reasons analogous to the discussion of self-regulation in Chap. 4. Alternative justice proceeds from the assumption or pretense that it performs something that has the potency of law yet retains the freedom ontology of ethics. This central assumption is brought to light here. To investigate this claim, ADR is presented as an ideal type of alternative justice that supposedly transports rather than transforms disputes. This means that the dispute is not juridified—juridification implies the narrowing and dehumanization of a dispute (abstraction)—but is approached holistically (concretely). ADR thus presents an ideal legal typology. This opposition is deconstructed in this chapter. Chapters 4 and 5 deal, therefore, with the appearance of a juridified, presumed ethics that can be distinguished in a material and formal version. Both versions are homologous to their legal counterparts, namely material law and formal law. • Chapter 6 deals with the question of how a legally thought business ethics can be critical of its own legal, systemic thought. This chapter contributes to a philosophical approach to business ethics by inserting the current state of business ethics, which is captured by legal thinking and Karan Barad’s posthuman theory known as ‘new materialism’, into a proposal for a new study of business ethics. The merging of business ethics and posthumanist theory results in a posthuman approach to critical business ethics. The proposition of this chapter is that legal thinking weakens the field of business ethics, or even causes it to disappear. Legal concepts are posited here as a disciplinary apparatus within business ethics, with as a result that business ethics is subject to legal thinking, i.e., formalism, coercion, and heteronomy on the one hand, and rationality and utility on the other—legal values that are opposed to ethics. This chapter provides an analysis of this disappearance of ethics and offers a way of escaping this. • Chapter 7 attempts to reveal what happens when business ethics are not integrated into management processes and decisions even though the law requires such an approach. This chapter presents a case study in which ethics in law is left behind in a flight into pragmatism. To those who problematize the phenomenon of a ‘leg’ as an ethical task in law, a new reality reveals itself in which amputee patients have rights over their amputated leg. As a result, they may bury their leg, cremate it, or take it home with them. This case study shows, contrary to current

6

1 Introduction

practice, that according to Dutch law doctors should make every amputee aware of these options, for value-ethical and legal reasons. We have thus moved beyond the realm of ethics and law into the realm of technology. A result of technology is trash. Trash reveals the material failure of humans. This phenomenon unambiguously reveals man’s existential shortcomings: trash is the result of the transhumanist attempt to deny human mortality. Human hospital trash is the more than unequivocal denial of human mortality and, thus, the more than unequivocal denial of Heidegger’s ‘Sein-zum-Tode’, ‘being-toward-death’. Through this denial of the uniqueness of the death experience, the ‘Dasein’ (‘there-being’) is not confronted with itself. And this while death is an idiosyncratic experience in which the Dasein can realize that he is an individual, a self. The final part provides a conclusion and closing remarks concerning the key points of this nomomorphology. It reflects upon the contribution of this study to our understanding of the interaction of business ethics and law and identifies areas for possible future research.

1.4 Discourse on Method In this section I discuss the research method presented in this study. A ‘method’ is inevitably embedded in a scientific philosophical ‘discourse’ around ontology, epistemology, and methodology. First these concepts are briefly introduced, then they are applied to this study.

1.4.1 Introduction to Ontology, Epistemology, and Methodology ‘Ontology’ is a branch of theoretical philosophy that deals with the division of ‘being’ and the basic structures of reality. The term is derived from the Greek ‘to ontos’, meaning ‘that which is’. Throughout history, separate phenomena or topics have emerged that are the subject of philosophical or general scientific discussions that can be described as the fundamental questions of ontology. Examples of these are: the question of existence, the problem of totality, the distinction between things and the idea of becoming. ​​ Ontology often clears the way for language, or at least poses the question what role language plays as a medium between subject and object, in which the reflection of the real and the non-real can be found. ‘Epistemology’ is generally understood to be the doctrine of knowledge. In this view knowledge is assumed to be the opposite of opinions based on mere sensory perception. Plato, for instance, juxtaposes ‘episteme’ and ‘doxa’: knowledge and opinion. Traditionally, a distinction is made between two forms of access to epistemology: ‘rationalism’, which claims that people acquire their knowledge through

1.4  Discourse on Method

7

logical thinking, and ‘empiricism’, which says that people acquire knowledge through sensory experience only. Epistemology asks what people can recognize or know, while ontology is the quest for the things that exist. ‘Methodology’ answers the question as to which method is suitable for a certain type of application, and why a certain method should be applied or used instead of its alternative. The question methodology tries to answer about ontology is what one can say or predict about being. That requires an explanation, making ontology scientific. In this fashion, scientists assume all sorts of different, basic ‘epistemological’ positions regarding the objects they are researching (their study objects), such as a ‘positivist’, ‘realistic’, ‘constructivist’ or ‘postmodernist’ view. Positivist and realistic epistemologies imply that the basic structures of reality in experience can be reliably expressed through language. So, language follows/replicates reality: after reality, the names of things can be recorded. Kant, however, answered the question whether the thing or reality in itself (his ‘thing-in-itself’) can be known in the negative (Kant, 1996, p.  28). The idea that the thing-in-itself is unknowable implies that the truth of scientific statements cannot be checked by referring to facts that are certain. The authority of the Platonic ‘truth’, ‘justice’ and ‘beauty’ is, as it were, put into the perspective of ‘a’ beholder; this is the reason why some natural law philosophers warn against relativism. If truth, justice, and beauty are indeed in the eye of the beholder, then all things are potentially true and false, just and unjust, beautiful and horrible at the same time. Subsequently, the constructivist and postmodernist positions teach us that the basic structures of things are merely projections of thinking and speaking about the world. Language, therefore, precedes reality: “Man acts as though he were the shaper and master of language, while in fact language remains the master of man” (Heidegger, 2001, p. 144). The major difference between positivism and realism, on the one hand, and constructivism and postmodernism, on the other is, therefore, whether the world is already built, and we can ‘translate’ it (from reality to language), or whether we ‘build’ the world (from language to reality). In empirical science, ontology assumes that the thing is translated into a research object by different ‘faculties’ (Kant, 1979). Here a positivist definition differs from a postmodernist definition of ontology. According to Heidegger, the sciences do not analyze ‘being’, but ‘beings’ (Heidegger, 1996): The being of beings “is” itself not a being. The first philosophical step in understanding the problem of being consists in avoiding the mython tina diēgeisthai, in not “telling a story,” that is, not determining beings as beings by tracing them back in their origins to another being—as if being had the character of a possible being. (p. 5)

Since the sciences have declared ‘being’ to be the most general concept (by Aristotle), an indefinable concept (by Pascal), or a self-evident concept, they have given priority to the ‘ontic’ question instead of the ‘ontological’ question of being (Heidegger, 1996, pp. 4–5, 11–15). In short, ‘scientists’ are only interested in “the where of a random objective presence of things” (Heidegger, 1996, p.  103) in a totality of ‘beings’, that they regard as reality, as ‘being’.

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1 Introduction

The constructivist and postmodernist perspective of reality is that reality is not certain, but that the basic structures of things are only projections of thinking about the world. That thinking is done by people. If those people are busy with science (the scientists, or the ‘science’), they construct a certain representation of reality. So, science creates the object it studies (cf. Heidegger, 1996, p. 331). The ability to study implies knowledge, and the ability to create implies power. Science is a discourse in which these two things are united into technology, into all sorts of methods to manipulate and control the world (Habermas, 1968).

1.4.2 Ontology, Epistemology, and Methodology Applied The relationship between ethics and law is important for my study in order to give context to the concept of ‘homology’. In biological systematics and comparative anatomy, homology is an indication of a fundamental correspondence of phenotypic somatics due to their common evolutionary origin. Homologous characteristics are similarities between two species that can be traced to a common ancestor. These characteristics can then have evolved in all kinds of directions or can be used in all kinds of functions. In this nomomorphology, this biological concept is used in a philosophical way. Homology thus becomes a concept for analyzing power systems that apply to law on the one hand, and alternative justice on the other. Unlike ‘analogy’, homology is the correspondence of two things caused by kinship. In analogy, this relationship is lacking. The common ontology, namely that both ethics and law are structures of being, is assumed in this study (cf. Tillich). Ethics and law are discourses that are inextricably linked to ontology. For those interested in this ontology I recommend the study Love, Power, and Justice: Ontological Analyses and Ethical Applications (1954) by theologian Paul Tillich (Tillich, 1954): Ethics is the science of man’s moral existence, asking for the roots of the moral imperative, the criteria of its validity, the sources of its contents, the forces of its realization. The answer to each of these questions is directly or indirectly dependent on a doctrine of being. The roots of the moral imperative, the criteria of its validity, the sources of its contents, the forces of its realization, all this can be elaborated only in terms of an analysis of man’s being and universal being. There is no answer in ethics without an explicit or implicit assertion about the nature of being. (p. 72)

As far as legal theory is concerned, a distinction can also be made between natural law thinking and legal positivist thinking. In transcendental philosophy, knowledge is produced by eternally valid attributes of the mind created by God, i.e., ‘reason’. ‘Naturalism’ is, as it were, the product of a transcendental philosophy of law: legality through legitimacy. ‘Positivism’ is a direction in the philosophy of science that requires that knowledge is based on the interpretation of actual, intellectual, and verifiable findings. Positivism has traditionally been set against the scholastic views of a transcendental philosophy. ‘Legal positivism’, however, distinguishes itself from scientific positivism in a fundamental way.

1.4  Discourse on Method

9

In my study, I deliberately do not opt for an epistemologically positivist—or realistic—approach, but rather base my argumentation in part on premises that stem from legal positivism. The basic idea of legal positivism is that the applicable law is the changeable legislation enacted by the government, without any necessary connection to ethics: legitimacy through legality. According to Hans Kelsen, the principle of legality, of lawfulness, is “immanent in every legal order. It is presented sometimes as justice under the law. But in truth, it has nothing to do with justice at all” (Kelsen, 2000, p. 15). Advocates of fundamental human rights saw an ethical contradiction in the blind implementation of the laws of an unjust regime, behind which was the willingness of the judiciary to be mobilized. The question remained whether the judiciary wanted to revert to another legal norm, according to which judges could (by invoking a higher legal order) ‘violate’ the law and thereby violate laws of the legislator. This legal Kelsenian construct1 of law and justice, and law and ethics is deconstructed in this study. The epistemology in this study can, therefore, be characterized as postmodern. In answer to the main research question, I give a critique of a legally thought business ethics that is professed through alternative justice. I do this in response to various claims that alternative justice conveys ethics (transportation) instead of juridifying it (transformation). To investigate this, I transform the concepts of ‘ethics’ and ‘law’ into institutional facts. This makes them particular constructions. This nomomorphology is thus a study of the conditions of the possibility of ethics in a juridified or legally thought discourse. This study investigates the claim that ethics should vest its hope in alternative justice as a panacea against juridification or a legally thought ethics. This claim is interpreted in this study as a constructed ‘reality’ that arose from the knowledge or belief in that reality. Because such claim is a reality constructed by humans, it is potentially a non-reality. After all, every reality potentially has an opposite. But how can this potential be brought to light? First by identifying the conceptual constructions of the theoretical fields, where the contradictions are found. The construct is that ethics (informal) and law (formal) are opposites, as are alternative justice (informal) and law (formal). In short, he who enters the field of law becomes the subject of formality, and he who enters the field of alternative justice is the subject of informality: a dichotomy of the form of law that favors coercion, as opposed to the formlessness of alternative justice that favors coersionlessness. The method by which the potential of the construction, the alleged dichotomy, is examined in this study for its ‘reality’, concerns the destruction of the dichotomy, or the destruction of the construction: ‘deconstruction’. With the advent of deconstruction we are entering the epistemology of postmodernism. The method of deconstruction is a critical questioning or solution of things in the broader sense. The starting point of deconstructionist thinking is that science has given us successive power over inanimate nature, over plants and animals, and ultimately over people (Russell, 1954,  This ‘autonomous’ legal construct is not only recognizable in Kelsen, but also in the writing of many other legal scholars, such as (but not limited to) H.L.A. Hart, Joseph Raz, Niklas Luhmann, Pierre Bourdieu, Richard Posner, and Gunther Teubner (cf. Bix, 2005). 1

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1 Introduction

p. 190) and that the entire knowledge system is, therefore, focused on acquiring power (Nietzsche, 1968, p. 266, §480: “Knowledge works as a tool of power”). As a result of this scientific, technical thinking and practice, man has been made predictable by a morality of a social straitjacket of convention (Nietzsche, 1924, p. 287). The discipline of the ‘panopticon’ is no longer just intramural in modernity but has become extramural and is maintained by ‘discipline and punishment’ (Foucault, 1975). The convention makes rules (‘authority’) fair, for the very simple reason that these rules are adhered to. Whoever reduces that foundation to its starting point denies that authority. So, the law now does not maintain its credit because the law is just, but because it is law. Once deconstructed, this legal tradition is reduced to the alienation from which it originally originated. In this way the origin is brought to the living present that is always, by definition, concrete, and temporal. The foundation of the foregoing is, therefore, that our reality is the product of language, but, at the same time, that language is not suitable (or intended) to describe that reality. Language structures the reality that is principally ‘instructurable’. So, what language does in the description of things is to make things appear that do not lend themselves to structuring. At the same time, the scientific act of describing reality makes reality invisible. Compare it to taking a photograph. When you do so you only make a small part of reality visible, whilst leaving most of reality invisible. A photo simultaneously shows us both reality and irreality. The ‘reality of science’ is, therefore, potentially both reality and irreality. Alienation that aims at deconstruction reveals that the whole scientific reality is ambiguous. The alienation brings the thing back to that strangeness. For the law this means that an act of violence precedes the law: a conquest or revolution, for instance. The idea that violence constitutes law can be found in thinkers such as Walter Benjamin, Jacques Derrida and Giorgo Agamben. Similar ideas can also be found in Sigmund Freud, who viewed the concept of the law as a consequence of acts of violence (Freud, 2016, pp. 5–6). Carl Schmitt formulates the principles of the dialectic of inclusion and exclusion to which state monopolized violence is subordinate: violence survives in any state and culture and turns into law (Schmitt, 1932, p. 14; Schmitt, 2005, p. 12). Violence is in principle directed against strangers, enemies. If the state is in a state of emergency, the ‘sovereign’ of the state emerges. That ‘first’ law cannot be legitimized by a higher power because it simply is not there. The sovereign who becomes known by that ‘first’ law is arbitrary, because he is the strongest, the most powerful. The arbitrary law of the powerful paves the way for legal positivism. By means of deconstruction it can be shown that phenomena are not natural and inevitable but constructed by people, meaning that people can also dismantle them. Deconstruction provides the possibility of redefining a phenomenon after dismantling, which does not destroy the phenomenon, but gives it a different structure or effect. It could perhaps be argued that a legal method for analyzing the dynamics between ethics and law would be ‘hermeneutics’. Hermeneutics, like deconstruction, is a form of interpretivism and refers both to the literary theory of text interpretation and to the philosophical theory of interpretation and understanding (Gadamer’s ‘Verstehen’). Indeed, law and applied ethics are both concerned with

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the formulation of normative statements because they are both an extension of a particular practice. This normative task can only be fulfilled through interpretation by a jurist or an ethicist (Maris & Jacobs, 2011). That these discourses clearly and necessarily exist hermeneutically means that the dynamics between them can also be brought to light through hermeneutics. According to Dworkin in ‘Science and Interpretation’ (2011): “Interpretation differs from science because interpretation is purposive, not just in the vocabulary of its claims but in the standards of its success” (p. 52). Hermeneutics emphasizes text ‘understanding’ rather than the author’s intention. According to Gadamer (2013): When we try to understand a text, we do not try to transpose ourselves into the author’s mind but, if one wants to use this terminology, we try to transpose ourselves into the perspective within which he has formed his views. (p. 303)

This means that the reader constantly anticipates the entire text and is thus constantly corrected by an improved understanding of the text. The process of understanding thus leads to a constant increase in understanding through the sequence: …, reading, anticipating, understanding, reading, anticipating, understanding, reading… Although this involves a circular return, it is not a return to a center, as there is an increase in understanding. This increasing understanding requires knowledge of the text, including knowledge of the history of the text and of its reception. According to this ‘hermeneutic circle’, the interpretation of hypothesis formation is subject to a self-corrective mechanism: Schleiermacher follows Friedrich Ast and the whole hermeneutical and rhetorical tradition when he regards it as a fundamental principle of understanding that the meaning of the part can be discovered only from the context—i.e., ultimately from the whole. (Gadamer, 2013, pp. 195–196)

This interpretation is to be understood as the completion of the experiment, and with that the cardinal difference with deconstruction becomes evident. The difference between the hermeneutic and deconstructive textual (for example, a novel) and phenomenal (for example, a painting) interrogation, is that hermeneutics is the result of a quasi-dialogical relationship between text or phenomenon and interpretivist, the aim of which is to gain an increasingly better understanding of a text. For example, the lawyer brings the sources of law to understanding (law, case law, custom and international law) and extracts, ‘finds’, the law of legal subjects (that which is the subject of law or that which is subjected to law). The legal scholar as ‘finder of law’, the law as ‘finding of law’. Finding law is the concretization and, therefore, application of objective law: This implies that the text, whether law or gospel, if it is to be understood properly—i.e., according to the claim it makes—must be understood at every moment, in every concrete situation, in a new and different way. Understanding here is always application. (Gadamer, 2013, pp. 319–320)

With those finds, successive units of meaning continuously arise. The law always has one traceable context of meaning, because both the law and the interpretivist are bound by tradition. A tradition that also stems from the same law with its exegetes:

12

1 Introduction The anticipation of meaning that governs our understanding of a text is not an act of subjectivity but proceeds from the commonality that binds us to the tradition. But this commonality is constantly being formed in our relation to tradition. Tradition is not simply a permanent precondition; rather, we produce it ourselves inasmuch as we understand, participate in the evolution of tradition, and hence further determine it ourselves. (Gadamer 2013, p. 305)

I have not attempted to anticipate a unity of meaning, but to unravel a multitude of meanings that are often used to explain a supposed unity. The methodology in this study appeals to a postmodern tradition that moves in the context of anti-­ hermeneutics: understanding through incomprehension.

1.5 Limitations For the most part this business ethics study concentrates on the interaction of business ethics and law. That does not mean, however, that business ethics cannot enter into other interactions. Consequently, there are many interesting theories and ideas about business ethics that will not be discussed here. This nomomorphology focuses on business ethics as far as it is legally thought. Because of the systemic nature of law, the conclusions of this study could possibly also apply to an economically thought business ethics, a social scientifically thought business ethics, a mathematically thought business ethics, or a managerially thought business ethics. From all of these observations an appeal can be made to free business ethics from the discourse by which it is colonized. The technological functionalization of ethics dissolves ethics, as it were, and the influx of empiricism into ethics turns ethics into morality. This study does not have such a broad pretension. Another limitation is that the research for this study was based on a certain epistemology, which in the philosophy of science is called ‘postmodern’ (cf. McKinley, 2003). This means that this study is also limited to this epistemology and its results are not, or only marginally, useful for studies that are related to another epistemology. This would result in unnecessary category errors, and thus errors in thinking. Postmodern epistemology always aims to liberate thinking from certain systems. In this study, therefore, an attempt will always be made to free business ethics from its technological thinking (Jones et al., 2005, p. 8).

1.6 The Question Concerning Business Ethics A study on business ethics presupposes a certain notion of ethics, particularly if that study criticizes ethics for being thought legally. The assumption here is that there is such a thing as ethics that is not thought legally. In each chapter, I have sought to reveal the legal within the ethical with the goal of liberating the ethical from the legal. Malicious gossip may say that such deconstruction of a legally thought business ethics will lead to nihilism, or at least to nothing practical. So, the ethical

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question then is: how can the deconstruction of business ethics leave any room for ethics or justice at all? Doesn’t deconstruction lead to ethical relativism, or nihilism even, if it simply deconstructs everything? It is, however, not a disaster that thinking can be deconstructed.2 At the same time, all kinds of new legally thought or practiced business ethics, whether originating from formal legislature, corporations, or civil society organizations, have continued to blur the relationship between law and ethics. It is also certain that the hypertrophy of rules and procedures has not led to more ‘ethics’, whatever the word ‘ethics’ may mean in a business context: “Understood ethically, the entire modern science of the ethical is a diversion”, as Søren Kierkegaard (2020, p. 94) considered. In the years that I have worked on my nomomorphology, I noticed that the word ‘ethics’ was frequently written down cynically between quotation marks by people in the academic field, psychologists, economists, sociologists, and of course lawyers, but also even by philosophers and ethicists. This is in essence a way of expressing distance from, or maybe even fear of, ethics, of distinguishing between signifier and signified. I could, of course, assume that the speaker or author is indeed quoting, but it makes more sense to assume that ethics apparently does not really need to be taken seriously, or is experienced as something cynical at its core. Let this be anecdotal evidence that cynicism does indeed exist in ethics. It involves a distrust of others’ ethical intentions, of the utility of institutions that must somehow propagate those ethics in, say, courses and lectures, or an apathy toward the consequences of one’s own unethical actions. What causes this cynicism? It could well have to do with the fact that the high expectations we have of ethics are not being fulfilled. Ethics seems to hold us to high expectations, that we find difficult to fulfill. This can make use resign our ambitions to pursue the ethical high ground altogether. Instead of living up to those expectations we have made ethics into an idol, a lower deity, who promises more and is less demanding by presenting us with the illusion that ethics is adequately3 practiced by means of rules and procedures. Such legally thought ethics is then mendacious and conceals its true motivations. The rules and procedures presume that each individual is aware of everyone’s hypocrisy. This is a familiar theme in Peter Sloterdijk’s Kritik der zynischen Vernunft (1983a, pp. 95–107) and it is a disguised simplism that falls apart easily. This does not alter the fact that the criticism of cynics, insofar as we can call it criticism, relies on a pre-reflexive disquiet and suspicion that are fundamentally justified. The disquiet is justified because the practice of cynicism only produces more cynicism, and suspicion is justified because this cynical practice is reprehensible on ethical grounds. Ethics should certainly be expected to reject cynicism, but it cannot ignore it. Only, the rejection should not linger in cynicism, because cynicism is disguised simplism and simplism is disguised juridism. The critique of ethics must not itself  The paradox proposed by Jacques Derrida is that this deconstructable structure, of ethics as a juridism, secures the possibility of deconstruction. However, justice in itself is not deconstructable, just as deconstruction in itself cannot be deconstructed. Derrida thus arrives at his stance, “La déconstruction est la justice” (Derrida, 1994, p. 35). 3  Ethics as ‘adequatio’ instead of ‘aletheia’. 2

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1 Introduction

fall into cynicism, but must be conducted in a loving embrace, so strong and encompassing that the critique of ethics would like to die at the same time, and under the same conditions, as ethics itself. In this way, critiquing eschews cynicism, simplism, and juridism in business ethics. The loving extraction of juridism from business ethics, however, does not simply present us with a business ethics that provides normative direction as to what we should and should not do. In other words, it does not equip us with a moral compass. Values, norms, goals, standards, duties, and guidelines seem to do just that within today’s corporations. After all, they value and legitimize certain behavior to a greater or lesser degree as ethical or unethical. This seems useful, but by valuing certain behavior, that behavior merely becomes an object of human estimation. The other who values your behavior allows that behavior to pass de jure for objectively ethical or unethical, while de facto a subjectification is involved. This becomes apparent when Otto Friedrich Bollnow, in his Wesen und Wandel der Tugenden (1958), takes a closer look at what value ethicist Nicolai Hartmann understood by ‘justice’; namely, what jurists usually refer to as the degree of ‘lawfulness of behavior’ (‘Rechtmäßigkeit des Verhaltens’, Bollnow, 1958, p. 197). The self is in this way determined by the other.4 The self becomes like the other, with the result that business ethics is inevitably group ethics. In their For Business Ethics (2005), Campbell Jones, Martin Parker, and René ten Bos argued that ethical values, norms, goals, et cetera that promote consensus and group feeling are considered important within the discourse of business ethics. These include “loyalty, accuracy, communicativeness, trustworthiness, diligence, trust, obedience, and other traits that generate group coherence and consent.” What is ignored as part of business ethics are individual instead of group phenomena, for instance “creativity, intuition, aimless thinking, and the ability to ask unpractical questions” (p.  115). Similarly, Jean-­ Pierre le Goff has argued in his Le myth de l’entreprise (1992) that business ethics is tailored to improve the productivity of the collective of employees under the guise of individual fulfillment. The ethics of individual managers and executives can easily pass from the ‘I’ to the collective ‘we’. The company is then often seen as a community of people united by the same values, or even by a shared DNA. The legal abstractness of the legal entity is then presented as an ethical concreteness. In other words, the artificial and illusory ‘we’ is presented as an embodied moral subject. Ethics and values are even presented as reference models to which employees must adhere or are even called upon to conform with. The reaction of those who

 Cf. Sartre (1943, p. 260): “On n’est pas vulgaire tout seul. Ainsi autrui ne m’a pas seulement révélé ce que j’étais: il m’a constitué sur un type d’être nouveau qui doit supporter des qualifications nouvelles. Cet être n ‘était pas en puissance en moi avant l’apparition d’autrui car il n’aurait su trouver de place dans le pour-soi; et même si l’on se plaît à me doter d’un corps entièrement constitué avant que ce corps soit pour les autres, on ne saurait y loger en puissance ma vulgarité ou ma maladresse, car elles sont des significations et, comme telles, elles dépassent le corps et renvoient à la fois à un témoin susceptible de les comprendre et à la totalité de ma réalité-humaine.” 4

1.6  The Question Concerning Business Ethics

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refuse to enter such a relationship cannot but come across as a disloyal and an ungrateful threat to the illusory ‘we’ that forms a business and thus business ethics. In this way, ethics is deliberately being confused with economics. This is done through juridification. Ethics is rendered useful and closed off from those issues that, according to Jones et al., are also inevitably important in business and in the discourse of business ethics. The problem with this large, open, and pluralistic aspect of business ethics, the non-legally thought business ethics, is that it is difficult to organize and institutionalize in a practical fashion. If Paul Ricœur in his Soi-­ même comme un autre (1990) considers ethics to be “la visée de la « vie bonne » avec et pour autrui dans des institutions justes” (p. 202), this does not mean that these ‘institutions justes’ are a given in thinking about ethics and in ethical practice. Indeed, a certain degree of suspicion – which the French philosopher and, by the way, the author of this study find so attractive in the works of Marx, Freud, and Nietzsche5 – is exactly what one should expect of ethics. The operationalization of ethics often begins with the institutions justes, but the institutionalization and operationalization are not what the institutions justes aspire to. Those who remain stuck at an institutional and operationalization level are, in short, practicing simple ethics. Ethical thinking is lingering thinking in the greatest possible openness in-the-World; ethical practice is organizational or institutional only insofar as thinking and doing can un-think and un-do. Ethical thinking requires individual self-confidence, and not a collective wait-and-see. On top of the institutional framework ethical practice then becomes concrete through the kind of response that, for example, whistleblowers, anti-globalists, poets, comedians, musicians, artists, and filmmakers express toward corporations (Jones et al., 2005, p. 125). The heroes among them transform reality, create new realities and, therefore, practice an ‘aesthetic’ ethics. In this ethics there is a potential for rejecting ethics as a codified and formalized, i.e., juridified, set of behavioral guidelines, and for finding an ideal of self-creation and new ways of ‘acting and being’. These transformative actors appear both inside and outside of corporations and refuse to allow the utility ethics of corporations to be fulfilled limitlessly. Such an attitude is by no means simple. Walter Benjamin, for example, in his description of the flâneur, states that this aesthete is quickly regarded by the collective as a deadbeat who is detached from reality and uses the other to give meaning to his own activities (Benjamin, 2006, pp. 68–69). No alternative cynical system is offered by  Paul Ricœur affirms the existence of an ‘École du soupçon’, of which he states (Ricœur, 1965, pp. 40–41): “Trois maîtres en apparence exclusifs l’un de l’autre la dominant, Marx, Nietzsche et Freud. Il est plus aisé de faire apparaître leur commune opposition à une phénoménologie du sacré, comprise comme propédeutique à la « révélation » du sens, que leur articulation à l’intérieur d’une unique méthode de démystification.” Michel Foucault, à propos, already introduced this point of view before Ricœur (Foucault, 1967, p. 185): “Si ces techniques d’interprétation du XVIe siècle ont été laissées en suspens, par l’évolution de la pensée occidentale au XVIIe et au XVIIIe siècles, si la critique baconienne, la critique cartésienne de la ressemblance ont joué certainement un grand rôle pour leur mise entre-parenthèses, le XIXe siècle, et très singulièrement Marx, Nietzsche et Freud nous ont remis en présence d’une nouvelle possibilité d’interpréter, ils ont fondé à nouveau la possibilité d’une herméneutique.” 5

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aesthetes, but the amount of truth in assumed ethics is laughingly tested. Truth is a thing that can withstand ridicule and is refreshed by every ironic gesture that is directed at it. That which cannot withstand satire is false, believes Sloterdijk (Sloterdijk, 1983b, pp.  527–528). This is at the same time the beauty of legally thought business ethics: it leaves so much room for a different form of practice and a different kind and way of thinking than the legal part alone. In this nomomorphology, by the way, not one of these magnificent heroes is speaking to you. Full of admiration for the practice of ethics, the jurist in this study has sought to reveal legally thought business ethics, so that even more room will be created for the beauty that I just described.

References Benjamin, W. B. S. (2006). The Paris of the second empire in Baudelaire. In W. B. S. Benjamin & M. W. Jennings (Eds.), The writer of modern life: Essays on Charles Baudelaire (pp. 46–133). The Belknap Press of Harvard University Press. Bix, B. H. (2005). Law as an Autonomous Discipline. In M. Tushnet & P. Cane (Eds.), The Oxford Handbook of Legal Studies, https://doi.org/10.1093/oxfordhb/9780199248179.013.0043 Bollnow, O. F. (1958). Wesen und Wandel der Tugenden. Ullstein. Derrida, J. (1994). Force de loi. Le Fondement mystique de l’autorité. Galilée. Dworkin, R. M. (2011). Justice for hedgehogs. The Belknap Press. Foucault, M. (1967). Nietzsche, Freud, Marx. In G.  Deleuze (Ed.), Colloque de royaumont. Nietzsche (pp. 183–192). Les éditions de Minuit. Foucault, M. (1975). Surveiller et punir. Naissance de la prison. Gallimard. Freud, S. (2016). Why war? In M. Belilos (Ed.), Freud and war (pp. 1–15). Karnac. Gadamer, H.-G. (2013). Truth and method. Bloomsbury. Habermas, J. (1968). Technik und Wissenschaft als ‘Ideologie’. Suhrkamp. Heidegger, M. (1996). Being and time. State University of New York Press. Heidegger, M. (2001). Poetry, language, thought. Harper & Row. Jones, C., Parker, M., & ten Bos, R. (2005). For business ethics. Routledge. Kant, I. (1979). The conflict of the faculties. Abaris Books. Kant, I. (1996). Critique of pure reason. Hackett Publishing Company. Kelsen, H. (2000). What is justice? University of California Press. Kierkegaard, S.  A., Cappelørn, N.  J., Hannay, A., Kirmmse, B.  H., Possen, D.  D., Rasmussen, J. D. S., & Rumble, V. (Eds.). (2020). Kierkegaard’s journals and notebooks, Vol. 11, part 2: Loose papers, 1843–1855. Princeton University Press. Maris, C. W., & Jacobs, F. C. L. M. (2011). Law, order and freedom: A historical introduction to legal philosophy. Springer. McKinley, W. (2003). Postmodern epistemology in organization studies: A critical appraisal. In E. A. Locke (Ed.), Postmodernism and management (pp. 203–225). Emerald Group Publishing. Nietzsche, F. W. (1924). Jenseits von Gut und Böse: Vorspiel einer Philosophie der Zukunft—Zur Genealogie der Moral. Alfred Kröner Verlag. Nietzsche, F. W. (1968). The will to power. Vintage Books. Ricœur, P. (1965). De l’interprétation. Essai sur Freud. Éditions du Seuil. Russell, B. A. W. (1954). The scientific outlook. George Allen & Unwin Ltd. Sartre, J.-P. (1943). L’être et le néant. Essai d’ontologie phénoménologique. Gallimard. Schmitt, C. (1932). Der Begriff des Politischen. Duncker & Humblot.

References

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Schmitt, C. (2005). Political theology: Four chapters on the concept of sovereignty. The University of Chicago Press. Sloterdijk, P. (1983a). Kritik der zynischen Vernunft I. Suhrkamp. Sloterdijk, P. (1983b). Kritik der zynischen Vernunft II. Suhrkamp. Tillich, P.  J. (1954). Love, power, and justice: Ontological analysis and ethical applications. Oxford University Press.

Chapter 2

The Camera Iuridica A Plea Against Juridified Business Ethics

See my position! Weep with me and weep for me, you who realize some inner good within yourselves from which good deeds follow. For those who do not act in this way, these words will not move you. But Thou, ‘0 Lord my God, hear, consider and see, and have mercy, and heal me.’ In Thy eyes I have become a problem unto myself and that is my weakness. (Augustine, Confessiones X.XXXII.50, 2008, p. 308)

2.1 Introduction What is the relationship between business ethics and law? This question is important in this nomomorphology because business ethics and law both provide frameworks for the normative assessment of business conduct. Both are powerful social institutions, by virtue of which outcomes for businesses and their stakeholders can be controlled. Both determine obligations, duties, entitlements, and ideals for businesses and their stakeholders, but do this in different ways, a fact which is not always clearly understood. The contents, methods, and functions of the two institutions are in part similar, and partly different. Sometimes they act in unisono, and at other times they appear to function as opposites. An improved understanding of the relationship between business ethics and law can be helpful to decision makers in business, and to stakeholders, in making better decisions and developing more effective policies regarding normative issues in the business world. In this chapter it is argued that within the discourse of business ethics an increasingly important role is reserved for a juridified form of business ethics. Within business ethics a tendency to adopt legal language and argumentation can be discerned. This ‘legally thought business ethics’ appears to be considered a plausible and legitimate operationalization within business ethics and propelled by its approval, this legally thought business ethics leads to the development and application of institutions and instruments that have unavoidably legal features. Examples hereof include ethical codes of conduct (Babri et al., 2019; Kaptein, 2011), corporate governance © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_2

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codes (Rodriguez-Dominguez et  al., 2009), case histories (Jonsen & Toulmin, 1988), and alternative dispute resolution (Jansen, 2021a, b). This chapter commences with an overview of what I consider to be the standard view of the relationship between business ethics and law in existing scholarly literature. This first section discusses the various positions that ethics and law can assume in relation to each other, i.e., reinforcing, complementary, and opposing. Next, the perceived differences and similarities in terms of the content, procedures, and functions of business ethics and law are discussed. In a subsequent section, I discuss how I perceive juridified business ethics. Intermediary institutions play a major role in juridified business ethics. These institutions are referred to as the ‘camera iuridica’1 of business ethics; in other words, a business ethics that is thought legally. Inspired by the work of the French philosopher Michel Foucault (1926–1984), it is argued that a legally thought business ethics and law are both panoptic power institutions that act in the same way on crucial qualities—namely ‘formalism’ and ‘objectivism’. Business ethics could draw on the Critical Legal Studies Movement to expose this camera iuridica, which effectively deprives business ethics of its identity. I will conclude that the distinction between business ethics and law should be activated in order to critically expose the juridification of business ethics.

2.2 The Standard View on the Relationship Between Business Ethics and Law In the extant business ethics literature, the prevailing view of the relationship between business ethics and law is that they are partially overlapping social institutions that both aim at coordinating the actions of individuals and organizations in a business context (Velasquez, 2014, p. 20). Each in their own way, the two institutions promote the social integration of business by encouraging norm conforming behavior. Graphically, the relationship between ethics and the law is often represented in a Venn diagram, such as the following example taken from a leading business ethics handbook (Fig. 2.1). This figure illustrates that “the domain of ethics includes the legal domain but extends beyond it to include the ethical standards and issues that the law does not address” (Treviño & Nelson, 1999, p. 16). The Venn diagram represents the idea that there is an area of overlap of topics and issues addressed by ethics and law. It also suggests that the institutions of ethics and law are partly different and distinct. Similar graphical representations of the relationship between ethics and law can be found in other business ethics textbooks (Schwartz & Carroll, 2003, p.  509; Crane & Matten, 2004, p.  9; Jeurissen, 2007, p. 17).  The ‘camera iuridica’ is derived from the title of a chapter written by Tim Murphy (1994). As If: Camera Juridica. In P. Goodrich, C. Douzinas & Y. Hachamovitch (Eds.), Politics, Postmodernity and Critical Legal Studies: The Legality of the Contingent. London: Routledge. 1

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Fig. 2.1  The relationship between ethics and law. (Treviño & Nelson, 2013, p. 21)

Another thing Fig. 2.1 suggests, is that there is a form of stable and balanced mutuality between the spheres of law and ethics. They appear to form an inertial system in a static constellation, as in a brotherhood or an entente cordiale, in which nothing really dramatic ever happens. I aim to explain that this suggestion is false. The relationship between business ethics and law is far from static or cordial. What I see happening is a dynamic shift in the world of business ethics towards ever increasing juridification, as a result of which the original intentions and functions of ethics are at risk of being colonialized by a growing arsenal of so-called ‘soft law’ institutions, that profess to be the best-of-both-worlds hybridizations of ethics and law, but which are in fact often plainly legal instruments in an ethical disguise. These processes originate within business ethics itself, in what I will call a ‘legally thought business ethics’.

2.2.1 Reinforcement, Complementarity, and Opposition In the interplay of similarities and differences, business ethics and law can either support or oppose each other (Van Luijk, 1998). Mutual support can be through reinforcement, or complementarity. Business ethics and law reinforce each other when they assist each other in terms of motivation or effectiveness. Horace’s dictum ‘quid leges sine moribus’ illustrates this point. Morality is an important motivator for legal compliance. Business ethics and law reinforce each other when they both define and support the same normative content. Respect for property rights, for example, is deeply rooted in common morality, as well as in Western based law. The mutual reinforcement aspect of law and ethics is often emphasized in business ethics literature (Stone, 1975; Velasquez, 2014; Bowie, 1990; Jeurissen, 2000; Schwartz & Carroll, 2003; Crane & Matten, 2004).

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Business ethics and law are complementary insofar as their domains of application are concerned. Theycan complement each other because they are different in important respects, but also an extension of each other. Time and again, business ethics literature emphasizes that ethics goes ‘beyond’ the law. This is also suggested by the Venn diagram shown above. A good illustration of this view is provided in Lynn Sharp Paine’s classical business ethics articles published in the Harvard Business Review, in which she contrasts the ‘integrity strategy’, based on business ethics, with a ‘legal compliance strategy’, based on the law (Paine, 1994): [A]n integrity strategy is broader, deeper, and more demanding than a legal compliance initiative. Broader in that it seeks to enable responsible conduct. Deeper in that it cuts to the ethos and operating systems of the organization and its members, their guiding values and patterns of thought and action. And more demanding in that it requires an active effort to define the responsibilities and aspirations that constitute an organization’s ethical compass. (p. 111)

Treviño, Weaver, Gibson, and Toffler undertook an empirical examination of Paine’s contentions concerning the hierarchical alignment of law and business ethics and found partial confirmation thereof. Both a ‘compliance orientation’ (based on the law) and a ‘values orientation’ (based on ethical values) appeared to correlate positively with ethical outcomes in an organization. However, the outcomes were most positive in the case of the values orientation, thus demonstrating that “a values-­ based cultural approach to ethics/compliance management works best” (Treviño et al., 1999, p. 149). In the case of complementarity, ethical norms give content to the law, and the law renders ethical norms enforceable (Hart, 1961, p. 199; Habermas, 1992, pp. 110, 137, 145, 188). The complementarity of business ethics and law is not always regarded as ethics transcending the ambitions and achievements of the law. The complementarity can also be seen as the domains of business ethics and law being adjacent. Some social relationships are best organized according to non-enforceable norms of ethical obligations and permissions; other social relationships are generally felt to be in need of enforceable laws in order to function effectively. Politeness, for example, is an important value in day-to-day business, but in most cases, it is not a legal matter, and it seems best not to submit it to a legal form (Sternberg, 2000). The concept of trust is also identified in business ethics as an asset that complements legal coordination mechanisms. Several papers hypothesize that having a higher level of trust in a company will potentially decrease the need to rely upon costly monitoring and enforcement through (legal) compliance procedures (Audi et  al., 2016; Costa & Bijlsma-Frankema, 2007; Poppo & Zenger, 2002). It is observed in the literature that business ethics and law are convergent. For ethical reasons, businesses must loyally comply with legal rules, and legislation must take greater account of a company’s unique responsibilities and (moral) characteristics (De Graaf, 1998). Business ethics and law can oppose each other, mainly by frustrating the achievement of each other’s goals. Typically, law can frustrate ethical goals in business by rendering commercial decision-makers complacent about their legal achievements, which are often less far-reaching than those dictated by moral ideals would have

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been. In court, companies may adopt a legalistic formalistic approach, which may not lead to the best ethical outcomes (Heath, 2014). Empirical business ethicists have demonstrated a moral crowding out effect caused by legalistic attitudes in business (Graafland, 2010). The interplay of similarity and difference between business ethics and law, as propounded in business ethics literature, can be further specified in terms of contents, processes, and functions.

2.2.2 The Contents of Business Ethics and Law It is often observed that business ethics and law are largely similar in terms of contents. Law is ‘solidified ethics’ or ‘ethics with teeth’, it is often said (cf. Hunt, 2009, p. 38; Martinez, 1998, pp. 695, 717). Law is a way of making business ethics effective, by providing it with the power of the sword. In this view, law is seen to be reinforcing ethics, without affecting its content. However, the contents of ethics and law differ, in several ways and for several reasons. It is readily apparent that business ethical and legal argumentation belong to entirely different genres, with their own vernacular and, based on different forms of argumentation. The building blocks of business ethics discourse typically consist of normative ethical standards and theories, which are common to all applied ethics. In presenting a summary of the normative foundation of business ethics, Schwartz and Carroll distinguish between three types of such ethical standards: ‘conventional’, ‘consequentialist’ and ‘deontological’ (Schwartz & Carroll, 2003, pp. 511–513): 1. ‘Conventional standards’: The acceptance of conventional moral standards as part of a company’s business ethics is based on the theory of ethical relativism. From an ethical perspective, companies should to those moral standards of their relevant stakeholders that are necessary for the proper functioning of the company. In other words, companies need social approbation and social legitimacy. However, this relativistic adaptation to social convention is delimited by a set of ‘minimum ethical standards’, of both a consequentialist and deontological nature. Here, the authors follow in the footsteps of De George (1993, 1994), Donaldson (1989, 1990), and Donaldson and Dunfee (1995, 1999), who were among the first business ethicists to operationalize non-negotiable, universal ethical standards that companies must respect in order to act with ethical integrity. 2. ‘Consequentialist standards’: These standards suggest that “the morally right thing to do is to promote the good of persons” (Schwartz, 2011, p. 98; Schwartz & Carroll, 2003). The consequentialist standard is ubiquitous in business ethics writing, especially in the handbooks, and it is often operationalized along utilitarian lines as the promotion of net social utility; popularized by Jeremy Bentham as the ‘greatest happiness principle’ (Goldman, 1980; Desjardins & McCall, 1990; Velasquez, 2014; Crane & Matten, 2004; Jeurissen, 2007; Collins, 2019).

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3. ‘Deontological standards’: These standards embody a consideration of one’s duty or obligation. Deontological standards are equally ubiquitous in business ethics handbooks, where they are often juxtaposed with consequentialist ­perspectives (Neil Brady & Dunn, 1995; Velasquez, 2014; Schwartz & Carroll, 2003, p.  512; Crane & Matten, 2004; Jeurissen, 2007; Dubbink & Van Liederkerke, 2014; Ferrel et al., 2018). The deontological standard is generally represented in the form of Kant’s categorical imperative, which boils down to a test of the ethical generalizability of the action (Singer, 1961). The operationalization of the normative principles of business ethics in a limited number of ‘ethical principles’ (Velasquez, 2014) is the most common method of developing a workable set of analytical tools that can be used for the purpose of ethical reflection, and as a guide for ethical decision making. Other important ethical principles applied in business ethics are moral rights (Goldman, 1980; Machan & Den Uyl, 1987), positive duties (Dubbink & Van Liederkerke, 2014), ethics of virtue (Melé, 2002; Alzola et  al., 2020), justice (Sternberg, 2000), responsibility (Jeurissen, 2007), care (Velasquez, 2014), the common good (Melé, 2009), Rawlsian reflective equilibrium (Wicks et al., 2010), and Habermasian discourse ethics (Crane & Matten, 2004; Scherer & Palazzo, 2007). Schwartz & Carroll characterize law not so much as a set of standards, but rather as a set of attitudes and strategies that businesses assume viz-a-viz the law. This is very revealing for how business ethicists view the law: not so much as a distinct set of normative standards, but rather as a different way of dealing with standards, with differing motivation and a different attitude. Typical for a legal approach to business, according to Schwartz and Carroll, is the following: • ‘Compliance with the law’: This can be ‘passive’ (meaning a purely coincidental legality of business conduct), ‘restrictive’ (meaning that a company is legally compelled to act in a way that it otherwise would not have), or ‘opportunistic’ (aimed at benefitting from opportunities provided by loopholes in the law, or by underdeveloped legal systems). • ‘Avoidance of civil litigation’: This involves corporations abiding by the law out of fear of being caught and punished. This includes all attempts by companies to settle lawsuits outside of court. • ‘Anticipation of the law’: This involves any form of anticipation of future legislative change, either because a corporation does not wish to be caught unawares when a new law is introduced, or with a view to interfering with the law-making process, in order to prevent, modify or slow down the pace of the enactment of the new law (Schwartz & Carroll, 2003). In addition to the fundamental difference in attitude, as identified by Schwartz and Carroll, as well as by Paine, there are some other reasons mentioned in business ethics literature as to why business ethics and law differ in terms of contents. There is the well-known issue of legal positivism versus natural law, of which business ethicists are, of course, well aware. It is acknowledged that legal rules can sometimes give rise to ethical problems (Treviño & Nelson, 2013). Not everything

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that is legal is necessarily legitimate in an ethical sense (Donaldson, 1990; Donaldson & Dunfee, 1999). The apartheid laws that used to be in effect in South Africa, Zimbabwe (former Rhodesia) and the United States were legal in these countries, but they were also sharply criticized on ethical grounds (De George, 2014, pp. 11, 21, 34, 125, 182–184). Laws can be immoral. The contents of business ethics and law can also differ due to time lag effects. Since it often takes a number of years for a law to be passed, the public awareness of and discussion on certain ethical issues is sometimes activated prior to legislation taking effect (Stone, 1975). Finally, laws can differ from ethics because laws are the result of political compromises, which possibly lack underlying moral consensus. Morally, one may not fully agree with the law, but most people understand that compromise is necessary to maintain social peace. In the Netherlands, selling tobacco to anyone above 16 years of age is legal, whilst advertising tobacco products in public spaces is banned altogether. This somewhat artificial regulation bears the marks of a political compromise. When there is no moral consensus, but some form of regulation is still called for, the legal compromise offers a way out. In the spirit of a democratic society, citizens and businesses understand that political compromises are ultimately more beneficial than trying to force personal opinions upon dissenting others.

2.2.3 The Procedures of Business Ethics and Law Next to comparing the content of business ethics with that of the law, one can also compare their modus operandi, or inner mechanism.2 I will refer to this as the procedural aspects of ethics and law. An important procedural difference between law and ethics lies in the motivation to adhere to normative standards. Ethics always requires an inner motivation: people must urge themselves to behave morally, from an inner agreement with a moral principle. And they must be free to do so. Otherwise, there is no question of their acting ethically (Velasquez, 2014). Law does not require such inner agreement or inner motivation. Ultima ratio, the law is based on external compulsion. Every law, says Austin, “is a command” (Austin, 1955, p. 13). According to Hart, the existence of the law “means that certain kinds of human conduct are no longer optional, but in some sense obligatory”  Inner motivation is a highly complex issue to understand in individuals, let alone in companies. Yet we call corporations ‘persons’, some assume that these persons have a ‘life’, and even ‘citizenship’ (Monks & Minow, 2009, p. 14). It seems a small step to consciousness, or even personal ethics. This attitude assumes that institutions can think by themselves or have a kind of derived cognition. In How Institutions Think (1986), anthropologist Mary Douglas offers a critique of the rational choice theory of social anthropology. According to her, the way in which people cooperate in organizations cannot be explained by individual advantage, because too many empirically observed phenomena point in the opposite direction. Take, for example, the phenomenon of self-­ sacrifice. Douglas’ study builds on the anthropology of Émile Durkheim and Ludwik Fleck, among others, and aims to discuss alternative explanations, based on analogies from pre-modern communities (Douglas, 1986). After all, we may never have been modern (Latour, 1991). 2

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(Hart, 1961, p. 6). Laws typically involve the threat of sanctions. A major advantage of preferring law to ethics, is that it frees citizens and businesses from the need to create an inner motivation for their social behavior (Habermas, 1996). Ethical norms of action can simply be transformed into laws, and businesses can obey laws simply because they are being enforced. Viewed from this perspective, law-abidingness does not require any intrinsic moral motivation. Some business ethicists support this legalistic view, by stating that business activities are sufficiently legitimized when the actions adhere to the letter of the law and respond to consumer demands. The law is a set of public, democratically agreed, and hence legitimate, rules that business should abide by. Ethics is private and idiosyncratic and does not constitute a good social compass for business conduct. Businesses should follow the law while not interfering with its making. The classical formulation of this view was presented by Milton Friedman (1970) and has been adopted by some business ethicists in the United States of America (notably Bowie, 1990) and, with some variations, by German business ethicists, who belong to the school of ‘ordoliberalism’ (Homann & Blome-Drees, 1992; Homann & Lütge, 2005). A second procedural difference between business ethics and the law is that the legal method is based on providing security and conclusive answers, whereas ethics is based on dealing with insecurity. Law is a way of settling conflicts by passing clear judgements, whereby each party does its utmost to demonstrate that it is in the right (cf. Frischhut, 2019, pp. 2, 8, 59–60). Court cases are a kind of contest to see who can submit the strongest legal arguments. Those who make the best case and manage to convince the judge win. In the legal system, disputing parties do not attempt to convince each other. Also, there is no trust between the opposing parties. Legal bodies are designed to handle such disputes quickly and efficiently. Moral deliberation avails itself of a very different method. Here, parties only put forward points of view they really believe in, and they try to convince their opponents. At the very least they try to generate understanding for their point of view. One of the rules of good moral deliberation is trying to understand the other’s ideas, especially if you do not agree with them. Another rule is trusting in each other’s sincerity. Moral deliberation is not designed to resolve issues efficiently (cf. Gadamer, 2004, pp. 311, 363). It is often exploratory with no solution of any kind being reached. Parties are satisfied if they have acquired better mutual understanding and greater clarity. German business ethicists Homann and Blome-Drees have developed a double viewpoint on how business ethics can be effective, without being transformed into law. Their theory provides helpful insights into the dynamics between business ethics and law. The authors distinguish between two business ethical strategies- the ‘competition strategy’ and the ‘political ordering strategy’- both of which are based upon the principle of voluntary moral self-regulation. In the ‘competition strategy’, the individual corporation reacts to a lack of legitimacy of its own actions. This is done either by developing new products and production methods in which moral and economic objectives are in harmony, or by committing to the social ethos through the company image, following the motto, ‘do good, and talk about it’. In the ‘political ordering strategy’, business firms together, in a form of joint

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self-­ regulation, accept their common political responsibility to close the gap between legality and moral legitimacy, for instance by means of a voluntary industry code or a covenant (Homann & Blome-Drees, 1992). The authors consider these ethical approaches to be consistent with ‘ordoliberalism’ because they are considered standard market practice. Business ethicists who have conceptualized the idea of a ‘political corporate social responsibility’, also propose forms of self-regulation through informal rules and soft law, with little rules and low levels of formal obligation (Scherer & Palazzo, 2011).

2.2.4 The Functions of Business Ethics and Law Based on their different procedures, business ethics and law also fulfil different social functions. By having some matters provided for by law, while leaving others to be decided by ethics, citizens can enjoy a mix of freedom and compulsion that offers the best framework for a good, prosperous, and pleasant life. Sometimes it is smartest to agree that something is obligatory; at other times it may be better to leave things up to the free will of the individual. Agreements relating to the prevention of harm and the provision of basic facilities are legally regulated in most societies. With regard to such matters, people want security and do not want to rely on the benevolence of others. Thus, drinking and driving is forbidden, and asbestos may no longer be used in construction. In the case of things relating to optimization and areas of life where we value our freedom, we prefer to regulate through ethics. For example, there are plenty of opportunities to donate to charity, but it is not mandatory. Habermas assigns a ‘transformer function’ to law, which establishes a link between the communicative interaction in the lifeworld and the strategic interaction in the sub-systems of economy and bureaucracy. Under democratic conditions, law integrates the goal-rationality of functional sub-systems with the moral sources of legitimization in the lifeworld. The input for law is formed by the political-ethical outcomes of discussions in the public sphere which, following several filtering steps in the democratic decision procedures, are turned into the output of sanctioned legal regulations. According to Habermas, the law is the only link that connects the two main spheres of society. Normative content from the lifeworld can penetrate the other part of society, only when expressed in the ‘language’ of the law. Without the transformation into the code of law, normative content would fall on deaf ears in the rationalized spheres of action (Habermas, 1996, p. 56). The metaphor of ‘transformation’ is derived from the world of electricity. A transformer is a device that changes a high voltage electric current into a low voltage current. A transformer thus changes an input that an electric system cannot handle into one that it can handle. For business ethics, Habermas’s view of the transformer function of law has an important implication. It is not ethics, but it is the law that effectuates the integrative linkage between ethics and business. Businesses cannot handle ‘pure’ undiluted ethics. The exhortations and appeals that come from ethics do ‘gel’ with the rationalistic logic of procedural bureaucratic and strategically oriented management

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decision making. They need to be translated into a ‘different’ code that makes bureaucratic sense. This is where law has to step in, by repackaging the ethical content in a different form, namely the legal form. In the world of business, ethics can only operate through its content—not through its form—and only law is capable of making ethics effective. In having these different social functions, business ethics and law are complementary. To recapitulate, in this section I found that in business ethics literature, the relationship between law and ethics is conceived of as a structurally stable mutuality, in which the two institutions interact with each other in ways that can be reinforcing, complementary, or opposing, but without fundamental incompatibilities, antagonism or imbalances. In the following sections, it will be argued that this ostensibly stable and relatively harmonious picture obscures to the view a much more volatile and violent relationship between the two, in which ethics is systematically colonized by law (Habermas, 1987, p. 70), through processes of juridification that start small and appear ‘informal’, ‘soft’ and relatively ‘voluntary’ (Scherer & Palazzo, 2011, p. 908), but which are in fact instruments of the colonization of the dwellings of the ethical by the disciplining forms of the legal.

2.3 The Juridification of Business Ethics There is nothing specifically ‘businesslike’ about the relationship between law and ethics. The treatise that follows would not be making a specific contribution to business ethics if it were only to study the articulation of law and ethics, illustrated by examples from the business world. I will demonstrate, however, that within business ethics, several specific formats have developed that channel the process of juridification of business ethics in very concrete ways. Voluntary agreements are seen to fulfil an important, intermediate position between business ethics and law. They are part of a wider set of institutional phenomena, often referred to as ‘soft law’. Voluntary agreements appear to offer a number of advantages over legislation in terms of processing speed, flexibility and cost effectiveness. Businesses can be encouraged to participate in voluntary agreements on the basis of several motives, including the concept of shared responsibility, the concept of stakeholder involvement, the principle that a problem should be solved at the level where it can be most effectively addressed (subsidiarity-principle), as well as the goal of reducing (the costs and power of) public administration (Ten Brink, 2002, p. 14). The question is, however, whether voluntary agreements are a stable institution, or whether they are also subject to the dynamics of juridification. Do voluntary agreements tend to evolve over time into more enforceable juridical forms; and do new ethical concerns enter the preliminary stage of voluntary agreements? If so, then this transitory characteristic has an obvious implication for the status of voluntary agreements. The performative force of the transitory nature of voluntary agreements will be fed back into this institution, and a likely outcome is that the ‘life span’ of voluntary agreements, on the trajectory between business

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ethics and law, will become shorter and shorter, thus transforming business ethics into law at increasing speed. On the other hand, it must be acknowledged that some forms of voluntary industry codes have had a very long lifespan (covering half a century or more). Ethical self-regulation in the advertising industry in Europe is a good example (Batikas et al., 2019). This phenomenon triggers an analysis of the institutional conditions of the temporal stability of some forms of business self-regulation. It is expected that other forms of soft law will exhibit the same dynamics as voluntary self-regulation. Generally, agreed ‘principles’, ‘reporting standards’, ‘audit mechanisms’ ‘certificates’, ‘action plans’, ‘guidelines’, ‘multi-stakeholder initiatives’ et cetera, in the context of the United Nations, the OECD or elsewhere, all function through the mechanism of ‘non-binding coercions’ (Zerilli, 2010), which characterizes them as soft law, and which locates them somewhere on the trajectory between business ethics and law. Many of these new intermediate regulatory forms are operational in a situation where the legal form is not fully present, notably in the international context and in the contexts of immature or failing national jurisdictions. It is in this context that the appeal for a ‘political CSR’ has recently emerged, which opens the gates to the juridification of business ethics on a large scale, by naively and uncritically assuming that ethics can be politicized without paying the price of juridification (Scherer & Palazzo, 2007). Political CSR is an example of the politicization of business ethics. The emerging intermediate ‘ethico-legal’ institutions promise effectiveness in resolving conflicts over contracts or contested social issues, but the introduction of these hybrid institutions between ethics and law comes at a price, namely that business ethics assumes the form of a ‘legally thought business ethics’. Problems arise wherever there is a strong emphasis on the ‘camera iuridica’ in business ethics. The greatest problem I see is that the juridification of business ethics deprives business ethics of its identity and of its specific functions, such that the unique social contribution of ethics as a social institution vanishes from social and economic life. In the following paragraphs I propose how this camera iuridica in business ethics can be studied in a critical way. This is done by applying the methodology of the Critical Legal Studies Movement to various forms or mechanisms that are often referred to as business ethics. By applying the critical-legal concepts of ‘formalism’ and ‘objectivism’ to business ethics, I arrive at three arguments why the functioning of self-regulatory mechanisms does not belong to the ‘domain’ of business ethics, but to the ‘empire’ of law. In the first place, in such mechanisms, ethics is ultimately and unavoidably reduced to a variety of prescribed behaviors and rules of compliance that are to be observed. In other words: anyone who wants to say something about ethics in this vein is driven to also say something about mandatory behavior, which unavoidably places ethics within the realm of discipline and positive law. Secondly, the rules or principles agreed in self-regulatory mechanisms are supposed to represent ethics. Legally thought ethics thus replaces any impulse to consider ethical issues. This ethics, which is intended as a minimum performance requirement, becomes a de facto maximum (Paine, 1994). Thirdly, such self-regulatory mechanisms are incapable of taking the concrete human being into account. Instead,

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the camera iuridica is only capable of considering an abstraction of the concrete human being: i.e., a ‘legal subject’. In this way, what is called ‘ethics’ becomes a kind of art of decision-making. What is presented as ethics thus becomes a disguised form of law: just another Foucauldian disciplinary mechanism. It will now be discussed what alternatives exist for a legally thought business ethics, i.e., an ethically thought business ethics, inspired by the French thinker Michel Foucault. I will end this chapter with a conclusion.

2.4 Critical Business Ethics Studies Foucault came up with the concept of the strategic-productive idea of power. ​​ Power is not owned by a social entity, but rather is anonymous and can be used by a social entity—be it an individual or a group. Power exists in the relationship between those entities, or between rulers and those who are controlled. At the root of Foucault’s thinking was an inexorability to bring these power relationships to light. He believed that the relationships between the ruler and the controlled were endemic to modern society. According to Ward, we are, for instance, constantly encouraged to live healthily, follow a diet and exercise a lot, so that health gurus and sportswear manufacturers can earn a lot of money off of us. In addition, we all must purchase a home so that banks and building associations can continue to grow. Ultimately, we all strive towards a good civilian life, in which we are healthy and happy and can pursue our ideals. In order to do so, we need rules and regulations to encourage us to do all those things that are ‘good’ for us. This is the so-called ‘disciplining process’ (Ward, 1998, p. 144). That which deviates from the norm, from the order of things, from the model, but still finds expression in the world, must be embedded in a legal or an ethical code so that it can be treated, corrected, improved, made calculable through punishment, excommunication, indoctrination—in short: through discipline (Connolly, 1993, p. 69).

2.4.1 Foucault’s Protest Against Ethics and Law At the core of Foucault’s thinking is the concept that power and knowledge are intimately complementary and mutually reinforcing in this process of disciplining. Knowledge is produced by rulers (e.g., scientists) who are considered authoritative during a certain period. The rulers master the ‘conditions of the possibility’ of knowledge. What we know is only knowledge that we can know. If this were not true, no form of censorship would be needed for judicial protection of certain government documents, for cinema censorship, for national curricula in schools, trade secrets, et cetera. The law is an element and an expression of power (Ward, 1998, p. 147). According to Foucault, law is an expression and exercise of power, justifying itself as the normal or natural state in one way or another. This is what the English legal scholar Fitzpatrick calls ‘the mythology of modern law’ (1992).

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In Foucault’s view, ethics, like law, is an instrument of a certain political and economic power, or it is a weapon against that power. Whomever wants to study business ethics, therefore, does not (only) study philosophy or the Platonic ‘Good’, but also the politics and power of governments and companies. The idea that legal or ethical rules are merely expressions of power was accentuated in Foucault’s ideas about governmentality. The exercise of power was facilitated in the second half of the twentieth century by the use of legal strategies and techniques that limited individual freedoms from serving an ethical or political ideal. Neoliberal states developed all kinds of indirect techniques for controlling people, without these states ever appearing to be responsible for the subsequent behavior of those people. The technique of making people ‘responsible’ implied that responsibility for social risks (such as illness, unemployment, and poverty) and for life in society was shifted to the domain for which only the individual was responsible. Every business problem thus transformed into a voluntary, individual problem. This ‘personal responsibility’ was assumed to have been taken away from the individual, but returned to it by policy (Lemke, 2001, p. 201). These legal strategies and techniques did more, however, than just impose rules and regulations. These were completely new regulatory styles that were partly legalistic and partly governmental (Ward, 1998, p. 149–150). Two of these modern regulatory formats are noteworthy in that they have been given a prominent, interchangeable place in the discourse of business ethics, namely the figures ‘self-regulation’ and ‘alternative dispute resolution’ (ADR). The implied voluntariness thereof is what makes these regulatory styles appear legitimate What makes them appear effective is their decisiveness and governmentality. This is business ethics ‘legally thought’.

2.4.2 A Legally Thought Business Ethics Focusing on law, the Critical Legal Studies movement (CLS) has adopted a critical attitude. Although the origins of CLS can be traced back to the 1960s, the movement originated at a conference held in 1977 at the University of Wisconsin-­ Madison. Representatives of the movement originally came from the United States of America and taught, as it were, a postmodernist law—a legal exegesis of Critical Theory, postmodernism, and Derrida’s deconstruction (Beedham, 2001, p. 67; Maris & Jacobs, 2011, p. 25). For the adherents of Critical Theory3 art and philosophy, for example, form a unity, which ensures that any consciousness that criticizes the status quo of reality is an aesthetic consciousness (cf. Marcuse, 1978). The company of the ‘Crits’, as they were called, was not uniform and assumed all manner of forms. It has introduced all kinds of new areas of law, such  Critical theory is a sociological-philosophical analysis of bourgeois-capitalist society inspired by Marx, Weber, and Freud, among others, and used by representatives of the Frankfurt School. The theory emphasizes cultural factors in the ideology of capitalism. The aim of this theory is not only to explain reality, but also to change it. 3

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as postmodern jurisprudence, law and aesthetics, psychoanalysis, queer theory, postcolonial studies, law and literature, and so on and so forth. In addition to the political right-wing ‘law and economics’ school (e.g., Ronald Coase, Richard Posner) and the center liberal ‘law and principles’ school (Ronald Dworkin), there is also the CLS school, of which one of the Crits, Roberto Unger, in particular, commented that it resembled a political leftist legal movement—a legal movement based on the principle that law and legal doctrine reflect, confirm and reform social divisions and hierarchies inherent in a type or phase of social organization, such as capitalism (Unger, 1986, pp. 1, 4, 120; Goodrich, 1993; Kennedy, 1997, pp. 1–20, 55, 69). It is assumed that the foundation of law is and remains the fruit of human labor. As Jean-Jacques Rousseau once wrote: “we must not attempt the impossible, nor flatter ourselves into thinking that the works of men can be given a degree of solidity that is denied to human things” (Rousseau, 1999, p.  121). Inevitable power relations exist within that human work. In all areas, the Crits have always tried to uncover, and deconstruct those hidden power constructs. This is because, according to Unger (1986): The search for the less conditional and confining forms of social life is the quest for a social world that can better do justice to a being whose most remarkable quality is precisely the power to overcome and revise, with time, every social or mental structure in which he moves. (p. 23)

CLS must, therefore, be a movement that promotes the ‘re-ethicalization of law’ and the ‘commandment of morality in legal operations’ (Goodrich et al., 2005, p. 17). Ethical codes, self-regulation, and ADR can fulfill a valuable function. For example, they can inform participants of the limits of acceptable behavior. In addition, we must not forget the efficiency aspect; through the effective socialization process associated with these forms of legal ethics, self-regulation creates efficiency in enforcing behavioral expectations (Salbu, 1992, p. 103). The pointe, however, is that no matter how positive a legally thought business ethics is intended to be, it is always just morality, in the sense of a positive ethics, not a critical ethical reflection. It is unethical in principle not to assume that freedom is the ontological foundation of ethics, as Foucault has argued convincingly. Codes, self-regulation, and all sorts of ADR, therefore, do not have a different effect on human beings than the law—be it substantive or procedural: they establish specific rules and principles that are legal in the rigidity or flexibility of their application (Dworkin, 1978, pp. 24–28). To show that these so-called business ethical formats are not ethical, but legal formats, they can be put alongside the quantities that Roberto Unger grants exclusively to the law, namely ‘formalism’ and ‘objectivism’. Formalism and objectivism are the central themes in Unger’s study, The Critical Legal Studies Movement (1983). He explains them as follows. • ‘Formalism’ is the conviction that law making “guided only by the looser and more inconclusive arguments suited to ideological disputes”—i.e., “the willingness to work from the institutionally defined materials of a given collective tradition”, and “the claim to speak authoritatively within this tradition, to elaborate it from within in a way that is meant, at least ultimately, to affect the application of

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state power”—differs fundamentally from law application: “Lawmaking and law application diverge in both how they work and how their results may properly be justified” (Unger, 1986, p. 2). • ‘Objectivism’ is “the belief that the authoritative legal materials—the system of status, cases, and accepted legal ideas—embody and sustain a defensible scheme of human association. They display, though always imperfectly, an intelligible moral order. Alternatively, they show the results of practical constraints upon social life—constraints such as those of economic efficiency—that, taken together witch constant human desires, have a normative force. The laws are not merely the outcome of contingent power struggles or of practical pressures lacking in rightful authority” (Unger, 1986, p. 2). Feinberg has already argued that importing legal figures into a non-legal discourse has a certain effect. Legal terms are often too focused on their own legal context so as to be fully applicable outside of them without the danger of the ‘Legalistic Mistake’ (Anscombe, 1963; Feinberg, 1964, pp. 161–163, 167–169). Business ethics often uses terms that also have a legal meaning. The language of ethics is, however, less precise than that of law. Attempts to establish rules, regulations, principles and procedures by means of self-regulation under the name of ethics (e.g., Peppet, 2004, p. 78; Bryant, 2009; Spalding & Kim, 2015; Bultena et al., 2018; Schormair & Gerlach, 2019) are usually undertaken in good faith, but for three formalistic and objective reasons belong to the domain of law in business ethics, and thus to a ‘legally thought business ethics’. Those reasons are the following: • In the first place, they depart from a concept of ethics that is ultimately reduced to an ethical behavioral change methodology, aimed at manipulating sources of influence over (un)ethical behavior at work (Bandura, 1969; Kish-Gephart et al., 2010). This is an objectivistic, heteronomous view of ethics in comparison to its alternative, i.e., the expectation of autonomous thought, autonomous analysis, and consultation. It is also a dangerous conception of ethics. The replacement of personal authority by centralized institutional authority, such as an ‘ethics officer’, ‘ethics committee’, or a ‘code of ethics’, ensures formalistic ethical validation through authority and increases the potential for brainless behavior (Salbu, 1992, p.  130). This is not exceptional for business ethics; in the absence of a generally substantive morality, modern ethics appears to be primarily procedural, and formally focused. In this regard, legitimate formal requirements are guarantees for fair decision-making. • Secondly, the legal concept of business ethics inadvertently creates the impression that compliance with a self-regulatory code is sufficient formalistic fulfillment of ethical considerations, by virtue of the fact that self-regulation is deemed to already have considered the important moral questions. In short, the ethical code represents the desired ethical order (objectivism). In this way, self-­regulation can, for example, stifle any impetus to consider ethical issues that might otherwise arise outside the limited field of vision of the self-regulatory code. This version of ‘ethics’, which is intended as a minimum performance requirement, can instead create a formalistic de facto maximum (Salbu, 1992, p. 130).

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• Thirdly, just like law, self-regulation is incapable of taking the concrete person into account. The structure, objectivism, is only capable of taking into account an abstraction of man: the ‘subject’ (cf. Unger, 1984, p. 58). Man is objectified to subject. This means that self-regulation, like the law, is incapable of considering the uniqueness of man, the ‘unique individual’ (Douzinas & Warrington, 1994, p.  21). Accordingly, ethical codes and self-regulation do not serve ethics, but fundamentally the opposite. As a result of this unethical formalism, sociological jurisprudes and legal realists have advocated an informalist attitude, a ‘distrust of abstraction’ (Kennedy, 1997, p.  106)—a distrust that we can also discern in Nietzsche when he wrote: “I mistrust all systematizers and avoid them. The will to a system is a lack of integrity” (Nietzsche, 1997, p. 9, §26). In this way of thinking, there is, therefore, no distinction between (the panoptic of) law and (the panoptic of) ethics (Foucault, 1995). In other words, people gain the status of subject by being subject to a discourse. Such a discourse decides what can and cannot be said and thought. Within business ethics, therefore, a camera iuridica is formed within which it is only possible to think in terms of forced, involuntary submission. To the extent that business ethics is legally thought, it creates subordinated people—‘subjects’—and what we call ethics is nothing more than a reflection, confirmation, and reiteration of the legal status quo. In that case, business ethics is nothing more than an apologia of law.

2.4.3 An Ethically Thought Business Ethics In his earlier work Foucault focused on the creation of the history of different modes of objectification, so that people in our culture become subjects (Foucault, 1982, p. 777). In his later work he turned towards the idea of ethics with freedom as an ontological basis. He searched for possibilities in which people self-impose rules of conduct and tried to transform themselves. His assumption being that power is only exercised over free people, and only to the extent that they are actually free. The relationship between power and the refusal of freedom to submit to that power can, therefore, not be viewed separately. In his famous interview with Fornet-Betancourt, Becker, Gomez-Müller, and Gauthier on January 20, 1984, Foucault stated that ‘taking care of oneself’ is a ‘practice of freedom’ within and in relation to power structures, the purpose of which is not to dissolve the productive and omnipresent power, but to critically relate to it (Fornet-Betancourt et al., 1987; Bergen & Verbeek, 2020). Foucault provides two ways of relating to the formalism and objectivism of a legally thought business ethics. The first way is as a ‘moral agent’ (‘agent moral’), the second way is as an ‘ethical subject’ (‘sujet éthique’) (Foucault, 1990, p. 26). To briefly describe this Foucauldian parole: the moral agent follows the ethical code to its letter (a legal, grammatical interpretation), while the ethical subject consciously chooses a certain critical attitude in relation to the code (Woermann, 2013, p. 15). Business ethics, acting as a technique, assumes and creates computable moral

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agents. While in a legally thought business ethics we are called upon to decide whether or not we obey the rules. In an ethically thought business ethics our reasoning is prompted by questions that neither allow or require clear and definable answers (Salbu, 1992, p. 104; Woermann, 2013, pp. 13–14). In this way law, being what an agent requires (compliance) and ethics, being what a subject requires (consideration), are, therefore, actually two distinct realms, just as legally thought and ethically thought business ethics are two separate realms. Bauman assigned the following descriptions to these realms in his Postmodern Ethics (1993): The organization’s answer to such autonomy of moral behaviour [sic] is the heteronomy of instrumental and procedural rationalities. Law and interest displace and replace gratuity and the sanctionlessness of moral drive: actors are challenged to justify their conduct by reason as defined either by the approved goal or by the rules of behaviour [sic]. (Bauman, 1993, p. 124)

So, opposed to the coercion, formalism, computability, instrumentalism, rationality, institutionalism, heteronomy, predictability, rules system and punishability of law, is its antipode: ethics. What does this mean for business ethics in practice?

2.5 The Eternal Impasse of Business Ethics? When we apply a deconstruction to different forms of what we understand by business ethics, we can see that there is such a thing as a ‘legally thought business ethics’. Just as language cannot be totally purified from its grammatica, I do not advocate purifying business ethics of its iuridica—that would be an impossible and unnecessary task. In addition, it is generally the case that moral philosophy can be divided into a group of—more—legal ethicists, or ‘legislators’, and a group of ‘moral perfectionists’. The legislators, represented by thinkers such as John Rawls and Jürgen Habermas, offer detailed norms, rules, standards, and principles that together form a legal ‘theory of justice’. They want the formation of ‘moral agents’. The moral perfectionists, on the other hand, believe that ethics should be based on some existential dedication that goes beyond the theoretical rigor of justice, or a socially institutionalized ethical code. We find this perfectionism in Emmanuel Levinas, for example. For Levinas, ethics cannot be reduced to an abstract rule or formality that regulates a group of people, removes mutual contradictions, and thus brings about harmony. Ethics would then only be a description of an immanentizing or totalizing community without friendship and faces (Critchley, 2014, p. 233, 300). The moral perfectionists want the formation of ‘ethical subjects’. The mere recognition that there is such a thing as a legally thought business ethics, and that this ‘legal’ ethics deserves a special legal criticism compared to ‘ethical’ or ‘non-legal’ ethics, suffices to acknowledge the importance of ‘ethical’ business ethics. Legal thinking strives for generality and uniformity. It calculates based on similarities and differences and tries to subject people to a rule. Ethical thinking, on the other hand, attempts to take particularity and pluralism into account. These two discourses entail an almost imperceptible, but at the same time infinite, distance

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within business ethics. On the one hand between the calculable subsumption of law, and on the other hand the unpredictable responsibility of ethics (Goodrich et al., 2005, p. 22). The moral perfectionist conviction in ethics is that an ethical theory that does not express the basic need to think beyond the formalism of codification has no compelling way to explore the source of one’s ethical motivation, or to explain the foundations of one’s ethical theory. The paradox of this moral perfectionism is, of course, that perfection is impossible to achieve, but that imperfection simultaneously makes an ethical appeal to us (Critchley, 2014, p. 300). So, if there are criteria for business ethics, they are then aporetic; they are temporary criteria of doubt that precede calculated subsumption; every ethical decision requires a unique interpretation that no existing regulation, procedure, or code can or should fully guarantee. The bilaterality of law and ethics makes the business ethics discipline aporetic, namely at the same time necessary and impossible, calculating and risky, unjust and just (Goodrich et al., 2005, p. 22; Derrida, 2002, p. 251–252). Business ethics, therefore, has the task of demonstrating an unrelenting capacity for questioning regulations, codes and procedures, within the (critical, post-modern) notion that all these behaviors are guiding styles, styles of submission. This ‘business ethics of deconstruction’ can, therefore, not be reconciled with any claim to ethical certainty, good conscience, or a clear sense of duty, because deconstruction is the dissensual moment at which it interrupts the argumentative process that leads to consensus (Critchley, 2014, p. 254). Without having to resolve the law within business ethics, the business ethicist should, therefore, not be an apologist of the law, but a skeptic of the law, just as the CLS movement has assumed this responsibility: business ethics should, therefore, be a critical ‘attitude’ instead of a complimentary ‘apology’.

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Gadamer, H.-G. (2004). Truth and method. Continuum. Goldman, A. (1980). Business ethics: Profits, utilities and moral rights. Philosophy and Public Affairs, 9(3), 260–286. Goodrich, P. (1993). Sleeping with the enemy: An essay on the politics of critical legal studies in America. New York University Law Review, 68(2), 389–426. Goodrich, P., Douzinas, C., & Hachamovitch, Y. (Eds.). (2005). Politics, postmodernity and critical legal studies: The legality of the contingent. Routledge. Graafland, J. (2010). Do Markets crowd out virtues? An Aristotelian framework. Journal of Business Ethics, 91(1), 1–19. Habermas, J. (1987). Theory of communicative action, Vol. 2. Heinemann. [Transl. of Theorie des kommunikativen Handelns, Vol. 2, Frankfurt am Main, Suhrkamp, 1981]. Habermas, J. (1992). Faktizität und Geltung. Beiträge zur Diskurstheorie des Rechts und des demokratischen Rechtsstaats. Suhrkamp. Habermas, J. (1996), Between facts and norms. Contributions to a disourse theory of law and democracy. MIT Press [Transl. of Faktizität und Geltung: Beiträge zur Diskurstheorie des Rechts und des demokratischen Rechtsstaats. Frankfurt am Main: Suhrkamp, 1992]. Hart, H. L. A. (1961). The concept of law. Oxford University Press. Heath, J. (2014). Morality, competition and the firm: The market failures approach to business ethics. Oxford University Press. Homann, K., & Blome-Drees, F. (1992). Wirtschafts- und Unternehmensethik. Vandenhoeck. Homann, K., & Lütge, C. (2005). Einführung in die Wirtschaftsethik. Lit Verlag. Hunt, P. (2009). Missed opportunities: Human rights and the commission on social determinants of health. Global Health Promotion, 1, 36–41. Jansen, B. (2021a). Dispute resolution as an ethical phantasm: Alternative justice under the spell of law. Philosophy of Management, 20(1), 293–306. https://doi.org/10.1007/s40926-­020-­00156-­8 Jansen, B. (2021b). New materialism in business ethics: The juridical form as disciplinary apparatus. International Journal of Management Concepts and Philosophy, 14(1), 64–80. https://doi. org/10.1504/IJMCP.2021.115611 Jeurissen, R. J. M. (2000). The social function of business ethics. Business Ethics Quarterly, 10(4), 821–843. Jeurissen, R. J. M. (2007). Ethics and business. Van Gorcum. Jonsen, A., & Toulmin, S. (1988). The abuse of casuistry: A history of moral reasoning. University of California Press. Kaptein, S.  P. (2011). Toward effective codes: Testing the relationship with unethical behavior. Journal of Business Ethics, 99, 233–251. Kennedy, D. (1997). A Critique of Adjudication {fin de siècle}. Harvard University Press. Kish-Gephart, J., Harrison, D., & Treviño, L. (2010). Bad apples, bad cases, and bad barrels: Meta-­ analytic evidence about sources of unethical decisions at work. Journal of Applied Psychology, 95(1), 1–31. Latour, B. (1991). Nous n’avons jamais été modernes. Essai d’anthropologie symétrique. La Découverte. Lemke, T. (2001). ‘The birth of bio-politics’: Michel Foucault’s lecture at the Collège de France on neo-Liberal governmentality. Economy and Society, 30(2), 190–207. Machan, T., & den Uyl, D. (1987). Recent work in business ethics: A survey and critique. American Philosophical Quarterly, 24(2), 107–124. Marcuse, H. (1978). The aesthetic dimension: Toward a critique of Marxist aesthetics. Beacon Press. Maris, C. W., & Jacobs, F. C. L. M. (2011). Law, order and freedom: A historical introduction to legal philosophy. Springer. Martinez, J.  M. (1998). Law versus ethics: Reconciling two concepts of public service ethics. Administration & Society, 29(6), 690–722. Melé, D. (2002). Not only stakeholder interests: The firm oriented toward the common good. In S. Cortright & M. Naughton (Eds.), Rethinking the purpose of business: Interdisciplinary essays from the Catholic social tradition. University of Notre Dame Press.

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Melé, D. (2009). Business ethics in action: Seeking human excellence in organizations. Palgrave. Monks, R. A. G., & Minow, N. (2009). Corporate governance. Wiley. Murphy, T. (1994). As if: Camera Juridica. In P. Goodrich, C. Douzinas, & Y. Hachamovitch (Eds.), Politics, postmodernity and critical legal studies: The legality of the contingent. Routledge. Neil Brady, F., & Dunn, C. (1995). Business meta-ethics: An analysis of two theories. Business Ethics Quarterly, 5(3), 385–398. Nietzsche, F. W. (1997). Twilight of the idols: Or, how to philosophize with the hammer. Hackett Publishing Company. Paine, L.  S. (1994). Managing for organizational integrity. Harvard Business Review, 72(2), 106–117. Peppet, S. R. (2004). ADR ethics. Journal of Legal Education, 54(1), 72–78. Poppo, L., & Zenger, T. (2002). Do formal contracts and relational governance function as substitutes or complements? Strategic Management Journal, 23(8), 707–725. Rodriguez-Dominguez, L., Gallego-Alvarez, I., & Garcia-Sanchez, I. M. (2009). Corporate governance and codes of ethics. Journal of Business Ethics, 90, 187–202. Rousseau, J.-J. (1999). The social contract. Oxford University Press. Salbu, S. R. (1992). Law and conformity, ethics and conflict: The trouble with law-based conceptions of ethics. Indiana Law Journal, 68(1), 101–132. Scherer, A. G., & Palazzo, G. (2007). Toward a political conception of corporate responsibility: Business and society seen from a Habermasian perspective. Academy of Management Review, 32(4), 1096–1120. Scherer, A. G., & Palazzo, G. (2011). The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of Management Studies, 48(4), 899–931. Schormair, M.  J. L., & Gerlach, L.  M. (2019). Corporate remediation of human rights violations: A restorative justice framework. Journal of Business Ethics. https://doi.org/10.1007/ s10551-­019-­04147-­2 Schwartz, M. S. (2011). Corporate social responsibility: An ethical approach. Broadview Press. Schwartz, M.  S., & Carroll, A.  B. (2003). Corporate social responsibility: A three-domain approach. Business Ethics Quarterly, 13(4), 503–530. Singer, M. (1961). Generalization in ethics: An essay in the logic of ethics, with the rudiments of a system of moral philosophy. Knopf. Spalding, A., & Kim, E.-J. (2015). Should Western corporations ban the use of Shari’a arbitration clauses in their commercial contracts? Journal of Business Ethics, 132(3), 613–626. Sternberg, E. (2000). Just business: Business ethics in action. Oxford University Press. Stone, C.  D. (1975). Where the law ends: The social control of corporate behavior. Harper and Row. Ten Brink, P. (2002). Voluntary environmental agreements: Process, practice and future use. Greenleafe. Treviño, L. K., & Nelson, K. (1999). Managing business ethics: Straight talk about how to do it right. Wiley. Treviño, L. K., & Nelson, K. (2013). Managing business ethics: Straight talk about how to do it right. Wiley. Treviño, L. K., Weaver, G. R., Gibson, D. G., & Toffler, B. L. (1999). Managing ethics and legal compliance: What works and what hurts. California Management Review, 41(2), 131–151. Unger, R. M. (1984). Knowledge and politics. Free Press. Unger, R. M. (1986). The critical legal studies movement. Harvard University Press. Van Luijk, H. (1998). Het morele domein van de onderneming [The moral domain of the enterprise]. In B. Hessel & P. de Graaf (Eds.), Over recht en bedrijfsethiek. Pleidooien voor samenwerking (pp. 53–65). Ars Aequi Libri. Velasquez, M. G. (2014). Business ethics: Concepts and cases. Pearson. Ward, I. (1998). An introduction to critical legal theory. Cavendish Publishing.

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Wicks, A. C., Freeman, R. E., & Werhane, P. (2010). Business ethics: A managerial approach. Prentice Hall. Woermann, M. (2013). On the (Im)possibility of business ethics: Critical complexity, deconstruction, and implications for understanding the ethics of business. Springer. Zerilli, F.  M. (2010). The rule of soft law: An introduction. Focaal—Journal of Global and Historical Anthropology, 56(Spring), 3–18.

Chapter 3

The Juridical Disclosure of Ethics in the Netherlands and Indonesia A Comparative Study of Reasonableness and Fairness

That art is above nature is no new discovery. New principles do not fall from heaven, but are logically if indirectly connected with past and future. What is important to us is the momentary position of the principle and how best it can be used. It must not be employed forcibly. But if the artist tunes his soul to this note, the sound will ring in his work of itself. (Kandinsky, 1912, pp. 111–112)

3.1 Introduction Both Dutch and Indonesian corporate law contain ‘open norms’. This means that there is room for interpretation of the content and purpose of these standards. The best-known Dutch open norm is that of ‘reasonableness and fairness’—a standard also known in Indonesia as ‘reasonableness and fairness’ and as ‘good faith’. In this contribution, the common origins of this standard, as well as developments in the interpretation thereof in both jurisdictions, will be examined and analyzed. There are examples of open norms in corporate law which have been adopted in many jurisdictions around the world, e.g., the renowned ‘comply or explain’ open norm which can be found in almost every corporate governance code in the world today (Sewbaransingh & Koster, 2019, p. 916). This originally British principle has marched triumphantly through the corporate laws of many countries within a very short timeframe. The Cadbury Committee published the first code on corporate governance in 1993. Companies listed on the United Kingdom’s stock exchanges were obliged to disclose their compliance with that code from then on in on a ‘comply or explain’ basis (Kahn & Santoso, 2018, p. 32). The Dutch Corporate Governance Code1 is also based on this principle. It is a form of regulation imported from British  English version of the Dutch Code: Monitoring Committee of the Dutch Corporate Governance Code, The Dutch Corporate Governance Code, 8 December 2016. 1

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law and has had a legal basis in the Netherlands since 2004.2 In Indonesia, this principle has also been adopted, i.e., by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan, OJK), and integrated into the Indonesia Corporate Governance Code.3 Since 2015, all Indonesian public companies must ‘comply or explain’ under this Code.4 The incorporation of a foreign legal figure into a jurisdiction—in this case a British figure into the Dutch and Indonesian jurisdictions— inevitably triggers interpretation dynamics that require mutual adaptation of the legal figure and the internal context of the jurisdictions concerned. The transfer of legal rules from one legal system into another is like a ‘legal transplantation’—a metaphor that makes the social context of a legal system inherent to its interpretation (Teubner, 1998). Legal transplantation also played a role in the development and interpretation of open norms in corporate law in the Netherlands and Indonesia,5 as Indonesian corporate law is based on the Dutch Civil Law Code and the Dutch Code of Merchant Law (respectively: Burgerlijk Wetboek and Wetboek van Koophandel). These Dutch laws were codified in 1838 (hereafter: 1838 Civil Law Code) and were based on the Napoleonic Code. They were introduced during the French conquest of the Netherlands and are essentially French origin transplants.6 The 1838 Civil Law Code was subsequently introduced by the Dutch into its former colonies, and large parts thereof remained in effect at and after the Declaration of Independence of Indonesia in 1945 (Yahya Harahap, 2009, p. 21). I will provide a perspective on the cultural legal background which is so important in the process of explaining open norms. This process involves the concretization of abstract law; also referred to as ‘finding law’ in the Netherlands and Indonesia (Dutch: ‘rechtsvinding’; Indonesian: ‘penemuan hukum’). There are two ways of approaching this subject. One is to analyze the concretization of rules; the other is  Art. 2:391(5) of the Dutch Civil Law Code (DCLC).  English version of the Indonesian Code: National Committee on Governance, Indonesia’s Code on Good Corporate Governance, 2006. 4  OJK Regulation № 21/POJK.04/2015 and Circular Letter of OJK № 32/SEOJK.04/2015 on Implementation of Corporate Governance Guidelines for Public Companies (‘OJK CG Guidelines’). 5  See for an analysis that focusses on the development of corporate law in six ‘transplant’ countries—countries that imported their corporate law from another country or other countries rather than developing it domestically, in casu Chile, Colombia, Spain (French law family), Israel, Malaysia (British law family), and Japan (German law in the late nineteenth century and U.S.A.style corporate law after World War II)—from the date they first imported the law: (West et al., 2003). 6  For instance, the Dutch public limited company was, and still is, called ‘naamloze vennootschap’, meaning ‘anonymous company’, derived from the French ‘société anonyme’. The opening article on this company form read: “The public limited company shall not have a common name, nor shall it carry the name of one or several of its partners but shall only be indicated by the object of its business enterprise”. Because of this provision, this article tried to distinguish the public limited company from the commercial company and the limited partnership: the public limited company does not carry a fantasy name or have the names of its partners as part of its name (cf. De Groot, 2016, p. 192). 2 3

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to examine the concretization of open norms. Several scholars, among which the Dutch scholar Paul Scholten and the American scholar Ronald Dworkin are leading, discussed the difference between the two approaches (Scholten, 1931, pp. 60–66; Dworkin, 1978, pp. 24–38). The theory of Scholten and Dworkin is that every legal decision which is based solely on the abstract formulation of the law is unquestionably unjust. In their opinion, justice can only be reached if both the demands of general law and the demands of the singular situation are acknowledged and implemented in the concrete situation (Tillich, 1954, p. 152). The interpretation of open norms requires more interpretative thought on the part of a judge than the interpretation of rules. Consequently, the process of interpreting principles—or ‘open’ norms and ‘vague’ standards—points us to the complexity of a society in which abstract general law becomes concrete in a singular situation. Other than society’s legal complexity, what can a judge rely on in grounding his decisions; when facing a new concrete and singular situation (Hofstadter & Sander, 2013, p. 23)? A legal comparison of the Dutch and Indonesian norm of ‘reasonableness and fairness’ (also known as ‘good faith’) is interesting because it necessitates clarification of the cultural legal background against which corporate law is interpreted in both countries. That is: in the Netherlands against the background of a legally centralist state and in Indonesia against the background of a legally pluralist state. This will be explained in Sect. 3.3. In Sects. 3.4 and 3.5 I will elaborate upon the similarities between Dutch and Indonesian jurisprudence concerning the norm of reasonableness and fairness and will consider the legal origins thereof, i.e., contractual limitations and the behavioral normative dimension. In Sect. 3.6 I will discuss prevailing legal theoretical perspectives and their practical elaboration in the Netherlands and Indonesia. I will close with a comparative analysis and a conclusion in Sect. 3.7. In the following section I will delve deeper into the legal figure of reasonableness and fairness.

3.2 The Legal Origins of ‘Reasonableness and Fairness’ In Dutch and Indonesian corporate law open norms manifest themselves in various ways. In this contribution, I focus on the interpretation of the open norm articulated in Article 2:8 Dutch Civil Law Code (DCLC; i.e., Book 2 of the (new) Dutch Civil Law Code, which contains the Dutch company act and was introduced in 1992).7 Article 2:8 prescribes to act in accordance with standards of reasonableness and fairness in Dutch corporate law (cf. De Jongh, 2020). It resembles Article 4 Law № 40 of 2007 (i.e., the Indonesian Company Act 2007, hereafter ICA) concerning the limited liability company. This Article 4 states that company boards are obliged to comply with good faith principles, reasonableness and fairness and good corporate  Art. 2:8 DCLC; Art. 1339 Indonesian Civil Law Code (ICLC). Please note there is no official translation of the Burgerlijk Wetboek. The Indonesian term for reasonableness and fairness, ‘kepatutan dan keadilan’, when used in this contribution refers to the Dutch ‘billijkheid’. 7

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governance in running the affairs of the company. Under Indonesian law, reasonableness and fairness must also be taken into account in the implementation of Corporate Social Responsibility, i.e., pursuant to Article 74 ICA. The open norm of ‘reasonableness and fairness’ (Dutch text, Book 2 DCLC) or ‘good faith’ (Indonesian text, ICA), occupies an important place in both Dutch and Indonesian corporate law.8 In both legal systems this norm derived from the 1838 Civil Law Code, in which it was referred to as ‘good faith’. This is why Indonesian law currently still uses the term good faith, whereas in the Netherlands the term was changed to reasonableness and fairness upon introduction of Book 2 DCLC. A consequence of the ‘reasonableness and fairness’ norm in Dutch corporate law is, for example, that a shareholder may not let his9voting behavior at a shareholders’ meeting be guided solely by his own interests, but must also always take the interests of the company and other stakeholders into account (Kroeze et  al., 2013, pp.  115–116). In addition, a clause in a Dutch company’s articles of association does not have to be applied if application thereof would be unacceptable under the circumstances of a specific case, taking into account the criteria of ‘reasonableness and fairness’ (derogating effect). And, under Indonesian corporate law the boards of directors and commissioners of a limited liability company cannot be held liable for a corporate decision adopted in good faith. The characteristics of reasonableness and fairness can be continuously questioned due to the open and dynamic character of this norm. To assist societal actors and judges herein legislators have provided some instructions. When interpreting this open norm, a judge must take into account: the generally recognized principles of law, the living legal convictions, and the social and personal interests involved in a specific case.10 However, such instructions are difficult to follow when legal beliefs are not widely shared, principles are not widely recognized, and interests are conflicting, as is the case in Indonesia, which comprises more than 16,000 islands spread out over thousands of kilometers of Indian Ocean. Consequently, principles of law, living legal convictions and social norms vary in different parts of Indonesia.

3.3 The Historical Evolution of Dutch and Indonesian Law The most impactful export of Dutch civil law in the past two centuries is without doubt the export of the 1838 Civil Law Code to the former Dutch colonies, including the former Dutch East Indies (now: Indonesia).11 This export entailed the  Under the old Dutch Civil Law Code of 1838, the concept of ‘reasonableness and fairness’ was also referred to in the Netherlands as ‘good faith’. 9  Wherever the masculine ‘he’, ‘him’, or ‘his’ is used in this contribution, one can also read ‘she’, ‘her’, or ‘her’, and ‘they’, ‘them’, or ‘theirs’. 10  Art. 3:12 DCLC; Art. 1339 ICLC. 11  The export of the Dutch Civil Law Code was not limited to the former colonies, as Timmermans proves (Timmermans, 1997). 8

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introduction of codifications that closely followed the Dutch legal example. The introduction of Dutch legislation into Indonesia is the result of the so-called ‘concordance principle’, an instruction standardly issued to the governments which were part of the Kingdom of the Netherlands.12 This principle entailed that the former colonies should strive to have their provisions of civil and commercial law, civil procedure, criminal law, criminal procedure, but also their provisions regarding weights and measures,13 be as similar as possible to corresponding legislation and provisions in the Netherlands (Ploeger, 1997, p. 57). It is generally assumed that Roman-Dutch law (cf. Lokin & Zwalve, 2014, p. 356) was first introduced to the former colonies by means of an instruction letter issued in March of 1621 by the highest executive college of the Dutch East India Company (Ploeger, 1997, p. 59; Zeijlemaker, 1938, p. 717).14 More than two hundred years later, the codification of the 1838 Civil Law Code took place entirely in accordance with the principle of concordance. The civil law codification was proclaimed in the former Dutch East Indies by Royal Decree of April 30, 1847 (Ploeger, 1997, p. 64). While, in 1991, the Netherlands waved its 1838 Civil Law Code goodbye to welcome a new Dutch Civil Law Code on January 1, 1992, Indonesia has, to this day, maintained the 1838 Civil Law Code as the basic framework for its civil law system (Jansen, 2019). Changes to the law have been implemented therein. In literature on the historical development of corporate law in Indonesia, it is often uncritically argued that this law has remained unchanged for over 150 years since the introduction of the company form by the Dutch Code of Merchant Law in 1848. This is, however, incorrect. Originally there were only 21 articles in the transplanted Dutch Code of Merchant Law of 1848. This Code, for instance, introduced the possibility of establishing a public limited company in the Indonesian jurisdiction. The pertinent legal rules survived until 1995, in which year a far more detailed system of corporate law was introduced to Indonesia: Law № 1 of 1995 concerning the Limited Liability Company. Subsequently, in 2007, the new Indonesian Company Act 2007 (ICA) was introduced, which in terms of content and style was, however, still largely based on its predecessors. As indicated in the Introduction, Indonesia has had a (non-mandatory) Corporate Governance Code since 1999, in addition to its corporate law legislation. Consequently, Indonesian corporate law has undergone change from time to time (Mahy, 2013, p.  378). This means that Dutch and Indonesian corporate law may have deviated over time. Nevertheless, it is interesting to compare the two systems, as they have a lot in common in terms of the grammatical, and thus hermeneutical, aspects of many important subjects. In this contribution, a number of such similarities are put into perspective by highlighting the cultural differences between the

 Art. 39 of the Charter for the Kingdom of the Netherlands (cf. Jonkers, 1942, pp. 7–9).  This concordance principle applied to the entire Kingdom of the Netherlands. So also to former colonies such as Suriname and the Netherlands Antilles. 14  Dutch East India Company, in old Dutch: Vereenigde Oostindische Compagnie (VOC). 12 13

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Netherlands and Indonesia within which the abstract text of the law is given concrete form. One of these cultural differences concerns the situation that the Netherlands is considered—by legal anthropologists—a legally centralist state, whereas Indonesia is characterized as a legally pluralist state. Legal centralism builds on the idea that legal codification recognizes the original spirit of a common national consciousness. The main function of the legislator is thus to follow the spirit of the nation.15 Legal pluralism is based on the idea that legal anthropological research into enforceable rules includes both state rules and social norms (cf. Lessig, 1998). Therefore, legal pluralism was in the 1970s and 1980s a critical intellectual movement against centralism. The term ‘legal pluralism’ first appeared in Franz von Benda-Beckmann’s study of legal pluralism in Malawi (1970) in order to anthropologically conceptualize a particular space. Benda-Beckmann used this term to describe the situation resulting from the imposition of British law in colonized areas of Africa, including an overarching centralist legal system aimed at regulating a range of already existing (local) social manners (Pirie, 2013, p. 39). Today, the concept of pluralism is increasingly appearing in scholarship concerning corporate law. On the one hand, the concept arises, for example, in the transnational context of corporate law (cf. Eijsbouts, 2014; Zumbansen, 2009; Kay, 2006). Pre-existing sociological insights into pluralistic legal orders and contemporary concerns about the fragmentation of the law outside of the nation state lie at the basis of this context. The employment of the concept of legal pluralism has revealed dilemmas within the nation state regarding the supposed unity of the legal order, legal formalism, and the hierarchy of norms (Zumbansen, 2010). On the other hand, scholars use legal pluralism within the discourse of Corporate Social Responsibility (CSR) (Lambooy, 2010, pp.  227–276) both in favor of and as a critique of CSR.16 For example, the question is discussed how Indigenous peoples’ rights can be incorporated into modern-day water regulations (Macpherson, 2019; McIvor & Gunn, 2019; Willems et al., 2020). At the same time, the concept of legal pluralism is used to criticize CSR as a form of neocolonialism (Poesche, 2020; Fontoura et  al., 2017; Rhodes & Fleming, 2020). Within this discourse it is argued that CSR cannot be considered a solution, but rather that it manifests itself as a continuation of a problem, therefore constituting a problem in and of itself.

 In German ‘Volksbewusstsein’ (cf. Von Savigny, 1814, pp. 27–28).  See for instance the following Indonesian laws: Basic Agrarian Law № 5/1960 (BAL); Basic Forestry Law № 5/1967 (BFL); Mining Law № 11/1967; Basic Forestry Law № 41/1999 (BFL 1999); Decree № IX/MPR-RI/2001 on Agrarian and Natural Resource Management Reform; Law № 7 Year 2004 on Water Resources; Law № 18 Year 2004; Law № 27/2007 on Coastal Areas and Small Islands. Various literature on CSR and legal pluralism, for instance: Turner, 2016; Zerilli, 2010; Burnham, 2000. 15 16

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3.4 The Meaning of Reasonableness and Fairness: The Netherlands 3.4.1 The Law: Companies and Contracts In both the Netherlands and Indonesia, the origins of reasonableness and fairness (and good faith) can be found in jurisprudence on contracts given that a company was once considered a contractual arrangement between several stakeholders (De Jongh, 2014). Indeed, a partnership still is a contractual arrangement between the parties thereto, e.g., a maatschap (professional partnership), a vennootschap onder firma (entrepreneurial partnership), and a commanditaire vennootschap (partnership with partners with limited liability).17 These types of enterprises are provided for in the Netherlands in Book 7A DCLC, Bijzondere Overeenkomsten (Special Agreements) and in Indonesia in the ICLC and in the Commercial Code. Consequently, it is necessary to examine the jurisprudence on contracts to understand the origins of the open norm of reasonableness and fairness. Under Dutch and Indonesian civil law, as in many other jurisdictions, a contract concerns an obligation to perform by one party towards another party. This could be an obligation to do or not do something. The ‘receiving’ party is entitled to that performance. The contractual agreement is established by an offer and an act of acceptance. Offer and acceptance lead to a concurrence of wills,18 which wills are manifested by a declaration.19 Problems may arise while concluding an agreement. There may be problems with the offer (was it an offer?), the will and the declaration may not coincide (erroneously generated trust), there may be a lack of will (error, deception, threat, or abuse of circumstances), and there may be problems concerning

 Mahy, 2013, p. 385n: “In addition to the limited liability company a number of other business forms were made available (at the time only to Europeans) through the Dutch Codes. Book III of the Civil Code provides for the maatschap (perserikatan perdata) which is a contractual partnership usually used for a single business endeavour where the partners act under their own names. The Commercial Code (Chapter III, arts. 16–18) also established the firma, an unlimited partnership where each partner has full liability and business is conducted under a trade name. Finally, the Commercial Code (art. 19) also established the Commanditaire Vennootschaap (CV), a variety of firma which is a limited partnership of ordinary and silent partners, where only the ordinary partners bear personal liability. The CV in particular continues to be very popular for small and medium sized businesses in Indonesia (at least for those that choose to have a form of legal entity status rather than operating informally) due to it being quite easy to establish.” 18  Art. 6:217(1) DCLC; Art. 1233 ICLC. 19  Art. 3:33(1) DCLC. Art. 1320 ICLC only specifies the doctrine of consensus in the ICLC, however, there is no provision that requires the statement of the ‘will’ as in the DCLC. Instead, four theories are based on this doctrine: (1) the theory of the will (wilstheorie), (2) the sending theory (verzendtheorie), (3) the hearing theory (vernemingstheorie), and (4) the theory of good faith (vertrouwenstheorie). However, certain contracts do require mutual consent to be expressed through written form, such as in the form of an authentic deed (Art. 1692 ICLC), the formation of a limited liability company (Art. 30 Limited Liability Company Law), and a private deed (Art. 1851 ICLC). Vid. Sunaryati Haryono, 2001, pp. 14–16. 17

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non-compliance with the four corners of the agreement. To determine what those are, I must first ascertain the content of the agreement, because without content there is no need to limit it (Verheugt, 2018, pp. 279 et seq). The content of an agreement is, in abstracto, based on the freedom of contract. The principle of contractual freedom means that the parties are free to determine what they want to agree upon (content) and with whom they wish to conclude a contract (the parties), as long as both parties are legally competent, and the agreement (in terms of content) is not in conflict with the law or public order. The content of the agreement is specifically determined by the obligations which the parties have together agreed upon, the law, custom, and the requirements of reasonableness and fairness.

3.4.2 Functions of Reasonableness and Fairness Under Dutch law, the open norm of reasonableness and fairness can play a role in contract law, and, therefore, also in corporate law, in four ways. Firstly, this norm is considered a standard that can augment what has been agreed upon. An example of this is when a newly purchased car is delivered by the seller to the purchaser; the latter may reasonably expect the seller to have left some gas in the tank. Secondly, this standard can have a derogating effect. The derogating effect of reasonableness and fairness entails that (certain elements of) agreements agreed upon by the parties can be put aside and excluded. For instance, when a minority shareholder does not wish to participate in the amendment of a shareholders’ agreement, with as a result that the company may likely go bankrupt, a court may decide that such shareholder is acting contrary to the principles of reasonableness and fairness which are applicable to those who are affiliated with the company. Thirdly, it can have an interpretative function. The interpretative function entails that the norm of reasonableness and fairness plays a role in explaining what has been agreed upon. In the Netherlands, the question whether a contract (or contractual provision) should be interpreted primarily linguistically,20 or whether the intention of the parties is leading was debated for a long time. The landmark Haviltex case provided the answer: the interpretation depends on what meaning can be reasonably attributed to the provisions under the given circumstances and what the parties can reasonably expect of each other (the so-called Haviltex criterion,21 which is still applied by the courts) (Kemp, 2015, r. 6.2.2.2). A contractual ‘entire agreement clause’ does not automatically prevent the intention of commercial contractual

 Dutch Supreme Court 17 September 1993, NJ 1994, 173; Dutch Supreme Court 24 September 1993, NJ 1994, 174. 21  Dutch Supreme Court 13 March 1981, NJ 1981, 635 (Haviltex); vid. Dutch Court of Appeal Arnhem 2 March 2010, JOR 2010, 150 (Delta vs Essent). 20

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statements, or the conduct of the parties prior to the conclusion of the contract, from being relevant for its interpretation.22 Although the first three functions continue to play their own role within corporate law, it is primarily the fourth function of the open norm of reasonableness and fairness that has meaningful creative potential in a corporate law context. This fourth function is the norm-setting function, which aims to steer the behavior of the parties that are stakeholders within a company structure. Behavioral norms are legal norms that command, prohibit or permit behavior. In this behavior-norm-setting function, the norm prescribes that the ‘person concerned’ must act reasonably towards the other parties involved in the transaction or corporate setting. This implies that the person concerned is obliged to prevent his actions from unreasonably harming others involved (Kemp, 2015, r. 6.2.2.2). According to Bakker, the words reasonableness and fairness are not a tautology; they do not mean or assume the same thing but form a pair of distinct concepts, each with its own mutually complementary behaviorally normative dimensions (Bakker, 2012, p. 10). The respective terms are equivalent quantities linked by language: a so-called hendiadys.23 One can see a human connection between them. Reasonableness and fairness can be perceived as personified quantities that, like companions in a good marriage, cannot exist without each other (Snijders, 2012, p. 776).24 This is not to say that reasonableness and fairness never appear separately in Dutch law. Anyone who reads the Dutch Civil Law Code will note that the legislator has no difficulty in using the two terms separately. However, several prominent authors argue that when the legislator talks exclusively about ‘reasonableness’ or ‘fairness’, he is in fact still referring to the good marriage of ‘reasonableness and fairness’ (Snijders, 2012, p. 775).

 Dutch Supreme Court 5 April 2013, LJN BY8101 (Lundiform vs Mexx).  From ‘one through two’, ‘ἓν διὰ δυοῖν’. A hendiadys is the substitution of a conjunction for a subordination. 24  Former Dutch Advocate General to the Dutch Supreme Court (corporate law section), Levinus Timmerman, raised and defended the anecdotal thesis that corporate law has the same ontological foregrounding as Richard Wagner’s cycle Der Ring des Nibelungen (1874), namely ‘love’ and ‘power’. In Wagner’s cycle, Alberich’s Ring is cursed because, if you possess the Ring, you may have enormous power over people and nature, but at the same time you lose the ability to love people and nature. The structural, i.e., legal constructive, part of corporate law would be the side of ‘power’, the behavioral part, most strikingly the reasonableness and fairness, would be the side of ‘love’. The peculiarity of modern corporate law is that it presents itself with the difficult task of uniting both ‘love’ and ‘power’ (Timmerman, 2014, pp.  1026–1027). Theologian Paul Tillich wrote an extensive study on this theme: Love, Power, and Justice. Ontological Analyses and Ethical Applications (translated as Liebe—Macht—Gerechtigkeit, 1954, pp. 185, 188). ‘Law’ is the form (1) in which the ‘power’ of being actualizes itself, and (2) in which and through which ‘love’ does its work. ‘Love’ reunites and is the final principle of ‘law’, and so is ‘law’ the form for that unity. Timmerman’s speculation that the unity of reasonableness and fairness within corporate law contains the ontological structure of love within it may be anecdotal but there is something to be said for it. 22 23

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3.4.3 The Reasonableness and Fairness Norm in Contract Law With the legal obligation to act reasonably, parties to a contract are instructed to exercise fairness if certain contractual provisions do not work as envisioned, or if rigid adherence to the agreement would harm the interests of one of the parties (Bakker, 2012, p. 9). In that case, it is primarily up to the parties themselves to find a solution based on fairness. If they fail to find a solution, reasonableness and fairness can be used to solve the issue. It follows from the foregoing that reasonableness and fairness is not only reserved for the judge but can primarily be seen as a behavioral norm for individuals rooted in social life. This view is also based on the Baris vs Riezenkamp ruling,25 a well-­ known Dutch Supreme Court decision of 1957, stating that objective good faith is concerned with the question “what, given the nature of the agreement and the circumstances, do reasonableness and fairness dictate to the parties.”26 In the Baris vs Riezenkamp decision, the Supreme Court formulated the rule that reasonableness and fairness entail that the parties “must allow their conduct to be partly determined by the legitimate interests of the other party.”27 It is generally assumed that through this kind of open legal norm, ethical norms can become part of the law. The facts of Baris vs Riezenkamp were as follows. Baris sold his factory for manufacturing scooter engines to Riezenkamp for a total amount of 110,000 Dutch guilders (predecessor of the euro). Baris had indicated that the engines could be produced in the factory for 135 Dutch guilders each. However, after the purchase agreement was concluded, Riezenkamp discovered that it would actually cost 230 guilders to produce a single engine, effectively making them too expensive to sell. Baris demanded in court that Riezenkamp pay back the total amount of 110,000 Dutch guilders. Riezenkamp refused to pay. Baris then claimed dissolution of the purchase agreement and demanded financial compensation. Riezenkamp defended himself by invoking error28 and requested the annulment of the purchase agreement. Baris responded by arguing that the error was to be blamed on Riezenkamp himself, ​​because he had failed to conduct enough research into the cost price of producing an engine.29

 Dutch Supreme Court 15 November 1957, NJ 1958, 67 (Baris vs Riezenkamp).  Dutch Supreme Court 21 June 1957, NJ 1959, 91 (Thurkow vs Thurkow). In Dutch: “wat in verband met de aard der overeenkomst en de omstandigheden de redelijkheid en billijkheid aan partijen voorschrijven.” 27  Dutch Supreme Court 15 November 1957, NJ 1958, 67 (Baris vs Riezenkamp), n. 17, in Dutch: “hun gedrag mede moeten laten bepalen door de gerechtvaardigde belangen van de wederpartij.” Cf. Bakker, 2012, p. 11. 28  ‘Error’, or in Dutch ‘dwaling’ is a legal concept with the emphasis on the false precontractual statement of fact made by the other party, or his failure to disclose information (vid. Van Rossum, 1992). 29  Art. 6:228(2) DCLC; Art. 1321, Art. 1322 ICLC. The English words ‘invalid’ and ‘mistake’ refer in the ICLC translation to the Dutch words ‘nietig’ and ‘dwaling’ respectively. 25 26

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The legal question posed in this judgment was whether Riezenkamp could successfully invoke error with the remedy to annul, and/or whether Baris could successfully invoke breach of contract, dissolve the contract and claim financial compensation. Annulment makes it so that the contract never existed in the eyes of the law because it was invalid to begin with; dissolution has retroactive effect. In both cases, a legal claim to compensation may arise. The Supreme Court found that for a successful appeal to error it is not explicitly required by law that the error can be annulled. Reasonableness and fairness means that both parties must take each other’s interests into account, which in this case was explained as follows: in principle, Riezenkamp had an obligation to investigate; however, this obligation to investigate was lifted by the statement from Baris, which Riezenkamp should have been able to rely on. Whether or not the obligation to investigate can be lifted must always be assessed on the basis of the circumstances of each individual case. According to Nieuwenhuis, the Baris vs Riezenkamp judgment constitutes an inconceivable climax of altruistic rhetoric: by entering into negotiations, the parties come together “in a special legal relationship, governed by good faith, which also implies that they must let their behavior be determined by the legitimate interests of the other party.”30 Is there still room for rhetoric from the other side? In this case, Baris had pointed out “that it was Riezenkamp’s business to decide freely whether he wanted to become a purchaser or not”.31 But what then of his own interests? Was self-interest even a factor to be reckoned with? This court decision does not reference it explicitly, or non-explicitly for that matter. According to Nieuwenhuis, this can mean either of two things: 1. either, the primacy of self-interest as a guideline for negotiating parties still forms a natural, and, therefore, unspoken, principle; 2. or, a reference to self-interest would merely mean paying lip service to nineteenth-­ century liberal individualism (every man for himself). To illustrate the importance of this rule that parties must let their behavior be determined by the legitimate interests of the other party, reference can be made to the case law dealing with the pre-contractual phase. The norm of reasonableness and fairness as formulated in Baris vs Riezenkamp was also cited by the Supreme Court in its 1982 landmark case, Plas vs Valburg, concerning the unilateral termination of a negotiation process. The Court concluded that—depending on the specific

 Dutch Supreme Court 15 November 1957, NJ 1958, 67 (Baris vs Riezenkamp), n. 17, in Dutch: “in een bijzondere, door de goede trouw beheerste, rechtsverhouding, medebrengende dat zij hun gedrag mede moeten laten bepalen door de gerechtvaardigde belangen van de wederpartij” (cf. Nieuwenhuis, 2006, p. 93). 31  Dutch Supreme Court 15 November 1957, NJ 1958, 67 (Baris vs Riezenkamp), n. 17, in Dutch: “dat het zaak was van Riezenkamp om in alle vrijheid te beslissen of hij koper wilde worden of niet”. 30

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circumstances of the situation and the interests of the other party—a party is not free to abruptly terminate negotiations at any given moment (De Graaf, 1998, pp. 73–74).32 In the 1992 DCLC, the courts have gained in importance. According to Hijma and Snijders, the judge has been given more room for interpretation (Hijma & Snijders, 2010, p. 13). The fact of the matter is, that the development of civil law during the twentieth century is mainly characterized by the accentuation of altruistic themes, enveloped in vague norms of unwritten law (Nieuwenhuis, 2006, p. 94). The consistent application of the abovementioned judgement seems to involve a suggestion by the Supreme Court that reasonableness and fairness, at least in contractual relationships, must first and foremost be regarded as a norm of conduct (Bakker, 2012, p. 11). This is in keeping with Duncan Kennedy’s observation concerning the correlation between altruistic rhetoric and ‘equitable standards’ (Nieuwenhuis, 2006, p. 95). I will come back to that later.

3.4.4 The Reasonableness and Fairness Norm in Corporate Law According to Van Schilfgaarde, institutional corporate legal reasonableness and fairness,33 e.g., the reasonableness and fairness norm enacted in the corporate law Article 2:8 DCLC, does not differ essentially from reasonableness and fairness under contract law.34 An important difference can, however, be found in its scope. Contract law is after all about the relationship between ‘creditor and debtor’35 or the relationship between ‘parties’.36 In a typical contractual case, two people are in the contractual relationship. However, the relationships within a company are generally multifold: the number of people can indeed be limited to two, but more often than not there are many people involved.37 In his study of reasonableness and fairness in corporate law, Van Schilfgaarde asserts that this large number of people is related to the institutional character of the legal person as an independent sub-legal order. This institutional character also depends on the fact that regulated decision-making processes take place based on a certain division of powers. This division ensures that managing directors and supervisory directors enjoy a certain degree of autonomy within that sub-legal order.

 The landmark case is: Dutch Supreme Court 18 June 1982, NJ 1983, 723.  Art. 2:8 DCLC; Art. 1339 ICLC. 34  Book 6 DCLC (General part of contract law). 35  Art. 6:2 DCLC; Art. 1235 ICLC. 36  Art. 6:248 DCLC; Art. 1337 ICLC. 37  Art. 2:8(1) DCLC. 32 33

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Once again there is a difference with contract law relationships on this point (Van Schilfgaarde, 2016, pp. 115–116).38 As stated by Bakker, the open character of the reasonableness and fairness norm leads to the following three observations/conclusions: (1) this standard is to be constantly applied between the parties; (2) this standard affects all aspects of the legal relationship between the parties; and (3) societal perceptions or ideas concerning the type of legal relationship in which the parties are involved, need to be taken into account (Bakker, 2012, p. 10). The next question that arises concerns the implications of this social ideology. In other words, what does the use of reasonableness and fairness in corporate (and civil law) tell us about social ideas? A critical reading of corporate (and civil law) in the Netherlands and Indonesia offers a comparative answer.

3.5 The Meaning of Reasonableness and Fairness: Indonesia 3.5.1 The Law: A Pluralistic Perspective Indonesia may have adopted its Civil Law Code from the Dutch 1838 Civil Law Code, but cultural differences and contrasting values between the two countries have led to distinct differences in their respective jurisprudence over the past 180  years. The Indonesian recognition of Adat and Islamic law in parallel to its corporate (and civil) law leads to a pluralistic legal system. The vast majority of Western legal theory in the twentieth century focused on the state law of national legal systems and on public international law governing relations between states. The main exception to this approach, was propagated by legal anthropologists who emphasized the importance of a legally pluralistic view of the law, with Cornelis van Vollenhoven (1874–1933) as one of the earliest and most distinguished examples. This Dutch legal scholar and social scientist opposed the Dutch colonizer’s centralizing tendencies and its subtle, interpretative transformation of the Adat law existing and employed in the former Dutch East Indies (Kennedy, 2010, p. 841). These anthropologists expressed an interest in the so-called non-state law: Adat law and Islamic law, among others. To gain a holistic view of the Indonesian legal status quo, we need to include this non-state law in the analysis of the Indonesian legal norm of reasonableness and fairness (Twining, 2012, p. 362). The presence of legal pluralism is not uncommon among colonies and former colonies; customary and religious law often have a (limited) function in family and inheritance law. Pluralism is not only a division, but also a diffusion of law. This diffusion of law is a complex, insatiable process where, for example, the diffusion can take place between many types of legal system sat different geographical levels  The annex to Art. 4 of Indonesian Corporate Law № 40 of 2007 also stipulates that companies are obliged to comply with reasonableness and fairness in carrying out corporate duties. 38

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(e.g., locations, regions, and islands). The diffusion can be complex and indirect; it can take place through informal interaction without formal adoption or enactment. In addition, legal rules and concepts are not the only or even the most important objects of study, and governments are not the only, or even the main, agents of diffusion of law (Twining, 2004, pp. 34–35).

3.5.2 Historical Perspective: Decolonization Indonesia has experienced a fast-growing economy in recent decades and is currently one of the Newly Industrialized Countries (NICs), together with Brazil, China, India, Malaysia, Mexico, the Philippines, South Africa, Thailand, and Turkey (Zeren & Akkuş, 2018, p. 112). Strangely enough, this only really seems to have impacted public law in Indonesia and had less of an influence on the development and interpretation of corporate law, commercial law and forms of civil law in the broader sense. Characteristic of NICs is that the first phase of economic development consists of a specific type of industrialization policy. In the period between Indonesia’s independence from the Netherlands and 1980, the view that equates economic growth with ‘development’—i.e., the orthodox development theory— called for import-substituting industrialization (ISI) with associated infrastructure requirements (Kennedy, 2012, pp. 207–208). The Indonesian state had a very active, if not completely dominant, role in implementing this strategy—a typical strategy of rural exploitation, ostensibly because of industrial capital formation in the cities. The ISI strategy thus relied entirely on public law and government intervention and was also strongly supported by various United Nations bodies, including the World Bank (Kennedy, 2006, pp. 58–59).

3.5.3 Reasonableness and Fairness in the Law The Indonesian Civil Law Code (ICLC), Adat law and Islamic law each played a significant role in offering alternatives for resolving private law disputes.39 Reasonableness and fairness is among the main principles of the ICLC (Salim, 2010, c. 13; Sogar Simamora, 2005, p. 40). The ICLC prescribes that “an agreement is not only binding for what is explicitly stated, but also for what is, by nature, obliged through reasonableness, custom and the law”.40 Reasonableness is additionally implicated in the validity of a contract, as one of the requirements for

 For instance, Indonesia’s inheritance law offers a choice between the ICLC, Adat law or Islamic law, depending on the circumstances of the case, in: Tamakiran, 1992, pp. 8–12. 40  Art. 1339 ICLC. 39

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concluding a valid agreement is having lawful cause.41 In this context, lawful means that the agreement shall comply with the laws, the norms, and the general public order.42 Reasonableness and fairness is thus referred to in the context of general public order (Yahya Harahap, 2013, p. 56). The Indonesian legal scholar Subekti stressed in his study of Indonesian contract law (1984) that the content of the agreement should contain values of justice, including a ‘reasonableness’ that is developed in society (Subekti, 1984, p. 5; cf. Cindawati, 2014, pp. 181–193), The norm of reasonableness and fairness is also used to determine whether an act must be considered unlawful (tort, onrechtmatige daad); also part of civil law. According to the legal scholar Satrio, to act unreasonably and unfairly means to ignore and violate the other person’s interests. If doing so while pursuing personal interests, such behavior could constitute an unlawful act (Satrio, 2001, p. 177).

3.5.4 Jurisprudence Concerning ‘Unlawful Acts’ In Indonesian law, reasonableness and fairness indeed stems from the concept of an unlawful act, thereby following the Dutch Supreme Court ruling of 31 January 1919: Lindenbaum vs Cohen.43 In this case, Cohen incited a servant at the commercial printing house of his competitor, Lindenbaum, with gifts and promises in exchange for information about “everything that was going on at Lindenbaum’s office”. This was a gross form of unfair competition, which we nowadays call industrial espionage, that at the time was not legally defined as an offence. Lindenbaum, however, alleged that Cohen’s actions were unlawful and claimed damages from Cohen. Cohen argued that his actions were not prohibited by civil law. Indeed, the Court of Appeal dismissed Lindenbaum’s claim because it was unable to find a legal rule prohibiting Cohen from acting in such a manner. The mere fact that Cohen’s actions were careless did not make them unlawful. The Supreme Court ruled, however, that Cohen’s actions were unlawful on the grounds that they were contrary to “the due care that should be exercised with regard to another’s person or property” (Franke, 1996, pp. 17–18). Under Dutch-Indonesian law, this decision is seen as the most important decision ever taken by the Supreme Court (Verheugt, 2018, p. 330). Pursuant to Lindenbaum vs Cohen, there are four criteria for finding an act unlawful: violating the legal obligation of a party; violating subjective rights of others; violating certain rules of decency; and violating reasonableness, prudence, and a duty of care in interacting with others, or when dealing with the possessions of other people (Agustina, 2003, p.  50). Open norms are included in the third and fourth criteria, as they refer to

 Art. 1320 ICLC.  Art. 1337 ICLC. 43  Dutch Supreme Court 31 January 1919, NJ 1919, 161 (Lindenbaum vs Cohen). 41 42

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unwritten norms. They provide the Courts with wide discretionary power to invoke new concepts regarding unlawful acts through the ‘finding of law’ (Agustina, 2003, p. 19).

3.5.5 Jurisprudence Concerning Contract Law A landmark decision was reached by the Indonesian Supreme Court in the case of Made Oka Masagung vs PT Bank Artha Graha et al. in 2001.44 The Supreme Court established that reasonableness and fairness play an indisputable role in the conclusion of an agreement. In this case, there was an unlawful signing of an agreement due to ‘abuse of circumstances’ (‘misbruik van recht’). The Indonesian legal figure ‘abuse of circumstances’ is a product of case law. It was developed by means of precedents, as it is not regulated in the ICLC. In the subject case, the Indonesian Supreme Court ruled that the signing of an agreement while in prison constitutes a hindrance of free will. This is due to an abuse of circumstances, given that the plaintiff was in prison when he signed a sales agreement with the respondent. In addition, within the freedom of contract, reasonableness and fairness could be invoked as a reason for amending the agreed terms. Indonesian contract laws and corporate laws are theoretically distinct from the Adat and Islamic legal systems. It is widely understood that the implementation of Adat and Islamic laws in Indonesia is strictly limited to the law of persons, as in the case of inheritance law (cf. Putri & Jansen, 2021). However, the 1978 Supreme Court judgement in the case of Usup Suwita vs RD Endjam Suprapti,45 in which such principles were invoked, concerned an unlawful act committed in relation to the termination of a rental agreement. This indicates that the Indonesian pluralistic legal system also influences the application of contract laws. The Supreme Court, in considering whether it was reasonable and fair to terminate the agreement, turned to Adat law principles instead of the ICLC. Adat law notably does not follow the ICLC requirements regarding contracts, rather it follows community customary law. Adat law is characterized as contant (cash), concret (concrete), and direct (Hilman Hadikusuma, 1992, p. 10). ‘Contant’ implies that a direct action will immediately complete an obligation of performance, while ‘concret’ refers to the presence of visible affirmation of what has been done or will be done in the near future, such as a symbolic act or statement (Pide, 2014, p. 25). According to Adat law, an agreement is already considered valid if it exhibits these three characteristics. Furthermore, Adat law does not differentiate between property rights and individual rights (Hilman Hadikusuma, 1992, p. 30). Based on the above characteristics, the Court in this case drew a distinction between the concept of reasonableness and fairness in Adat law and the ICLC.

44 45

 Indonesian Supreme Court Decision № 3641 K/PDT/2001.  Indonesian Supreme Court Decision № 1685 K/SIP/1978.

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Due to the Adat nature of the case—the object of dispute was located within an Adat region and the parties to the contract were members of the Adat community— the Court decided to assess the case under Adat law. The termination of the agreement was considered reasonable and fair under Adat law and thus the Court did not consider it unlawful. Additionally, this decision confirms the open and dynamic nature of reasonableness and fairness to the extent that Adat law, as the ‘living law’46 of Indonesia, can be applied in a civil law case relating to a contract.

3.5.6 Jurisprudence Concerning Corporate Law The norms applicable to companies are spread out over Indonesian corporate law. Partnerships are mainly regulated under the Code of Commerce, as the ICLC only oversees the form of sole proprietorship. And Law № 40 of 2007 provides the norms for limited liability companies. As regards open norms, the explanatory notes to Article 4 of this law mention an obligation for companies to abide by principles of reasonableness and fairness, in addition to the law. This affirms that the enactment of the law does not diminish the obligation of companies to comply with the principles of good faith, reasonableness and fairness and good corporate governance in running the company. An explicit reference to compliance with reasonableness and fairness exists in the obligation for companies to act in accordance with Corporate Social and Environmental Responsibility (i.e., CSR).47 The standard of reasonableness required in this context is elaborated upon in a Government Regulation concerning Social and Environmental Responsibility, which Regulation narrows the scope of reasonableness and fairness in this context down to: […] policies of companies adjusted with the financial capability of the company, and potential risks that result in social responsibility and the environment that must be borne by the company in accordance with its business activities that do not reduce the obligations as stipulated in the provisions of the legislation related to the company activities.48

Nevertheless, in corporate activities relating to contractual matters and unlawful acts, the ICLC is still the fundamental legal basis for the courts. Consequently, the concept of open norms as explained above remains applicable to all companies. In summary, the examples of cases in this section on Indonesian law illustrate that, although the presence of reasonableness and fairness in the Indonesian civil and corporate law system may seem limited in theory, the various concepts of open

 Adat law is called ‘living law’ in Indonesia, because it is the law that derives from customs and practices in Indonesian civil society, whereas the codified civil law is perceived as ‘external’ transplanted law, with inherently colonial connotations. 47  Art. 74(1) Law № 40 of 2007 on Limited Liability Companies. 48  Annex of Art. 5(1) Government Regulation № 47 of 2012 concerning Social and Environmental Responsibility. 46

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norms within the pluralistic Indonesian legal system leave room for broad application of these standards by the courts. This situation is further encouraged by the fact that the Indonesian legal system does not apply the rule of binding precedent. In Indonesia, precedents are continuously applied and developed by the courts.

3.5.7 New Legislative Developments The future of Indonesian civil law lies at the heart of the draft bill for a New Civil Code. There is not yet an official date for conclusion of the draft bill. However, the bill as it currently stands, offers a glimpse into the future development of contract law in Indonesia. According to the Academic Manuscript of the draft bill, reasonableness and fairness as basic principles of contract law, will remain the foundation of contract and corporate law in Indonesia. However, the urgency that is felt to accommodate the needs of contemporary Indonesian society will influence how these principles will be applied. With this objective in mind, the drafting team recognized the need for a dynamic application of the standards of reasonableness and fairness, i.e., it will leave ample room for discretion in order to enable the judges to take the relevant context and circumstances of each case into account. The Draft Bill aspires to apply open norms just as freely as the open norms in the DCLC. However, it also seeks to balance this freedom with principles of Adat law and with the nation’s ideology of Pancasila. Those norms will limit the judges’ discretionary freedom in the interpretation of open norms. Pancasila is the ideology of the nation and is incorporated in the Constitution of Indonesia. It is often viewed as stating the moral grounds of Indonesian society (Jesica et al., 2018, pp. 284–297). The values of Pancasila are very relevant to business activities, as most of them have been accommodated in the laws and regulations governing business activities in Indonesia (Sulistiowatu et al., 2016, pp. 107–122). Pancasila is also an amalgamation of values from all three pluralistic systems; the drafters may have been looking to create common ground.

3.6 Discussion: A Critical Legal Study of Open Norms In the study ‘Form and Substance in Private Law Adjudication’ (1976), two rhetorical styles are distinguished in the debate on the settlement of contractual disputes, namely ‘individualism’ and ‘altruism’ (Nieuwenhuis, 2006, p.  93). Duncan Kennedy, the author of this study, is primarily known as the grand star of the American Critical Legal Studies (CLS) movement. During the 1970s, this movement undermined the central ideas of modern legal thinking by coming up with a critical alternative. In short, modern legal thinking is divided into, on the one hand, the idea that law and morality are not, or not necessarily, related to each other

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(normative and descriptive legal positivism, respectively49) and, on the other hand, the idea that law and morality are inextricably linked (hermeneutical constructivism). According to the latter theory, in reaction to legal positivism, moral principles inevitably play a role in the practice of positive law, especially in the interpretation of legal rules and open norms. However, according to supporters of CLS, these so-­ called ethical principles mask only partial interests but with different weapons, and thus hermeneutical constructivism is only a continuation of the immorality of legal positivism (Maris & Jacobs, 2011, p. 15). Ethics seem to enter the law here and are properly recognized as an inevitable part of hermeneutical constructivism. But, the hermeneutical constructivist task of ethics is to legitimize the existing judicial practice. The law should embody the perfect story of a harmonious and balanced society. Ethics, as found by a judge according to the hermeneutical constructivists (‘finding law’), and moral philosophy became the gatekeepers of law (Goodrich et al., 2005, p. 19). CLS not only provided a new view on law, but also on how the law relates to society and politics (Unger, 1984, p. 1).50 In their critical alternative to mainstream thinking, Kennedy and other critics try to expose the claims of objectivity and justice of the law and reveal the suppression of marginalized groups that lies behind it (Unger, 1984, p. 1–4). This criticism of the legal ideology (Kennedy, 1997, pp. 1, 55, 69, 88; cf. Kohler, 1914, p. 36) is intended to open the road to emancipation of oppressed groups (Maris & Jacobs, 2011, p. 25). In the eyes of the ‘crits’, law is not an integer and coherent system based on principles and shared norms and values. Law is fundamentally indefinite, it is an amalgam of uncertainties, interests, and contradictions. According to CLS supporters, there is always and everywhere oppression in a Western type of society. Both public law and civil law are aimed at keeping the weak under control. According to Kennedy, every author who claims that this is not the case must be exposed (Huls, 2004, p. 104). But the oppression can never be total, precisely because of the contradictions in capitalism itself. One of the logical contradictions in capitalism is that economic production is based on social cooperation, but under capitalist production relations the private owners of the production means have the right and power to appropriate the social product for private profit (Veltmeyer & Delgado Wise, 2018, pp. 26–27). There are always cracks in the front of the oppressors and the power, which can be transformed into resistance areas for the opposition (Huls, 2004, p. 104). CLS, therefore, makes thankful use of the deconstruction of modern civil,

 A distinction can be made within legal positivist theory, cf. Casey, 2007, p. 34: ‘normative legal positivism’ means that whichever official is charged with authoritatively determining whether a particular norm is a law of a particular legal system, should do so without making any moral or evaluative judgments; ‘descriptive legal positivism’ means that law can be characterized based on social facts alone and does not contain any moral or evaluative content per se. 50  See also for the inevitability of ‘the human’ in every legal thought, idea, and decision: Schmitt, 1922/2015, p. 36. 49

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i.e., including corporate, law. Accordingly, the intriguing question arises: how neutral are the supporting principles of civil law (Huls, 2004, p. 104)?51 Kennedy highlights the contradiction that we both fear and need other people for our existence (Huls, 2004, p. 104). Kennedy leads us to the deeper thought structures that underlie civil law and that form and determine the impulses of decision-­ makers. These participate in a fundamental contradiction (Bratton, 1985, p. 884). The contradiction between Sartrian individualism—“l’enfer, c’est les Autres”, “hell is other people” (Sartre, 1943, p. 93)—and altruism is irreconcilable. Individuals and their communities are involved in an everlasting and insoluble conflict, and there are conflicting individualistic and altruistic normative views in everyone (Bratton, 1985, p. 884). Kennedy characterizes ‘the content of ideal individualism’ (Kennedy, 1976, pp. 1713–1716) in this way: The essence of individualism is the making of a sharp distinction between one’s interest and those of others, combined with the belief that a preference in conduct for one’s own interests is legitimate, but that one should be willing to respect the rules that make it possible to coexist with other similarly self-interested. The form of conduct associated with individualism is self-reliance. (p. 1713)

Kennedy characterizes ‘the content of ideal altruism’ (Kennedy, 1976, pp. 1717–1722) as follows: The essence of altruism is the belief that one ought not to indulge a sharp preference for one’s own interest over those of others. Altruism enjoins us to make sacrifices, to share, and to be merciful. It has roots in culture, in religion, ethics and art, that are as deep as those of individualism (Love thy neighbor as thyself). (p. 1717)

Kennedy disputes the conventional assumption that contractual ideology determines the results of contract cases. The law can influence the results in simple cases, but simple cases are, according to Kennedy, uncommon. Penetrating gaps, conflicts, and ambiguities in the elaborate corpus of law often give rise to difficult cases (Bratton, 1985, p.  883). As far as those cases are concerned, the law leaves the decision-makers a wide margin for maneuver. The law applicable to the difficult cases is limited to conflicting stereotypical policy arguments or the ‘rhetorical modes’ of individualism and altruism (Bratton, 1985, p. 884). The tension between the ideas of individualism and altruism can be represented as a continuum on which rules of contract and corporate law take place in relation to each other. From that point of view, the rule is a sum of different elements, each of which is more focused on individualism than on altruism (Mak, 2008, p. 775). Compared to other rules, the rule can be described as relatively more or less based on individualism or altruism. According to Kennedy, the distinction between individualism and altruism corresponds to a preference for, in the first case, closed rules (‘rigid rules rigidly applied’) and, in the second case, open norms, such as

 The ideological neutrality of private law (lex specialis) is not inseparable from law in general (lex generalis) and the ideological neutrality of law is not inseparable from science in general, cf. Derrida, 2001, p. 35. 51

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reasonableness and fairness (‘equitable standards’).52 Altruism offers other definitions of legal certainty, efficiency and freedom.53 For example, freedom is a negative freedom for individualists. The preference of individualists for legal certainty (the certainty-by-rules) is that people with a bad will identify the precise limits of tolerance for their badness. This empowers the villain to go as close as possible to the limits of that rule. That is impossible with an open norm; an open norm is simply too vague for that (Kennedy, 1976, pp. 1773).

3.7 Final Remarks This contribution provided an insight into the different interpretations of the open norm ‘reasonableness and fairness’ in Dutch and Indonesian corporate law. The comparison of this open norm in the corporate and civil laws of these countries is interesting for this nomomorphology, because: (1) the countries have a colonial and, therefore, transplant relationship; (2) both countries have major cultural, economic, political, and religious differences that influence the way in which an open norm is interpreted; (3) there is a centralistic legal system in the Netherlands and a pluralistic legal system in Indonesia; (4) both Dutch and Indonesian corporate law (as lex specialis) have undergone a development that is still partly connected with Dutch and Indonesian civil law (as lex generalis); and (5) the historical development of Dutch and Indonesian corporate law has followed separate and independent paths. Dutch and Indonesian laws hold similar standards of reasonableness and fairness; mainly as a norm of conduct that serves the best interests of the parties based on rules of decency (altruistic). This altruistic interpretation of open norms helps to settle disputes in a legal pluralistic state more than an individualistic interpretation of open norms would. To protect its cultural and religious diversity, Indonesian law could accommodate this social pluralism with strong internal legal pluralism. By using open norms in corporate and civil law, judges have the power to color these open norms with culturally determined values. This means that corporate and civil law practitioners must remain open to multiformity by allowing cultural backgrounds to play a role in the interpretation of open norms. The lower limit for a cultural interpretation of open norms lies in the tension zone with public order and  Compare the concepts of ‘rules’ and ‘standards’ (or ‘principles’) with the concepts of the ‘republican heteronomy’ and ‘despotic autonomy’ in: Wiarda, 1988, pp.  13–15; cf. Smith, 2007, pp. 21–49. 53  Behold again a glimpse of Timmerman’s corporate legal Ring cycle anecdote. ‘Individualism’ is viewed skeptically by critical legal scholars as being a structure of ‘power’, while ‘altruism’ is viewed positively by them as being a structure of ‘love’. The concept of ‘power’ in this context can be traced back to its use by philosopher Michel Foucault, 1976, pp. 112–113: “… Finally, because it is a power whose model would be essentially juridical, centered on the sole statement of law and the sole operation of taboos. All modes of domination, submission, and subjugation would ultimately come down to the effect of obedience.” 52

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safety (Oldenhuis et al., 2007, p. 72). In this way, the open norms not only provide a more altruistic law, but also offer the necessary legitimacy to the reform of Indonesian civil law. The main difference between the interpretation of reasonableness and fairness in Dutch and in Indonesian law lies in the application of open norms in a legal centralistic system (Dutch) as opposed to a legal pluralistic system (Indonesian), in which non-state laws extend the judge’s interpretation of open norms. This can be done by adopting the rule of binding precedent. On the one hand, Indonesia may learn from the Netherlands in the adoption of open norms amidst its pluralistic system by strengthening the position of court rulings as a source of civil law. On the other hand, the Netherlands may learn from Indonesia in the concretization of a more pluralist legal system. The Netherlands is becoming increasingly multicultural and multi-ethnic, and because of this diversity a divided nation is defending all kinds of interests. For example, ample legal research is being conducted into the different interests flourishing within the boundaries of the Dutch democratic constitutional state (cf. Abdi & Van Rossum, 2009).54 In the field of corporate law, Islamic law is also becoming increasingly interesting for Western countries due to the growing share of Islamic parties in the world market.55 Islamic financing is a pertinent example (Berger, 2006, pp. 75–77). However, the question as to the desirability of more legal pluralism in the Netherlands is also an ongoing debate in which emotions can run high.56 This is illustrated by the well-known Dutch proverb, which translates literally as: “A farmer doesn’t eat what he doesn’t know.”57 On this matter, I note that legal anthropology is also divided on the question whether legal pluralism is at all possible, and as a consequence, whether apparent legal pluralism may turn out to be a colonizing legal centralism, a transplantation, after all.58 Should the latter be the case, then this contribution should of course never have been called a post-colonial comparative study to begin with.

 A striking example are Moroccans living in the Netherlands who find themselves in a legal pluralistic situation given that they must deal with Dutch (as citizens), Moroccan (as citizens), and possibly Islamic law (as religious). This raises such questions as: How do they deal with this?— i.e., which law do they allow to prevail in which situation? 55  For a comprehensive introductory overview of (1) Islamic corporate law, and (2) Islamic commercial contract law, we recommend the following studies: (1) Roshash, 2005; (2) Hussain, 2012. 56  A major discussion in the last decade about the desirability of legal pluralism in the Netherlands resulted in the dissertation of jurist and political scientist Machteld Zee (Leiden University) (Zee, 2016). 57  In Dutch: “Wat de boer niet kent, dat vreet hij niet.” 58  Legal anthropologist Agnes Schreiner (University of Amsterdam) disapproves of this semblance of legal pluralism since non-state law is constantly being translated, even by force, into state legal concepts: Schreiner, 2004, pp. 87–94. Cf. Schreiner, 2019, p. 64: “It seems as if there is acknowledgement for local law at what appears to be the successful legal pluralist moments, but in actual fact each moment is evidence of the creativity and flexibility of the dominant law which forces the local law to transform and which enriches or elevates itself via court decisions and statute law to a new stage in its own development.” 54

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Chapter 4

Ethics as the Regulation of the Self About Compliance with Externally Imposed Rules

This is the collision […]; to put it briefly, it is the collision of pietism with the established order. The Pharisees and scribes are, namely, representatives of the established order, which precisely because of their quibbling and shrewdness has become an empty, indeed, an ungodly externality. (Kierkegaard, 1850, p. 86)

4.1 Introduction Self-regulation is considered a silver bullet by lawyers and ethicists alike. Where the field of business ethics over the years has engaged increasingly with the law, it is now riding its newest hobbyhorse: self-regulation. Society should place more trust in the business community and give it more room to define its own ethical norms. The result: an ethical business culture (Eijsbouts, 2010, pp. 92–93). In this way self-­ regulation becomes the panacea for the assumed immorality of business. In 2013, business ethicist Muel Kaptein was, consequently, full of praise for the Dutch Authority for Consumers & Markets (Autoriteit Consument & Markt) for engaging in dialogue with companies on self-regulation (Kaptein, 2013). And in 2018, Mark Nelemans defended his doctorate dissertation entitled ‘Financial Regulation: the Relationship between Internal Governance and External Supervision’ (Financiële regulering: de verhouding tussen interne governance en extern toezicht), in which faith in the self-regulating capacity of financial institutions is presented as a development befitting the renaissance of ethics (Nelemans, 2018). This sentiment is also expressed in the Dutch Banking Code (Code Banken) where each member of the management board is required to sign a so-called ‘moral and ethical conduct declaration’. The Confederation of Netherlands Industry and Employers (VNO-NCW) and SME Organization Netherlands (MKB-Nederland) are also sure of their cause (Boschma et al., 2016):

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_4

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4  Ethics as the Regulation of the Self Ethics is a form of self-regulation and, therewith, self-determination. A corporation or sector determines the norms that it considers important. As a result of good ethics there is no or little need to draft and enforce new rules and regulations in order to promote desired behavior. (p. 27)1

Two intriguing fiduciary relationships can be discerned in this statement. The first is the business ethicist’s trust in the object of his study, the business world. It is of course possible that the business world would use a moral free zone in an appropriate manner. However, it seems to me that the business world is a mask concealing a wide variety of people (Velasquez, 1983). And, it cannot be claimed generically that these people are worthy of trust. To my knowledge, there is no consensus among ethicists concerning the human moral condition. Indeed, mankind may very well gravitate towards all that is evil, in which case we will live to regret our trusting nature. Trust in a business world that opts for a future devoid of short-term opportunism, a greed driven culture, sexual discrimination and exorbitant bonusses would indeed form an extraordinarily interesting topic for an article (Bakan, 2004). One might ask oneself, for example, whether restoration of trust in the financial sector is at all expedient (De Jager, 2018). There is nothing wrong with a little healthy scepsis regarding powerful institutions, and not only those in the financial sector. Nevertheless, I am not going to talk about this relationship of trust. The second relationship of trust is that which the ethicist, lawyer or business administrator places in the moralizing effect of self-regulation. This trust is generally based upon the rationale that ethics commonly engender more profound behavioral change than the law. Legal norms frequently imply a minimum, a lowest acceptable limit. Ethical norms, on the other hand, can be stricter. That being said, something that is legally permissible may be ethically reprehensible. Consequently, the granting of a bonus can cause upheaval, but this does not render the bonus distribution in itself illegal. Here we see the difference between inequality and unlawfulness, legitimacy and legality. Moreover, the government does not regulate everything. That would be neither desirable nor possible. Nevertheless, it sometimes seems as if the government would like to do precisely that and believes that it has the ability to do so. A well-known sociological paradox is that, as the external guarantees for safety increase, the tolerance for residual insecurity decreases (Wildavsky, 1988). The ever-increasing safety in a country such as the Netherlands, for example, does therefore not lead to a steady decline in the residual tolerance for accidents and minor mishaps. Politicians, and in particular representatives of populist factions, believe that this decreased intolerance for insecurity can be solved by regulating more. Within the steadily shrinking unregulated zone, however, room for ethics arises. Business ethics is, to that end, a reflection upon ethical principles and moral issues that may arise in a corporate setting, in the business world. The point I am trying to make here, is that it is disputable whether business ethics, whereby one  In Dutch: “Ethiek is een vorm van zelfregulering en daarmee zelfsturing. Een bedrijf of sector stelt zelf de normen op die van belang worden geacht. Een goede ethiek geeft daardoor geen of minder aanleiding tot het opstellen en opleggen van nieuwe wetten en regels om het gewenste gedrag te bevorderen”. 1

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is supposed to think for oneself about good and evil and in which individual freedom is the norm, can be entrusted to the legal template of self-regulation—as is claimed.

4.2 The Term Self-Regulation As the welfare state developed in the 1960s, according to Dutch sociologist Jacques van Doorn, the authority of the ‘law’ was displaced by the power of ‘policy’—a label that can be affixed to everything (cf. Eijlander, 1993a). Over time, policy overload occurred. On the one hand, the number of cases pending became unmanageable. On the other hand, the problems that needed dealing with became too complex (Witteveen, 2014, p.  320). The solution to the problem seemed to be to pass the problem off to civil society organizations (CSOs) or companies (Van Doorn, 2009, pp. 191–193). At the end of the 1980s, consequently, the concept of self-regulation as a strategy was introduced into legislative policy memoranda as a means of fortifying the position of CSOs in relation to government (Bokhorst, 2014, p.  252). Neoliberalism was also an important ideological trend influencing these developments. Neoliberal states developed all manner of indirect techniques aimed at controlling people, without ever appearing to be responsible for their subsequent behavior. The technique of making people ‘accountable’ entailed a shift in responsibility for social risks (such as disease, unemployment, and poverty), and for life in society, to the domain for which the individual was solely responsible. Every problem was thus made into an individual problem. Ostensibly this ‘own responsibility’ had been taken away from the individual but returned by policy (Lemke, 2001, p. 201). A collective of individuals was now expected to regulate itself in the same way the individual had done so before it. This trend is in keeping with the broader concept of alternative styles of regulation. In legal and legal-theoretical literature this is commonly referred to as ‘popular justice’ or ‘alternative justice’ (Fitzpatrick, 1992, pp. 169–180). For decades, the key question posed in scholarly literature has been whether this form of justice can ever form a real alternative for the violence and coercion of the law of the state (Merry & Milner, 1995). Within the spectrum of regulatory styles used by a decentralizing government, self-regulation is the steering mechanism by means of which the field is made largely responsible for drafting, implementing, and enforcing self-­ binding rules (Overmars, 2016, p. 43). The private nature of the norms is what distinguishes this form of regulation from legal regulation (Geelhoed, 1993, p.  49). This private law regulatory field is given shape by professional groups, industries, branch organizations or market segments: the construction sector, insurance companies, the financial sector and the retail sector, to name but a few (Teunissen, 2007, p. 8). Various types of self-regulation can be distinguished. There is free self-­regulation, whereby the government leaves it entirely up to the field whether or not to self-­ regulate. The government assumes a neutral stance regarding the content of the

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rules, as long as these rules do not conflict with legal regulation. And then there is substitute self-regulation, whereby the government leaves it to the interested party to take the initiative. In the event that self-regulatory initiative is unsuccessful, the government can itself then always consider regulating. The public legislator retains a back-up function as it were. In the case of conditioned self-regulation, the government again leaves it to the market to take initiative. However, in this instance, the government does subject the end result to clear preconditions, which conditions may be made explicit in legal regulations (Geelhoed, 1993, p. 49). When referring to self-regulation, the legislator is generally referring to a concrete substitute for legal regulation. This concerns a more global form of regulation that conditions self-regulation and self-enforcement in terms of tasks and content. Needless to say, self-regulation takes place within a delineated (own) professional circle. But the legislator does set the preconditions for realizing the goals or duties of care prescribed by the legislator. Or, alternatively, the legislator solicits self-­ regulation, but lets it be known that detailed public law standards will be forthcoming if the own circle does not come up with the requisite rules. In the first scenario I refer to conditioned self-regulation, in the second substitute self-regulation. In both cases, self-regulation does not arise spontaneously but is the result of a direct or indirect mandate (Teunissen, 2007, p. 10; Westerman, 2016, p. 50). It should be noted that the various self-regulatory initiatives and the parties commissioning them are not necessarily ideal-typical. For example, the bonus provisions in the Banking Code must now be amended under political pressure, and also under political pressure from the Minister of Finance and the Dutch Authority for the Financial Markets (AFM), banks must now implement the Uniform Recovery Framework for Interest Rate Derivatives (UHR) without a legal basis (Knüppe et al., 2016). A somewhat more different example: nowhere in their Code of Conduct for Insurers 2018 did insurers stipulate that this code was commissioned by another party, as a result of which this code could possibly qualify as an instance of free self-regulation. However, when one reads that the code was introduced in response to the theme of ‘corporate social responsibility’, which was already prevalent at beginning of this century, one cannot then escape the impression that this code also concerned harmonization with the guidelines revised in 2000 of the Organization for Economic Co-operation and Development (OECD Guidelines, drawn up in 1976, revised in 2000 and 2011). These Guidelines explicate what governments may require of their business enterprises in terms of responsible business conduct. If a branch of industry does not self-implement these guidelines, the government will. Because this is, as noted, not necessarily an instance of free self-regulation, it should be referred to as commissioned self-regulation. A different, yet simultaneously similar, situation presents itself in the form of the Equator Principles (EP’s, 2003): a risk management framework adopted by financial institutions for determining, assessing, and managing environmental and social risk in projects, which is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making. The EPs are a case of self-regulation by the banking world on a global level (Lambooy, 2010, p. 37, 92n). Here, too, free self-regulation can be identified. However, this ‘freedom’

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is put back into perspective when taking into account that the EPs are based on policies and guidelines issued by the World Bank and the International Finance Corporation (IFC, the private sector investment arm of the World Bank Group); both of which are specialized UN organizations that ‘guided’ the bankers right up until the signing of the EPs. It is of course always a bit of a gamble trying to guess the real motives for initiating self-regulation, the fact remains, however, that even a free market is not spared a certain amount of coercion. According to Eijlander, the advantages of commissioned self-regulation include, among other things, more affinity with the business outlook of the parties involved, greater willingness to actually comply with self-made rules, fewer governmental implementation costs, a stronger co-relation between decision making and bearing the consequences thereof, and more citizen engagement due to the increased possibilities for self-determination. Disadvantages could be increased power of the strongest, a decrease in the quality of regulations, a more limited enforceability of group rules, unnecessary discrepancies between regulations, and an increase in implementation costs for citizens and civil society organizations (Eijlander, 1993b, p. 137).

4.3 Self-Regulation as Autonomy Westerman explains that the epithet self-regulation can create confusion with the term autonomy, namely setting the laws for oneself. In fact, self-regulation should not be able to be confused with autonomy, because it is literally nothing other than autonomy. Whereas autonomy refers to a spontaneous self-regulation, commissioned self-regulation entails the undermining of autonomy. Spontaneous self-­ regulation occurs among tribes of indigenous peoples and took place in medieval guilds: given the large degree of autonomy of both groups, decisions can (could) be taken regarding working methods and group behavior, without having to take direct or indirect external instructions into account (Westerman, 2016, p. 50; Moore, 1973, pp. 719–746). Another example of spontaneous self-regulation is the Dutch scandal known as the construction fraud. This was an instance of self-regulation that facilitated a blatant disregard for the law. This case of fraud, involving irregularities in the tendering of government projects during the period 1990–2000, was caused by ineffective competition law. Significantly, there was a conspiracy between the procurers and the supervisory authorities. But what really frustrated supervision, according to Van de Bunt, was the self-regulating field that had been created. The fraudsters became so ensnared in their own web of self-regulated rights, duties, double bookkeeping, and retaliatory actions, that being ‘in’ was ultimately easier than being ‘out’—a veritable omerta (Van de Bunt, 2008; Bakan, 2004, pp. 85–110)! In a situation such as this, rules only serve to justify actions and decisions vis-à-vis the other members of the group (Westerman, 2016, p. 52). Seen from this perspective, the Italian government has its work cut out for it with the Camorra and Corleonesi; ‘moral free zones’ where spontaneous self-regulation

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arises.2 Surely this is not what was intended with self-regulation. When considering the concept of self-regulation, we sometimes lose sight of the fact that its function is no different from that of regular government regulation. Rules are an instrument for organizing society with a view to removing uncertainties concerning other people’s actions, or for ensuring that everyone contributes to the collective cause (Donner, 1993, p. 163; Mansell et al., 1995, p. 11–27). The organizing of society is a governmental task, which is why commissioned self-regulation can best be described as an outsourcing of regulatory activity: the government as ‘designer’ of the private sector seems, with self-regulation, to be allowing the private sector to ‘design’ itself (Westerman, 2016, p. 50). According to Westerman, this outsourcing of regulatory activity in the form of self-regulation has its own specific modus operandi that lends itself to application of the principal-agent theory. In short, this structure occurs when a person or entity (the agent) can make decisions or take action on behalf of another person or entity (the principal). Two things are striking here. The first is that it is determined by the principal who is allowed to self-regulate and how this self-regulator, the agent, is composed. That sounds a bit too theoretical, so let’s take a closer look at the Dutch Corporate Governance Code 2003 (Code 2003), the well-known Code Tabaksblat. This in order to properly understand the structure of commissioned self-regulation. The Code 2003 entered into force on January 1, 2004, and commencing January 1, 2005, Dutch listed companies were required to report on compliance with the Code in their annual reports according to the comply or explain principle. In this case the principal, or initiating party, is the Ministry of Finance together with the Ministry of Economic Affairs. The agents are Euronext, the Netherlands Centre of Executive and Supervisory Directors (NCD), the Foundation for Corporate Governance Research for Pension Funds (SCGOP), the Association of Stockholders (VEB), the Association of Securities-Issuing Companies (VEUO) and the Confederation of Netherlands Industry and Employers (VNO-NCW), as listed in the preamble (Van Horn, 2004, p. 18). The committee corporate governance adopted this corporate governance code at the request of Euronext Amsterdam, the Netherlands Centre of Executive and Supervisory Directors, the Foundation for Corporate Governance Research for Pension Funds, the Association of Stockholders, the Association of Securities-Issuing Companies and VNO-NCW, and at the invitation of the Ministers of Finance and Economic Affairs. (Commissie Corporate Governance, 2003)

The second thing that is striking about the principal-agent theory, is the nature of the activity. Westerman’s thesis is that outsourcing of regulations has implications for the nature of the type of rules that are produced. In a duty of care provision, the principal establishes the framework and objectives within which self-regulation by the agent must take place. The principal leaves the agent free in how the duty of care is fulfilled (Westerman, 2016, p. 51–52). The assumption is that the agent will exercise the duty of care in the most efficient manner possible due to financial

 The term ‘moral free zones’ is borrowed from: Kaptein, 2013.

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incentives. Because a duty of care provision provides very little guidance, additional instructions are warranted. Some of these additional provisions are performance indicators: standards used to determine whether pre-defined goals and results have been achieved (Mackor, 2008, pp. 73–74). The rules established under this form of commissioned self-regulation are now not aimed at justifying actions and decisions vis-à-vis other members of the group (as was the case with spontaneous self-­ regulation), but towards the principal (Westerman, 2016, p. 52).

4.4 Performance Accountability to the Principal The Tabaksblat Committee was established with a view to restoring trust in the management of companies and in the supervision of that management, so that the general public could be assured of honest, equitable and verifiable dealings within Dutch listed companies. The rules and practices regarding corporate governance also needed to be brought in line with international developments (Van Horn, 2004, p. 19). To this end, the 2003 Code had of course to be complied with. For that reason, the Ministry of Finance established the Monitoring Committee Corporate Governance Code in 2004—also on behalf of the Minister of Justice and the State Secretary for Economic Affairs. This committee’s task is to promote the topicality and functionality of the Code and to monitor compliance. The committee has published various progress reports on compliance with the Code. The ‘performance measuring’ of listed companies’ compliance with the Code 2003—comply or explain by those companies—yielded the following results. According to the December 2005, 2006 and 2007 progress reports: compliance 92 per cent in 2005 (for the financial year 2004), increased to 95 per cent in 2007 (for the financial year 2006), and application in the same period increased from 87 per cent to 90 per cent (Verdam, 2010, p. 102). Compliance with the code is possible by applying its best practice provisions, but also by explicitly stating where, why and to what extent provisions are deviated from. The government has been using this type of performance measuring since the 1980s. This can in part be explained by the ever-increasing mechanization of production processes, computerization and the increased use of scientific methods in public services. But the introduction of performance measuring is, in particular, related to a new vision of government. The central premise of this New Public Management (NPM) is that the government has become too involved in the public and private cause, and as a result has become an inefficient, unwieldy, and bureaucratic apparatus that nips private initiative and innovation in the bud. In short, the government could use a touch of esprit d’entreprise. In their Reinventing Government (1992), the founders of NPM, Osborne and Gaebler, present ten theses, the fourth and fifth of which are interesting (Mackor, 2008, p. 78–80). They opt for a transformation from ‘rule-driven government’ to ‘mission-driven’ and ‘results-oriented government’. All bureaucratic affairs can thus be reduced to close contractual relationships. Although the principal-agent theory is a pure academic exercise, it fully

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endorses the NPM conclusions (Meier & Hill, 2007, p. 60). In other words, a government must be clear about what it wants to achieve. Not by immediately seeking recourse to regulations, but by articulating the goals and results that are to be realized (Osborne & Gaebler, 1992, pp. 108–137, 138–165). According to Osborne and Gaebler, this makes for a more efficient, effective, innovative, flexible and ethical government (Osborne & Gaebler, 1992, pp. 113–114).

4.5 Self-Regulation as Heteronomy Let it be clear that self-regulation has little to do with autonomy—self-regulation in the proper sense of setting the laws for oneself. The goals dictated by the principal are not necessarily those the agent would have chosen for himself. And, even if that were the case, it is still not the agent who sets the laws for himself (Westerman, 2016, p. 52–53). There is no proper withdrawal of government, and self-regulation appears to be nothing more than an instrument, a legal template, of government policy (Witteveen, 1994, p. 105). Because in this scenario self-regulation is de facto government regulation, according to Sap, various social initiatives will—contrary to the concept of NPM—be nipped in the bud by the constraints of public law. Sap views this with a certain amount of skepticism. After all, private law also fulfils a function in the organization of the public domain and it is upheld by the ethics of the community (Sap, 1995, p. 17). In addition, and a fortiori, positive law—both public law and private law—is not the only legitimate source for structuring the public domain (In ‘t Veld, 1993, pp. 56–57). The elementary distinction between public and private spheres blurs because the defined government objectives are being achieved by means other than those of public law. Both Sap and Donner criticize the fact that these mechanisms thus open the private sphere up to additional public sphere intervention. According to both, this is an undesirable trend because the involvement of companies and social organizations legitimizes the realization of public objectives and control separately from the government. In essence, the government can therefore intervene more in the private sphere than would have been the case with normal regulations alone; after all, the rules for complying with government objectives are drawn up by those with skin in the game (Donner, 1993, p. 164). Prior to the 2003 Code being replaced by the Corporate Governance Code of 2008, there was already considerable scholarly speculation as to how the Code was developing from guideline to standard. In 2007, Berendsen and Van Thiel reached the following conclusions by reference to three high-profile right of inquiry cases3:

 The decisions on HBG (2003), ABN AMRO (2007) and Versatel (2007): HR 21 Februari 2003, NJ 2003, 182 (HBG); HR 13 July 2007, JOR 2007/178 (ABN AMRO); HR 14 September 2007, JOR 2007/238 (Versatel). 3

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1. The Code can serve as a legal basis for certain responsibilities of corporate bodies and can even form grounds for deviating from the statutory division of powers between corporate bodies. 2. The insights from the Corporate Governance Code give substance to section 2:8 of the Dutch Civil Code (reasonableness and fairness within companies) and have become an accepted standard against which actions of a company can be evaluated (Berendsen & Van Thiel, 2007, p. 339). The debate regarding the status of the Code does not seem to have abated with the introduction of the revised Code in 2008. Memelink assesses the possibilities of viewing this Code as an ‘expression of prevailing legal beliefs in the Netherlands’ or as ‘customary law’. The preamble, in particular, sheds some light on the issue (Monitoring Commissie Corporate Governance Code, 2003): The principles can be regarded as reflecting widely held general views on good corporate governance. The principles have been supplemented in the form of best practice provisions. These provisions contain standards for the conduct of management board members, supervisory board members and shareholders. (p. 5)

Just like Berendsen and Van Thiel, Memelink notes that the Code does not only contain standards of conduct; it definitely also has legal value. She sees a customary law future for the Code (Memelink, 2010, p. 49). In that way, the Code would fall within the realm of formal sources of law. After all, custom is a legal source—one that refines the operation of legal provisions, even if the law does not reference it.

4.6 Juridification of the Corporate Governance Code The observations of Memelink, Berendsen and Van Thiel were not what was initially intended with the Code. The Tabaksblat Committee considered making the Code 2003 less of a paper tiger by requiring disputes between shareholders and the management board or supervisory board of a company to be settled through the courts. This course of action was ultimately decided against in order to avoid juridification of the Code. The Tabaksblat Committee, did, however, bring it to the attention of the shareholders that they could use their powers to call the management of the company to order (Van Horn 2004, p. 20): Should it be made easier for shareholders to initiate court proceedings in the event of a dispute between the company’s management board/supervisory board and the shareholders about the corporate governance structure and the degree of compliance with the code? The committee ultimately answered this question in the negative. The committee fears that a “lighter” procedure for resorting to the courts would promote excessive litigation on corporate governance issues. (Commissie Corporate Governance, 2003, p. 47)

Gradually, however, far-reaching juridification did occur. A clear example of this juridification is the entry into force of a provision in Section 5.6 of the Dutch Act on Financial Supervision (Wft) on January 1, 2007, effectively enshrining in law the provisions of the Code relating to institutional investors (it should be noted that the

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perspective of Section 5.6 differs somewhat from the Tabaksblat Code).4 Section 5:86 (1) Wft prescribes rules for the application of a code of conduct by an institutional investor having its registered office in the Netherlands and an invested capital which includes shares or depositary receipts for shares admitted to trading on a regulated market (Abma, 2007, pp. 40–44). These investors are required to report their compliance with the principles and best practice provisions of a code of conduct designated pursuant to Section 391 (5) of Book 2 of the Dutch Civil Code that is directed at institutional investors, or must give a reasoned explanatory statement in accordance with the comply or explain principle (Grundmann-van de Krol & Hijink, 2012, p. 287–288). The effect of this Section 5:86 Wft is that institutional investors must comply with the Code; this law thus effectuates legal enforceability (Stegeman, 2014, p. 1052). The legal enforceability became complete on September 7, 2017 with the publication in the Official Gazette of a governmental decree enshrining the entire Corporate Governance Code of 2016 in law as per 1 January 2018.5 The Combined Corporate Law Committee of the Netherlands Bar Association and the Royal Dutch Association of Civil-law Notaries (GCV) also noted that the Code had been subject to a process of juridification. From the GCV’s perspective, the Code is meant to engender dialogue between the management board, the supervisory board and the shareholders. The juridification of the Code causes it to cease being a basis for discussion or a reference point for good stewardship. Instead, the danger of more formalism looms: a box-ticking culture. Just as stated in Code 2003, the GCV is of the opinion that the Code should encourage the resolution of complex issues within the management board and not in the courts. It is possible that juridification could have a stifling effect on a sector or branch due to increased risk aversion among managers out of fear of liability (GCV, 2016, p. 2).

4.7 Ethics in Self-Regulation The expediency of juridification is a topic that lies beyond the scope of this article. Moreover, the results of performance measuring (‘And, does it work?’) do not provide tools for answering the question whether, and if so how, self-regulation invites thinking about right and wrong decisions in the boardroom. So, does self-regulation stimulate the development of a reflective potential regarding morality or invite conscious thought about right and wrong in a business environment? At first sight, the word self-regulation suggests that it is the same thing as autonomy, the setting of laws for oneself. In the true meaning of the word, however, we must conclude that this form of regulation is principally a legal template for commissioned self-regulation. That ‘per commission’ implies the existence of a

 Kamerstukken II 2006/07, 30 658, 5, p. 17.  Stb. 2017, 332.

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commissioning party, a principal, and a commissioned party, an agent. This principal-­agent relationship does not support the autonomy of the agent, to the contrary, it undermines it. The agent does not set the values to which he will aspire, they are set for him. Self-regulation is, therefore, not autonomy, but heteronomy, because it makes someone an agent. Ethics, on the other hand, requires such autonomy precisely in the form of an inner conviction. For ethics, people must, therefore, have the freedom to determine of their own volition the moral principles by which they act (Jeurissen, 2009a, b, p. 16). Moral principles imposed by self-regulation originate from an external source. An external source can never, or very rarely, be endorsed 100 percent by the inner motivation of an agent. Consequently, so-called moral free zones are non-existent in self-regulation. The law, on the other hand, is undeniably a heteronomous construct. A well-­ known theory for why people obey the law is, for example, that of John Austin. The law is the command of the sovereign that is enforced by threats of violence, state violence (Austin, 1995): Being liable to evil from you if I comply not with a wish which you signify, I am bound or obliged by your command, or I lie under a duty to obey it. (p. 22)

We can start discussing the complicated boundary between law and ethics as I did earlier in this nomomorphology, but we can also simply note what the Corporate Governance Code has lost in terms of ethical significance. The Corporate Governance Code is exemplary of self-regulation because it has achieved the optimum form of juridification: enshrinement in the law. That singular individual who wishes to think consciously about good and bad boardroom decisions will be sorely disappointed. Moral norms that can be deduced from specific values to which this individual aspires, have already been written down for him. The act of thinking has thus been subsumed by the Code; very efficient indeed (Bourdieu, 1986, p. 12). According to Abma, the decision to enshrine the Code in law cannot, in fact, be seen in isolation from the experiences with the non-binding recommendations of the Peters Committee (the informal predecessor of the Tabaksblat Committee), which recommendations were published in 1997. It took an evaluation of these recommendations by the Netherlands Corporate Governance Foundation (NCGF) in 2002 to reveal that their ultimate influence was generally limited or even non-existent. The NCGF reached the unfortunate conclusion that the corporate sector could not be entrusted with improving its own corporate governance (Abma, 2005, p. 7). Such an externally generated Code is, therefore, associated with dysfunctions, such as a shift in purpose: from meaningful dialogue on ‘the purpose of the corporation’, to pure ‘compliance’ measured using performance indicators (Porter & Kramer, 2011, p. 64). Compliance with externally imposed rules is undoubtedly a useful or even necessary exercise for many natural and legal persons, but it has nothing to do with ethics.

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Kaptein, S. P. (2013). Roep om bedrijfsethiek heeft geleid tot minder bedrijfsethiek [Call for business ethics has led to less business ethics]. MeJudice, 13 November 2013. Kierkegaard, S. A. (1850/1991). Practice in Christianity № II. In H. V. Hong & E. H. Hong (Eds.), Kierkegaard’s Writings, XX, Vol. 20 (pp. 85–93). Princeton University Press. Knüppe, B.  F. M., Kocken, T.  P., & Schimmelpenninck, R.  J. (Derivatencommissie) (2016, December 19). Uniform Herstelkader Rentederivaten MKB. Lambooy, T.  E. (2010). Corporate Social Responsibility: Legal and Semi-Legal Frameworks Supporting CSR: Developments 2000–2010 and Case Studies (Doctoral thesis). Leiden University. Instituut voor Ondernemingsrecht. Lemke, T. (2001). ‘The birth of bio-politics’: Michel Foucault’s lecture at the Collège de France on neo-Liberal governmentality. Economy and Society, 30(2), 190–207. Mackor, A.  R. (2008). Prestatienormen: Over prestatiemeting (in opdracht) van de overheid [Performance standards: On performance measurement (commissioned) by the government]. In P. C. Westerman & A. R. Mackor (Eds.), Vormen van (de?)regulering. Den Haag. Mansell, W., Meteyard, B., & Thomson, A. (1995). A critical introduction to law. Cavendish. Meier, K. J., & Hill, G. C. (2007). Bureaucracy in the twenty-first century. In E. Ferlie, L. E. Lynn Jr., & C.  Pollitt (Eds.), The Oxford handbook of public management (pp.  50–70). Oxford University Press. Memelink, P. (2010). De invloed van de corporate governance code op het vermogensrecht [The impact of the corporate governance code on property law]. Maandblad voor Vermogensrecht, 3. Merry, S. E., & Milner, N. (Eds.). (1995). The possibility of popular justice. A case study of community mediation in the United States. University of Michigan Press. Monitoring Commissie Corporate Governance Code. (2003). De Nederlandse corporate governance code. Beginselen van deugdelijk ondernemingsbestuur en best practice bepalingen [The Dutch Corporate Governance Code. Principles of Good Corporate Governance and best practice provisions]. Moore, S. F. (1973). Law and social change: The semi-autonomous social field as an appropriate subject of study. Law and Society Review, 7(4), 719–746. Nelemans, M. D. H. (2018). Financiële regulering: de verhouding tussen interne governance en extern toezicht [Financial regulation: The relationship between internal governance and external control] (Doctoral thesis). Open Universiteit Heerlen. Zutphen: Uitgeverij Paris. Osborne, D., & Gaebler, T. (1992). Reinventing government. Penguin. Overmars, A. G. D. (2016). Wettelijk geconditioneerde zelfregulering: het dilemma van het omarmen van zelfregulering door de wetgever. Casestudy: de Gedragscode internationale student in het Nederlandse hoger onderwijs [Legally conditioned self-regulation: The Dilemma of embracing self-regulation by the legislature. case study: the code of conduct for international students in Dutch higher education]. Regelmaat, 1. Porter, M. E., & Kramer, M. R. (2011). Creating shared value: How to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review, January/February, 3–17. Sap, J. W. (1995). De organisatie van een maatschappij van organisaties [The organization of a society of organizations]. In T. J. van der Ploeg, H. J. de Ru, & J. W. Sap (Eds.), In plaats van overheid. Zwolle. Stegeman, R. A. (Ed.) (2014). Wet op het financieel toezicht. Tekst & Toelichting—Wet [Financial supervision act. Text & explanation law]. Wolters Kluwer business. Teunissen, J. M. H. F. (2007). Alternatieve regelgeving en eigen verantwoordelijkheid [Alternative regulation and personal responsibility] (inaugural lecture, Open Universiteit Heerlen). Wolf Legal Publishers. Van de Bunt, H. (2008). Rekeningen vereffenen in de bouw [Settling accounts in the construction business]. Tijdschrift voor Criminologie, 50(2). Van Doorn, J. A. A. (2009). Nederlandse democratie [Dutch democracy]. Mets & Schilt. Van Horn, H. A. L. M. (2004). Corporate Governance volgens Tabaksblat [Corporate Governance according to Tabaksblat]. MCA Tijdschrift voor Organisaties in Control, 1.

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Velasquez, M.  G. (1983). Why corporations are not morally responsible for anything they do. Business & Professional Ethics Journal, 2(3), 1–18. Veld, R. J. (1993). Zelfregulering en overheidssturing [Self-regulation and government control]. In P. Eijlander, P. C. Gilhuis, & J. A. F. Peters (Eds.), Overheid en zelfregulering. Zwolle. Verdam, A. F. (2010). De zorgplicht van de bestuurder van een rechtspersoon [The duty of care of the director of a legal entity]. Onderneming en Financiering, 18(2). Westerman, P. (2016). Zelfregulering in opdracht ondermijnt de autonomie [Self-regulation on command undermines autonomy]. Recht der Werkelijkheid, 37(1). Wildavsky, A. (1988). Searching for safety. Social Philosophical and Policy Center/ Transaction Books. Witteveen, W. J. (1994). Communicatie bij zelfregulering [Communication in self-regulation]. In P. Eijlander, P. H. A. Frissen, P. C. Gilhuis, et al. (Eds.), Wetgeven en de maat van de tijd. Zwolle. Witteveen, W. J. (2014). De wet als kunstwerk [The law as a work of art]. Boom.

Chapter 5

Dispute Resolution as an Ethical Phantasm Alternative Justice Under the Spell of Law

This is what fools people: a man is always a teller of tales, he lives surrounded by his stories and the stories of others, he sees everything that happens to him through them; and he tries to live his own life as if he were telling a story. But you have to choose: live or tell. (Sartre, 1938, p. 63)

5.1 Introduction Alternative dispute resolution (ADR) is a collective noun for all kinds of alternative methods to formal dispute resolution. A method for resolving conflicts is considered an alternative to the decision-making system that is referred to as conventional, i.e., the legal system. Any process that leads conflicting parties to seek and accept a friendly solution to end a conflict will be considered as an alternative, since no court judgment has been delivered. There is no fixed definition for ADR. However, the noun ADR is generally used to describe structured methods for dispute resolutions, which are found with the help of a third party, without these resolutions having to be legally binding. ADR forums, processes or means may include: private discussion and accommodation; private negotiation and compromise; third party assisted settlement; settlement through professional mediation (voluntary or court-annexed); non-binding arbitration (voluntary or court-annexed); ex post arbitration (voluntary or court-annexed); ex ante arbitration (sometimes through a contract of adhesion). As a form of self-regulation, ADR gives a panoply of possibilities and methods to relieve the legal practice: from mediation, a structured negotiation, to legally binding arbitration. With ADR the threshold for finding justice is generally lower than in court (Cappelletti, 1993). Disputants are for instance encouraged by a neutral third party to communicate with each other, to consider all the interests of those involved in the dispute and to explore alternative solutions, compromises, agreements, or even new business arrangements. This forms an alternative to accepting a statutory provision that applies strict statutory rights. ADR is intended to reduce the limited © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_5

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flexibility and high costs of a formal dispute resolution, to achieve a more ethical, reasonable, fair or a more efficient and privacy-respecting outcome for the conflicting parties, and to bring about peace (cf. Ojelabi & Noone, 2017, pp. 17, 22, 23). Business ethics attempts to theorize the different forms of normative coordination of corporate acts that remain within the lifeworld and outside the formal sphere of the legal system. In this context, business ethics could offer a positive approach to ADR, as ADR would be seen as an effective, practical form of casuistry ethics. In this manner, concrete conflicts of interest and disagreements between economic actors could be resolved based on moral intentions and moral validity claims (procedural agreements reached in the sessions). This approach of ADR through business ethics is confirmed by many articles in business ethical journals (e.g., Bultena et al., 2018; Schormair & Gerlach, 2019; Spalding & Kim, 2015); some academics even go as far as stating that business ethics is no different than self-regulation (Bryant, 2009; Norman, 2011) (cf. ADR as a form of self-regulation: Peppet, 2004, p. 78). Douzinas and Warrington have vice versa argued that the existing antipathy towards alternative forms of dispute resolution is dictated by the fact that the law is to be excluded from ethical considerations: a ‘de-ethicalization of law’, a ‘banning of morality from legal operations’ (Goodrich et al., 2005, p. 17). Unlike in legal frameworks, it is precisely in alternatives to formal justice that ethics could be evoked (Douzinas & Warrington, 1994, p. 4). Hence, ‘ADR as an alternative justice’ means in this nomomorphology: ‘ADR as a form of dispute resolution outside formal law’. Of course, of the alternative justice collection previously considered, some seem inherently more judicialized than others. The Uniform Arbitration Act 1955 is, for instance, quite formal; arbiters must render non-arbitrary judgements, and arbitrariness is judged with reference to customary notions of fairness that inform the legal issues in question. At the same time, alternative justice practitioners are increasingly trying to transform the judicial system and the violence it fights from within by implementing processes and programs in collaboration with formal law and legal actors (Reinke, 2018). However, to analyze its relative relationship to ethics or to law, ‘alternative justice’ is in this paper used as an ‘ideal type’ (cf. Weber, 1972, p. 4), as follows from Fitzpatrick (2004): The great figure of opposition and rejection is the state. “Alternative” justice, including popular justice, is set in a dynamic of opposition to the formalized and centralized power of the state. Alternative justice exists in the denial or partial dissolution of state power, or it exists in the operative affirmation of the limits of such power. That is, where alternative justice works specifically in conjunction with state power, it does so on the basis that such power is limited and that alternative justice makes good this deficiency. Alternative justice does what the state cannot. (p. 454)

Accordingly, the claim that ADR is an option for ethical dispute resolution, has the hypostasis that ADR is a holistic trans-porter of the ‘human’ dispute, meaning ADR should be able to take into account the ‘uniqueness of man’. In contrast, in a formal dispute resolution, the unique and human dispute is juridified, trans-formed, into a ‘legal’ dispute. This is the main difference between an informal (ethical) dispute

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resolution, which transports a dispute, and a formal (legal) dispute resolution, which transforms a dispute. Approaching ethics and law as separate ideal types does not mean per se that law does not contain a moral referent. Discussing the relationship between ethics and law, Paine distinguishes for example the ‘separate realms view’ (Paine, 1994a) from the ‘interdependent view’ (Paine, 1994b). Regarding the interdependent view, other than extreme forms of positive formalism, most jurisprudential views (natural law, most obviously, but also many forms of instrumentalism and sociological jurisprudence) suggest that law contains such a moral referent; ethics serves either as a goal or as a source of law. Many, if not most, legal philosophers contend that law has an ethical dimension and find at least a prima facie ethical obligation to obey law. Rawls found a deontological, first-order ethical duty to support ‘reasonably’ just institutions generated in ‘reasonably’ just societies, including the administration of justice (Rawls, 1971). Socrates gave four ethical reasons to obey law, and then drank the hemlock (Plato, Crito). On the other hand, in the wake of the Enlightenment, ethics is often traded in a purely formalistic manner. In this ethics the individual comes first, as an atomic unit that must relate to other atomic units. All this results in a system of rules for mutual traffic, whereby the main objective is that individuals hinder each other as little as possible in their self-realization. We see formalistic ethics reflected in deontology or utilitarianism, for example. Considering all the above, the constructs ‘ethics’ and ‘law’ depend on the context in which they are used. Here they are used as opposed constructs.1 The construction problematized here is that ethics (informal) as well as alternative justice (informal) are opposites to law (formal). Similarly, those who engage in the discourse of the law are subject to formality, whereas those who engage in the discourse of alternative justice are subject to informality. An ideal-typical dichotomy is revealed, namely the formness of the law that advocates coercion, as opposed to the formlessness of alternative justice that advocates coercionlessness. This nomomorphology will investigate the ‘reality’ of the construction by focusing on the destruction of that constructed dichotomy, i.e., ‘deconstruction’. In two important aspects, namely justice and autonomy, law is contrary to ethics. ADR, insofar as it is a form of alternative justice, lacks exactly these ethical characteristics; thus the idea that ADR belongs to the discourse of business ethics is misleading. This article will argue that ADR is not in the realm of the ethical, but in the realm of the legal. This critical analysis of ADR will show a deeper dimension in the relationship between business ethics and law, namely the systematic colonization of ethical methods by law.

 Therefore, the emphasis of constructional thinking is not on ontology, but on epistemology; in other words significance is given to the process and the fall of things, not to their quidditas, their ‘whatness’. 1

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5.2 Trans-Formation and Trans-Portation of Disputes It is common knowledge that not all disputes are solved by judicial procedure. There is a ‘legal iceberg’ with large numbers of grievances at the bottom, fewer disputes in the middle, still fewer legal claims toward the top, and only a small number of lawsuits at the top (Mather & Yngvesson, 2015, p. 561). This means that there are different ways to come to a solution of a conflict without consulting the law or thereby going beyond law. Disputes can be settled in a violent or non-violent manner, in a one-sided or two-sided manner, but also in a formal or informal manner, as will be discussed here. A conflict can for example be submitted to a third party, in which instance the dispute resolution receives a more formal character. The parties then relinquish control of the dispute resolution and the outcome thereof (Jansen & Schreiner, 2023). A lawsuit however is the most formal, and long-lasting form of dispute resolution. With its legal basis and constitutional guarantees, such as neutrality and independence, a lawsuit is presented as the answer to the incompatibility of value. A meaningful quantity of the courts in all societies can be considered in terms of attempts to prevent the ‘triad’ from breaking down into two against one (Shapiro, 1981, p. 2). Such a triad occurs at a fixed place (a courtroom), according to a fixed procedure (adjective law) and the participants play clear and fixed roles (i.e., a judge, lawyer, defendant). If two parties have a dispute that they want to resolve in a formal way, i.e., by a judge, the dispute must go through a certain transformation: the dispute must be narrowed, it must be juridified. A trial turns a social conflict into a technical conflict and entrusts their resolution to experts and the technicians of rules and formalities (Douzinas & Warrington, 1994, p. 4, cf. Benjamin, 1977, pp. 191–192). This happens in different ways, whereby the most striking actors are linguistic framing and the roles played by lawyers, judges, courts, and other institutions (Mather & Yngvesson, 2015, pp. 562–565). Legal disputes assume that truth or justice can be found by a conflict of arguments (cf. Mill, 2003, p. 118), by means of a prescribed investigation process. Because the dispute is juridified, only the legally important components remain. It is possible, for instance, that facts considered as important by the concerned parties, do not play any legal role. In this way, a trial can be compared to a ritual, which has no meaning, purpose, or intention, but is pure act: a ritual has a syntax, but no semantics (Staal, 1990, passim; Legendre, 1997, p.  164 et  seq.). In a dispute, legal relations instead of moral relations matter. Insofar as there is morality in a juridified lifeworld, this morality has been translated into a legal code. Morality has undergone a semantic transformation that is specific to the legal form (Habermas, 1992, p. 250)—a form in which custom constitutes the foundation of authority (Derrida, 1994a, pp. 28–30). In this formal dispute resolution, ethics is thus defeated in favor of law and one can wonder whether a legal procedure is per se the correct answer to a dispute. Agonism and formalism are confronting and hostile, and the legal jargon and confusion-creating procedures mystify the process and alienate lay-people from their own dispute. The parties involved can experience this transformed dispute with

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its legal language as too distant or complicated; as the establishment of truth is always channelized and therefore limited by formalism. Luhmann has argued that parties involved in legal proceedings become so entangled in the role play that they are forced to give up and transform their personality into a ‘disputing party’ to accept the judicial decisions (Luhmann, 1978, p. 87). In addition, litigation leads to an appeal on lawyers who then appropriate management over disputes. Winning the case is of course the main concern of a lawyer, which makes sense from a principal agency explanation (Mureiko, 1988). Nevertheless, lawyers need to win even if they are not persuasive enough to do so, meaning victory is not always limited to persuasion (Kennedy, 1997, p. 44). It is stated by David Graeber that this legal bureaucracy even creates a ‘culture of complicity’: a fiction that rules and regulations apply to everyone equally, when, they are actually often deployed as a means for arbitrary power (Graeber, 2016, p. 27; cf. Sunstein, 1994, p. 23). The autonomy of the process parties is better preserved if they can participate more fully in the resolution of their own dispute. Research into the perception of the litigation party shows that the parties are more concerned about the fairness of the process than about winning the case (Brooker, 1999, pp. 3–5). In addition, according to Ellickson legislation is not only unnecessary for law, but law is completely unnecessary for the orderly course of dispute resolution—there is such a thing as ‘order without law’. After studying dispute resolution among farmers and ranchers in the Shasta County in California, he comprehended that large segments of social life are located and shaped beyond the reach of law and that most people find the costs of learning about the law and submitting to formal dispute resolution so high that it is easier to fall back on common-sense norms. All main functions of law, such as dispute resolution, get equipped by means of these informal norms (Ellickson, 1991, pp. 40–64). To circumvent legal disputes, and thus the formal approach, the commercial world in the seventies turned to alternative forms of dispute resolution (Roach Anleu, 2000, p. 124). The development of ADR was a response to a dissatisfaction with the hostile and formal nature of formal dispute resolution. Instead of being dependent on transforming lawyers who appropriate the management of a dispute, parties in an ADR procedure participate in the whole process. They transport their own procedures to a resolution and will therefore probably be more satisfied with the result of the settlement and have a better feeling about the process experience—in other words, they experience procedural justice (cf. Van den Bos, 2005, p. 276; Lind & Tyler, 1988; Thibaut & Walker, 1975; Wellington, 1999).

5.3 Alternative Justice as Law Opposing Myth Fitzpatrick reveals that mythology (cf. Barthes, 1957) does not only exist in ‘other’ societies, but also infuses Western society. It is possibly even stronger in those places where its presence is denied most clearly, where reason and seriousness are most conspicuous, namely: in science and in law (Cain & Smart in: Fitzpatrick, 1992, p. xii). The word ‘myth’ very often refers to something that, as it were, floats

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above you, over which you have no influence. It always seems to go its own unpredictable, sovereign, and therefore random way. By means of a deconstruction of the ‘mythology of modern law’ Fitzpatrick answers the question whether the terms ‘formal’ and ‘informal’ are truly two designate separate realms of legal activity. The starting theorem in this type of critical legal deconstruction thinking is that science and law have successively given us “power over inanimate nature, over plants and animals, and finally power over human beings” (Russell, 1954, p. 190). The entire knowledge apparatus is accordingly aimed at exercising power over things and living creations. In modernity, the Foucauldian prison discipline is no longer intramural, but became extramural, maintained by ‘control and punishment’ (Foucault, 1975). As a result of this control, man has been made predictable by the social straitjacket of convention; something that we nowadays call ‘morality’ (Nietzsche, 1924, p. 287). This convention makes rules just and justified, for the simple reason that these rules are followed: Derrida’s (1994a, b) ‘mystical foundation of authority’. Whoever questions that foundation of law denies its authority. For this reason, law does not keep its credit because it is just, but because it is just the law. The deconstruction entails that through alienation this legal tradition is brought back to its origin, its queerness. For the law this deconstruction shows that an act of violence will always be at the origin of law. That ‘first’ legal act (i.e., the constitutional foundation) cannot be legitimized by a higher power, because it is not there. The sovereign of that ‘first’ law is arbitrary because he is just the strongest (cf.: Schmitt, 1963; Benjamin, 1977, p. 190; Freud, 2016, pp. 5–6; Hobbes, 1997, p. 103 et seq.). The arbitrary law of the strongest paves the way for the legal system. This arbitrary aspect of the law also comes forth in another capacity: its structure can only take into account abstractions, such as a legal subject or a legal person, instead of actual human beings (cf. Unger, 1984, p. 58). The law is unable to consider the uniqueness of man, the ‘unique individual’ (Douzinas & Warrington, 1994, p. 21). This is neither strange nor new, precisely because laws are general, that is to say they contain some level of abstraction from the concrete instances in which they may apply. When laws apply they, moreover, apply generally which makes it possible to state which acts are commanded, prohibited, or permitted to categories of persons. Both the aforementioned abstraction and generalization necessarily take place before the complications of the application of a specific law to a specific person or actual instance arises. The generality of laws makes them impersonal, because they abstract altogether from unique individual considerations (Unger, 1984, p. 73). Accordingly, law is not justice, but fundamentally injustice. As a consequence of this unjust formalism, sociological jurisprudes and legal realists promoted an informalist attitude, a ‘distrust of abstraction’ (Kennedy, 1997, p. 106). The idea of law as generally applicable, certainty giving, and autonomous, is contrary to the intrinsic justice of private communities: “What is applicable in a small society is unjust in a state” (Hegel, 1961, pp. 86–87). It is these qualities of formal dispute resolution that are absent in informal dispute resolution (Fitzpatrick, 1992, pp. 146–147). The mutuality of myths that will be made explicit here is that of the enlightened, reason-based myth of law versus the primitivistic, but on spontaneity, naturalness, and humanity-based myth of alternative justice (cf. Roach

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Anleu, 2000, p. 125). Those who do not dwell on the myopic sensation of the tribal recognize that important similarities can be seen between the two myths. ADR is not a separate form of dispute settlement, but only an extension, a mask for formal dispute resolution. Woolford and Ratner even call it an ordinary reproduction, rather than a challenge of the hegemony of law (Woolford & Ratner, 2008, pp. 4, 33–34), whereby ‘justice’—not in formal but in substantive terms—loses its critical character and acts not as a critique but as a critical apology for the existing legal system (Goodrich et  al., 2005, p.  17). As a consequence of the state’s withdrawal from formal regulation in the seventies, ADR blossomed and options such as mediation were added to the arsenal of dispute resolution. This informal practice was attributed a distinctive autonomous place by some legal scholars, while the state refused to legally recognize ADR, strengthening its autonomous status. In the eighties, this led to alternatives as neo-liberal adaptations of private modes that albeit increased the control over the individual, were actually regulated or displaced by the state. This created the illusion of ​​regenerating communities that regulate themselves (the illusion of self-regulation), an idea that seems related to custom rather than law (Green & Donovan, 2010, p. 30; Lemke, 2001, p. 201). Alternative justice assumes an identity in which its negative position to law produces positive content. It opposes itself against the malicious state that formalizes, centralizes, and juridifies the lifeworld (Fitzpatrick, 1992, pp. 169–170). Even though alternative justice exists by the limits of state power, it must always look as if alternative justice is helping the disabled state and not the contrary. This myth of ADR results in the idea that parties resolve their disputes themselves, without transformation as it occurs in formal law (cf. Boileau, 2014). The emphasis in the process of ADR is on experience rather than on facts: not the legal relevant facts matter, but the feelings that lead the process to a resolution. The primacy of feelings disconnects quarrelling parties from the larger social context that is encapsulated in their conflict. Fitzpatrick however notes that two features arise in this practice of ADR that illustrate fundamental features of formal law in alternative justice (Fitzpatrick, 2004, pp. 454–457). These two features are on the one hand the formation of power in alternative justice and on the other hand the ‘homology’ of that formation with the formation of power in formal dispute resolution. In the philosophical sociology discussed, homology is a term for analyzing the power system of law and alternative justice. Unlike ‘analogy’, homology is the correspondence of two things caused by kinship. Therefore, while alternative justice fundamentally rejects formal law, in reality it incorporates its features. Although responsiveness is emphasized, the working method within alternative justice is one of manipulation and control. This trait of alternative justice, to contain and control situations, is reflected for example in the many manuals that are introduced into the world of mediation. Thanks to these manuals, mediators know all too well that parties to a conflict tend not to call in the help of a third party. Parties to a conflict often feel that they are professional enough to settle their conflict on their own and inviting a third party, a mediator, makes the primary parties usually feel less competent and insecure. Mediators learn all kinds of tools to break this deadlock and get control over it. Schein, for instance, advocates for a ‘humble inquiry’

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that focuses on asking the right questions instead of giving all kinds of advice (Schein, 2013; Romero Pender et al., 2019, p. 23). Parties should have the feeling that they are listened to and that their grievances count. A settlement is successful if the parties are brought to an agreement—something for which the parties are ultimately considered to be entirely responsible. This idea of practice ignores the actual compelling aspects that are invoked by mediators to promote agreement—a process that in this manner reproduces the existing legal ideology (Kennedy, 1997, pp. 1, 55, 69; cf. Kohler, 1914, p. 36). Legal ideology means, on the one hand, the set of values and ideas that legal institutions and their jurists embody; on the other hand, according to the so-called Critical Legal Studies scholars, marginalize legal ideologies also alternative perspectives on law and distort social knowledge (Kornhauser, 1984, pp. 376–379; Caudill, 1991, pp. 652–654). The prevailing assumption is that the disputing individuals are the source of ADR, that all other things in the process—the method and the role of the independent third—depend on the involvement of those individuals, and that any formalism is always secondary to popular informalism. However in this process, the individual should not be seen as a source of power for dispute resolution, but as an effect of the power exercised in the process of ADR (cf. Foucault, 1975, p. 96). In their voluntary and self-responsible position, the individuals feel like they cause the procedure in itself and thus accept the transformation effects—effects that actually originate in fixed, constricted, pre-­ formed processes, and power relations (Fitzpatrick, 2004, pp. 457–464). This creates an illusion of informalism while maintaining the power relations, manipulation, legal ideology, and legal structure of formalism (i.e., legal axiology). The problem-­ solving aspect of ADR, as part of a wider legal ideology, will be further discussed in the fifth section of this article.

5.4 Colonization of Alternative Justice The formal legal process is generally criticized by the business world because it is too expensive and time-consuming, it disrupts current financial relationships, it is too uncertain in its outcomes, and wastes talent and energy. Trade and professional organizations, especially in the insurance sector, critique the oversupply of lawyers, their eternal search for deep pockets, the tendency of left courts to act as social-­ welfare organizations, and litigation in the area of injury and product liability (Adler, 1993, p. 74). Companies have responded to this with an assortment of ADR formalities and an ADR pledge. The ADR pledge stipulates that, when facing business disputes, corporations must at least try to resolve them with ADR techniques before full-scale litigation. Well-known patterns ADR pledges from around the world cover the UK Government Pledge 2001, the Viadrina Declaration 2008 which records German and Polish judicial support for mediation in cross-border family and child kidnapping disputes, the CPR ADR pledge signed by more than 5500 American companies and law firms, the International Trademark Association (INTA) ADR Pledge, the Individual and Corporate Pledges of the Mediation First

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Community in Hong Kong, and the Euro-Mediterranean Charter on Appropriate Dispute Resolution 2007, signed by the Arab Union of Lawyers, the Egyptian Bar Association, the Council of the Bars and Law Societies of the European Union (CCBE) and the Union of Turkish Bars (Alexander, 2009, p. 84). On the one hand, all sorts of new ADR get a chance within formal dispute resolution. For instance in legal professional literature, court-annexed mediation and judges are called upon to focus less on a strictly legal approach and more on a problem-solving form of communication: the so-called ‘judicial dispute resolution’ (JDR). On the other hand, there is a certain juridification: instead of laymen, an increasing number of lawyers, government judges or other jurists are also involved in the dispute resolution process (Brooker, 1999, pp.  34–35). Encouraged by the state, ADR thus becomes a preliminary stage of formal dispute resolution. The juridical field is a field that accumulates and allocates capital that is accessible for distribution in the field, assures the continued existence of the field, and neutralizes any external attempts to take it over (cf. Bourdieu, 1993, pp. 37–45). The process of appropriative constitution, described by Bourdieu, tends to create demand by bringing non-legal mechanisms, such as self-formalizing alternative justice, within legal mechanisms, such as litigation. This process is accompanied by the exclusion of non-jurists, the laymen. Bourdieu describes a case in his essay ‘La force du droit’ (1986) where disputes about employment contracts based on fairness, according to simplified procedures, should be resolved by means of arbitration. The arbiters involved were individuals with experience in this type of disputes. This ADR was slowly usurped by the legal realm. Union officials and jurists extended the market for their own services and the enclave of juridical independence slowly integrated into the legal market. Increasingly often, members of employment arbitration boards were obliged to appeal within legal mechanisms to arrive at and to legitimate their verdicts. For the most part because plaintiffs and defendants had inclined to resort to the courts and to have recourse to the services of lawyers. The proliferation of appeals also obliged the employment arbitration boards to defer to decisions of the appeals courts. Accordingly, professional legal journals and lawyers, increasingly consulted by management or the unions, profited significantly. This example illustrates how every step of juridification creates new legal needs, which in turn requires more jurists, and thus creates new legal interests. In this manner jurists ensure formalism through their own intervention and society becomes more dependent on ‘officials’ (Schroeder, 2009, p. 141). The laymen are obliged to appeal to the same jurists, who will increasingly replace the laymen in their dispute. Furthermore, in the legal field one can judge a book by its cover: the greater the distance to the dispute and the more lay-ish the attitude and rhetoric, the lesser the membership to the legal field (cf. Nader, 1988). The desire to carefully maintain this distance ensures that semi-professional mediators take part in ADR in a more technical, authoritative, and neutral manner to show their position, their disposition, to the litigants (Bourdieu, 1986, p. 12). The increasing interference of lawyers and courts in the practice of ADR, contributes to its technicization and alienation. Lawyers are active in lobbying governments for the recognition of their right to appear as mediators in the jurisdictions

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where mediation gains ground, as such restricting the freedom of non-jurist mediators to practice their own level of success. Further strategic tactics undertaken by lawyers or jurists include defensive marketing, claiming ownership of ADR, capturing pilot projects, lobbying policy makers to formulate rules that favor lawyer-­ mediators, and conducting lawsuits against non-jurist mediators. The exploitation of alternative justice is especially abundant in continental Europe; common law countries such as the US, Australia, Canada, England, and Wales; and other civil law jurisdictions that have evolved rapidly after the birth of mediation into the legal regulation of its practice (Van Waarden, 2009). Examples abound: family mediation arrangements for courts in New Zealand call upon lawyer-mediators or judicial mediation; about 40 per cent of those accredited in the general panel of mediators in the Hong Kong International Arbitration Centre are lawyers; the panel of members of mediators who conduct a mediation process at the Chamber of Commerce and Industry of the Russian Federation consists of a majority of lawyers; in Italy, lawyers are favored for the required mediation training; and the Greek legislation not only stipulates that mediation should only be offered by qualified legal practitioners, but training, regulatory functions, and accreditation activities should also be vested in legal professional organizations (Clark, 2012, pp.  84, 87, 89). Hence, assuming that there are two homologous (i.e., different, but similar) power formations, namely law and alternative justice, the question remains whether one (alternative justice) is not already colonized by the other (law), resulting in juridification (cf. Haugh, 2017). The assumption that the decision-making power of ADR lies with the people, with the community instead of the law is outdated. The process of mediation for instance is being rationalized and comes under increasing pressure of private and public actors. The operational practice, the policy, and the legislation in support of ADR all contribute to the effective colonization of the (‘alternative’) lifeworld by the (‘legal’) systemworld (Langer, 1998, p.  181). According to Douzinas and Warrington, this colonization does not seem to embody or pursue any implicit rationale, underlying strategy direction or coherent value system. Conflicting policies even seem to motivate regulatory practices in a lot of areas; a development that goes hand in hand with a limited amount of privatization, deregulation, and self-­ regulation. (Douzinas & Warrington, 1994, pp. 1–2, 10). These developments can be seen as examples of a Habermasian ‘rationalization’ or institutionalizing transformation of a communicative process. As a result, this juridified alternative justice has assumed legal qualities such as legal certainty, predictability, verifiability, and finality. Additionally this colonization is also apparent in the legal field.2 The central concepts of Bourdieu’s theory—‘field’, ‘actor’, ‘habitus’, and ‘social capital’—can  The ‘legal field’ as a ‘legal empire’: cf. Ronald Dworkin’s Law’s Empire (1986). It will not surprise anyone that the concept of ‘empire’ in, for example, political science, history, sociology, and post-colonial studies includes colonialism and imperialism. In the empire of law, ethics is no longer a set of subjective and relative values, nor is it a critical norm against which legal acts can be judged; in Law’s Empire, ethics has become a security and a guarantee for the eternity of law (Goodrich et al., 2005, p. 22). 2

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be used successfully to explain the emergence of the legal community. For example, Schepel and Wesseling (1997) have already shown how legal actors in the Luxembourg Courts, the Commission, the European law firms, and the law faculties have developed a strong legal field with a shared understanding of the function of the law. The actors within this field exhibit the same habit, an intellectual basic attitude in which the domain of European law is presented as a factional ‘rational force towards the inevitable’ and which is contrasted with the irrational, illogical, and ideological domain of national ‘politics’ (Schepel & Wesseling, 1997, p. 186). This transformation removes the settlement from the original social framework (the alternative of law) and makes it a form of technical dispute resolution. In consequence, as both the business world and the state juridify ADR to an accessory layer in litigation, the only alternative to formal dispute resolution, ADR, is disappearing.

5.5 From Shape-Less to Shape-Ness Over the past two decades an increasing number of legal professionals have engaged in a new form of professional activity, the so-called ‘civil justice design’. This entails a shift in emphasis from traditional forms of litigation towards the creation of systems that solve conflicts between repeat players (Galanter, 1974, pp. 98–103) and the design of internal grievance structures within private organizations and court-annexed ADR. The assumption that alternative justice is also popular justice is no longer valid here. For this purpose, lawyers play an increasingly important role in the design of these systems, they make internal complaints procedures, procedures for companies to resolve disputes with customers, and alternative dispute resolution systems included in court (cf. Barton & Bibas, 2017; Quintanilla & Hinkle, 2018, pp. 254–258). The practice of alternative justice is therefore becoming increasingly professionalized, so that the dispute resolution becomes a technical system of its own and is applied as a channelizing problem solver. This problem-solving aspect of ADR is a limitation. This is where the legal homology of the formal and informal dispute resolution, once again, appears. In the sense of a formal dispute resolution it is more important that a termination is provided than that an approach is agreed upon, because the “conclusion of a trial allows the disputants to stop trying to get even with one another” (Shapiro, 1981, p. 45). Just as formal dispute resolution has ‘the resolution’ as its highest virtue, in the same way ADR transforms the dispute to a resolution, a conclusion, an end. However, not every re-solution at the end of an ADR procedure can be seen as a just solution. Some disputes should not have to be ‘approached’ by ‘dispute solvers’ at all (Galanter, 1981, p. 3). ADR procedures have a beginning and an end, contrarily to disputes that may never end, particularly in persistent relationships (Langer, 1998, pp. 184–185). Many moral disputes can continue for years, becoming a cyclical alternation of fighting, truce or suppressed hostility (Van Willigenburg, 1991, pp. 20–22). Should these conflicts be transformed into a solution? A dispute does

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not always have to be solved, let alone successfully resolved (Bultena et al., 2010; Marks, 1984). Although from a legal point of view it is always logical to resolve conflicts in a successful way, from an ethical point of view it is just as logical not to resolve conflicts, as it is to resolve them. The ethical discourse, unlike the scientific or legal discourse, is not necessarily a structure of ‘causality’ or ‘obligations’. This cause-effect thinking of ‘transforming the conflict into its resolution’ is a form of legal ideology (Kennedy, 1976, pp.  28, 55, 65–69), which is also a fundamental feature of ADR. What is lost is the idea of flexible, if not shape-less (in-formal), processes ‘suitable’ for different approaches, versions, and developments. Another aspect of the technicization is the removal of lifeworld values replaced by values related to legal processes—such as (the myth of) legal certainty, predictability, verifiability, and finality. These are not just systemworld features, but systemworld ‘values’ (Langer, 1998, pp. 184–185; cf. Russell, 1954, pp. 269–280) and therefore part of formal legal ideology (cf. Kennedy, 1997, p.  88). Accordingly, alternative justice as a phenomenon itself undergoes a transformation from lifeworld to systemworld, from holism to legalism, from shape-less to shape-ness. The elementary distinction between the public and private sphere becomes blurred—i.e., what has been considered as private in the past is now part of the public sphere. This is because the objectives of the state are achieved by means other than (classic) law funds, as is the case with self-regulation (Hensler, 2014; Meier & Hill, 2007, p. 60). Through this mechanism in the public sphere and private bureaucracies, the government has an increasing possibility to intervene in the private sphere (Graeber, 2016, pp. 3–44). Alternative justice, therefore, has little to do with autonomy, as there is no real withdrawal from state power and ADR appears to be just another legal template.

5.6 The Fall of Ethics by Legal Homology In Habermas’ discursive theory of law, law as a legitimate apparatus of legislation and adjudication, must always be founded on the morality of society. Hence, law distinguishes itself from morality as a system of knowledge and a system of action at the same time. Moral norms and values of society must be packaged in linguistic and critical validity claims to be integrated in the legal system. This contribution has been formalized as an abstract language of arguments and criticism (Habermas, 1992, p. 146). Bourdieu dedicates specific considerations to the distinct linguistic and social power of law to do things with words. Vital to this capability is what Bourdieu terms the law’s ‘power of form’. This power inheres in the law’s constitutive tendency to formalize and to codify everything which arrives its juridical field (Terdiman, 1987, p. 809). As such, law is interpreted as an institutionalization of moral-practical discourse. With this formulation Habermas continues to hold on to a conception of law as an expectation stabilizing alternative to morality. The expectation created by law is that a resolution or a settlement—as a reckoning—always takes place. This legal ‘Geist der Rache’ (‘spirit of revenge’) wants the settlement

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to take place, because where there is suffering, ‘there should always be punishment’ (Nietzsche, 1895, p. 207, cf. Nietzsche, 1963b, p. 822). What then legitimizes this resolution is how a resolution came about rather than the content of this resolution: not the implication or content matters, but the form that stands for coercion. As a result, this force of law is a force of colonization, and the articulated resolution of a dispute is ‘beyond any dispute’. In this critique of alternative justice, I have argued that despite the pretension to being ethical, alternative justice is homologous to law and therefore the opposite of ethics. As is the case with formal dispute resolution, ADR makes a conflict manageable through manipulation. Luhmann argues that individuals involved in court proceedings become so entangled in their role play that the game transforms them into victim and perpetrator or injured party and laedens. They accept all legal decisions and the power effect that comes with alternative justice. In this manner, a change of values takes place within ADR, as a change of values takes place, from the ‘uniqueness of man’ to ‘utility’. In addition, ADR has become a layer in litigation. Firstly due to the business world’s favorability towards alternative dispute resolution; secondly because of the legal field itself, where legal professionals have embraced ADR; and thirdly due to the state’s legal recognition of ADR. In summary, ADR has undergone its own transformation of formalization, rationalization, and technicization, resulting in an alternative dispute resolution as its own alternative, namely a formal dispute resolution. To the extent that ADR has something to do with the realm of business ethics, it only has something to do with a legally thought or practiced business ethics. Just as language cannot be completely purified of its grammatica, I will not argue for the purification of business ethics from its iuridica.3 But, as it becomes apparent that the emphasis of ADR is prima facie on the form and that it is merely a collection of legalish systems only able to consider abstractions; alternative justice reveals itself as an ethical phantasm with little ‘alternative’ to alternative dispute resolution.

References Adler, P. S. (1993). The future of alternative dispute resolution: Reflections on ADR as a social movement. In S. E. Merry & N. Milner (Eds.), The possibility of popular justice: A case study of community mediation in the United States (pp. 67–87). The University of Michigan Press. Alexander, N. M. (2009). International and comparative mediation: Legal perspectives. Kluwer Law International. Barthes, R. (1957). Mythologies. Éditions du Seuil. Barton, B. H., & Bibas, S. (2017). Rebooting justice: More technology, fewer lawyers, and the future of law. Encouter Books.

3  Compare this with Nietzsche’s fear that mankind cannot be liberated from grammatica as long as mankind believes in God, as he mentions it in his Götzen-Dämmerung (1963a, p. 960), or the possibility in Heidegger’s Brief über den Humanismus (1947, p.  54) to liberate language from its grammatica.

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Chapter 6

New Materialism in Business Ethics The Juridical Form as Disciplinary Apparatus

If artworks are natural products then, like nature, they will change, new forms will appear, but without major contributions from isolated and creative individuals. I know that such an idea is not very popular today, when even sneezing counts as a creative act. (Feyerabend, 1999, p. 224)

6.1 Introduction This chapter contributes to the philosophical approach of business ethics by inserting the current state of business ethics—which is captured by a ‘juridical form’, i.e., semi-legal casuistry and frameworks—and Karan Barad’s posthuman theory known as ‘new materialism’, into a proposal for the study of business ethics. The merging of business ethics and posthuman theory results in a so-called ‘posthuman approach to critical business ethics’. Posthuman thinking starts with a deconstruction of the traditional idea of the subject as a unity, rooted in space and time, i.e., the ‘human’ (cf. Derrida, 1969, 2006). In their rapid development, medical science and biotechnology show us that there are plenty of opportunities to look at the human body in other ways than is customary in the humanities. These developments in the natural sciences have a major influence on what we think is possible and desirable in our lives, and therefore have a major influence on ethics. Posthumanism is therefore based on a new, differentiated notion of the human and implies an existential, instead of an essential, approach. Nonhuman life is added to this approach, which results in animals, plants, environment, earth, or in other words the whole cosmos, becoming part of this inclusive outlook (Fox & Alldred, 2020, pp.  270–271, 276–279). The traditional anthropocentric ‘scientific outlook’, as described by for instance Bertrand Russell, emphasizes both the technological power that man has been able to acquire, as well as its destructive potential: science has given humans “power over inanimate nature, over plants and animals, and finally power over human beings” (Russell, 1954, © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_6

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p.  190), with the consequence that “men have become the tools of their tools” (Thoreau, 2016, p. 36). Posthuman thinking does not start from the human as the center of the cosmos, but from the human as part of the cosmos; posthumanism is consequently a post-anthropocentrism. Another consequence of the traditional anthropocentric ‘scientific outlook’ is that humans have come to think that they are at the beginning of causal chains—a typical Western outlook that forms the foundation of Western politics, economy, education, and personal relationships. According to Paul Feyerabend, this world view is arbitrary and incorrect, because humans are part of a cosmological causality instead of an individual one. The absence of the transcendent idea of the human created in ‘the image of God’ means that a human is nothing but a part of the cosmos (cf. Rietveld & Jansen, 2020). Feyerabend (1987) states even that the scientific human’s dualism in relation to its environment needs an unscientific miracle to bridge: It needs a miracle to bridge the abyss between subject and object, man and nature, experience and reality that is the result of these conceptual “revolutions”—and creativity leading to wonderful castles of (philosophical and scientific) thought is supposed to be that miracle. Thus the allegedly most rational view of the world yet in existence can function only when combined with the most irrational events there are, namely miracles. (p. 709)

Hence, posthumanism shifts the humanist, anthropocentric outlook to a ‘postdualism’, where the traditional epistemological ‘order of things’, such as the dualisms between subject and object, human and environment, culture and nature, are at stake. According to Ferrando (2016): This shift in the social and individual perception of the human is one of the most important challenges we are currently facing as a species, as individuals, as moral, ethical and social beings. As individuals who care about the future, because we know that the future is already present. It is here now, in our acts, in our visions, in our behaviors. (p. 168)

Because of the major ethical implications of this (lack of) posthuman thinking, this chapter argues for a business ethics that is part of the posthuman approach by accessing the posthuman as post-humanism, post-anthropocentrism and post-­ dualism (Ferrando, 2016, p.  160). This nomomorphology not only looks at the agency of the knowing subject, but also at the agency of juridical forms (cf. Foucault, 1996; Schmitt, 2005, pp. 16–35) including semi-legal frameworks within the field of business ethics. My proposition is that these juridical forms weaken the field of business ethics, or even make it disappear. In addition to descriptive, empirical, social-scientific business ethics, there is also philosophical, normative, critical business ethics (De George, 2011, p. 337). Scherer and Palazzo make a distinction between a ‘positivist’ and a ‘postpositivist’ discourse (Scherer & Palazzo, 2007, pp.  1096–1097). This chapter is written in the belief that these two branches of business ethics are navel-­ gazing toward legal or semi-legal frameworks—such as self-regulation and alternative dispute resolution (ADR)—creating a discourse of utility and regulation, rather than a discourse of ethics. I take this position on the assumption that law has an oppressive and colonizing effect on business ethics and that business ethics remains

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trapped in system thinking of semi-legal casuistry and frameworks. This legal thinking in business ethics glorifies the existing status quo of corporate self-interest (e.g., individualism in organizations or shareholder approach); a conservatism which paralyzes the much-needed visionary perspective in business ethics (Rhodes & Pullen, 2018, p. 489). Posthuman thinking provides such a visionary perspective. We are facing major challenges, if not necessary decisions, when it comes to, for example, ecology, climate change, distribution of wealth and future livelihoods. Business has a major role in reducing, minimizing or resolving the adverse effects of these contemporary phenomena. The law fails to be able to offer complete resistance to these adverse consequences, because the law is often territorial in nature, instead of a globalized economy. Because the call for a visionary business ethics— or at least ethics-in-business—may never have been so great, I suggest a renewed approach to business ethics. The methodology as used in this chapter is indebted to Iris van der Tuin’s study ‘Gender with ‘Waves’: On Repositioning a Neodisciplinary Apparatus’ (2011), which is a feminist epistemological exploration of the effects of the wave model in gender studies. Feminism conceived in waves means that the feminist movement is divided into three (or four) waves that have only existed in a certain time and place. The first feminist wave can be seen at the end of the nineteenth century, the second wave in the sixties, the third wave in the nineties, and there are supporters and opponents to speak about a fourth feminist wave. Thinking and speaking in waves has the advantage that the ideology is provided with a history in which important goals have already been achieved and on which can be elaborated. But the same wave model can also be a prison of time and space. For example, a feminist from the year 2022 cannot be a second-wave feminist, while that person was indeed inspired by the ideas from Simone de Beauvoir’s study Le deuxième sexe (1949). The wave model is because of that considered in Van der Tuin’s contribution as a Foucauldian ‘dispositif’, a ‘disciplinary apparatus’. In the studies by feminist theorist Karan Barad, the dispositif becomes an instrument for understanding trends in science in a so-­ called ‘onto-epistem-ological’ way. This contribution has four following sections. In the first section, I explain what I mean by juridical forms, legal and semi-legal frameworks, and why those frameworks play an important role in business ethics. Next, I explain why there is something wrong with these frameworks taking such an important place in the discourse of ethics. In other words: what is against a legal notion of business ethics? It is stated that a legally thought business ethics is a ‘reality constitution’ that is the disciplinary consequence of the legal apparatus. This legal apparatus weakens business ethics. The following section discusses Karen Barad’s posthuman ‘new materialism’. This theory states that scientific instruments provide so-called ‘agential cuts’ and therefore have ‘posthuman performativity’. This onto-epistem-ology has consequences for ethics. The following section explains that, just as a ‘scientific instrument’ ensures a reality constitution, a ‘scientific concept’ (the set of instruments within the humanities) also ensures a reality constitution. ‘The concept of law’ has the ability to form the world. The semi-legal concepts of self-regulation and alternative dispute resolution are subsequently deconstructed and turn out to be legal rather

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than ethical concepts. Legal values are ​​ axiologically opposite to ethics, so where the legal invades the ethical, the ethical weakens. In the last section an attempt is made to escape the weakening power of the legal system. It is argued that business ethics cannot be purged from legal thinking. However, within legal thinking there are movements that make legal thinking applicable to a critical business ethics, namely the Critical Legal Studies movement: a school of critical legal theory that first emerged as a movement in the United States during the seventies. In this way, a lot of ‘ethics’—i.e., ‘ethical codes’—is exposed as a legally thought instead of an ethically thought business ethics.

6.2 Juridical Forms in Business Ethics In academic business ethics literature, developments in business ethics are usually described based on semi-legal frameworks, i.e., descriptive ethics is about compliance issues and normative ethics is about how companies can do more about ethics by subjecting themselves to certain self-regulation or ADR. Mainstream business ethics, as reflected in manuals and courses, primarily presuppose large, profitable, competitive companies. The emphasis is often on ethical codes for people working in those companies, and on compliance by developing a proper, ethical, socially responsible corporate culture (‘integrity’), and on implementing methods to prevent fraud and other violations of regulations and policies (Weber, 2001, p. 5). Of the 30 best-cited articles of the Journal of Business Ethics, 18 articles concern self-­ regulation (including 17 about CSR and one about codes of ethics) and two articles about property law.1 It is for this reason that we can speak of a ‘formalization’ (in general) or a ‘juridification’ (in particular) of both descriptive and normative discourses of business ethics. It is not surprising that in this juridification drive, in line with legal ‘jurisprudence’, the term ‘moresprudence’ looms up: “a framework for practice using reflections and advice based on earlier cases” (Nijhof et al., 2016, p. 76). The theoretical discourse in business ethics has had to cope with the practical discourse since the emergence of business ethics (Freeman, 2000, pp.  169–170; Seele, 2016; Seele, 2018, p. 647). That is not illogical, because business ethics is a form of ‘applied ethics’. Formalization and juridification make business ethics easily applicable in a variety of cases. The main purpose of such casuistry is to lead people to practical conclusions upon which they can act (Calkins, 2001, p. 241). In the second half of the twentieth century in Western democracies, the concept of self-regulation emerged as a strategy in legislative policy notes to strengthen the position of civil society organizations and companies in relation to the government: a shift ‘from government to governance’ (Koch, 2013, p.  397–398). This shift implied a change in ‘policy networks’, i.e., a change in the set of institutional ties between the government and other actors—the other actors are usually the

 See Appendix.

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professions, trade unions and large companies—that are built around shared interests in public policy and implementation. These ties stem from negotiations between the members of the interdependent networks (Rhodes, 2007, p. 1244). An important trend was that of neo-liberalism, in which greater capitalist ideological light this history took place. Neo-liberalism, on the one hand, is a broad, heterogeneous, and most controversial term that refers to certain economic ‘Schools’, such as the Freiburg School, the Chicago School, and the Austrian School, in other words: free market thinking, rejection of government intervention, and the preference for monetary solutions to economic problems. Neo-liberalism sees capital as a social duty and competition as the absolute condition for a healthy economy that creates jobs. Investment barriers, including, for example, ecology, trade union, welfare state, and tax legislation, must be removed in favor of competitive capital. Neo-liberalism is thus a legitimization ideology for the unlimited capital movement in search of favorable operating conditions (Safranski, 2003, pp. 15–16). According to Lessig, neo-liberalism argues that the law, compared to other restrictions—such as architectural, cultural, or economic restrictions—is a less effective restriction: “Its regulations, crude; its response, slow; its interventions, clumsy; and its effect often self defeating” (Lessig, 1998, p. 665). Neoliberal states developed on the other hands all kinds of indirect techniques to control people, without these states appearing to be responsible for the subsequent behavior of those people. The technique of making people ‘responsible’ implied that responsibility for social risks (such as illness, unemployment, and poverty) and for life in society was shifted to the domain for which only the individual was responsible. Every problem thus transformed into an individual problem. This ‘individual responsibility’ was supposed to have been taken away from the individual but returned by policy (Lemke, 2001, p.  201). Just as the individual must regulate himself, so must a collective of individuals (e.g., a juridical person) regulate himself. In integrative social contract theory (ISCT), self-regulation is assumed to be a set of ‘authentic norms’ in a ‘moral free space’, i.e., the freedom of stakeholders “to form or join communities and to act jointly to establish moral rules [which] specify boundaries for economic behavior while reflecting the moral preferences of the members of the community” (Donaldson & Dunfee, 1999, p. 38). It is therefore suggested that the increasing use of codes of ethics can be seen as a new form of ‘privatization’; an allusion to increased self-regulation instead of state regulation (Lambooy, 2010, p. 421). It is not illogical that from the perspective of business ethics there is big interest in these frameworks because companies themselves prefer self-regulation and ADR instead of legislation. It would find a better match with the action perspective of the companies involved, and self-made rules would lead to a greater willingness to comply. In addition, legal professionals have embraced these frameworks and state actors recognize all kinds of forms of self-regulation and ADR. A concise way to express this embracing and recognizing is as follows. Self-regulation and ADR can be described in terms of three variables: (i) the extent to which these frameworks are institutionalized, that is, they are built around specialized control institutions; (ii) the extent to which these frameworks codify their rules, i.e., make them explicit

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instead of relying solely on tacit agreements; and (iii) the extent to which substantive regulation and procedural regulation are juridified, that is, expressed in the language of law and integrated into the wider legal system (Moran, 2004, p.  68). Wherever we look, we see a growth in the degree to which self-regulation and ADR systems are institutionalized, codified and juridified—whether we are talking about labor markets, products or services as different as financial services or cultural services such as art and sport (p. 69). Just as full-legal frameworks (legislation) fall into substantive and procedural legislation, so also semi-legal frameworks fall into substantive regulation and procedural regulation, namely self-regulation and ADR. The law and these semi-legal frameworks have a homologous position. Both are formal, rational and technical in nature and are only capable of taking abstractions into account instead of the uniqueness of man (Langer, 1998). Because of this unjust system thinking, sociological jurisprudes and legal realists promoted a ‘distrust of abstraction’ (Kennedy, 1997, p. 106). In summary, there is little ‘self’, ‘informal’ or ‘alternative’ to self-regulation and alternative dispute resolution. The consequence of this is that business ethical issues are addressed legally by the field of business ethics itself. There are a lot of reasons to doubt whether ethical thinking should be legally thought. For example, it is claimed that legal thinking in business ethics is descriptive, and categorically incorrect. Law and ethics are different entities with their own characteristics—regardless of the perspective you put on ethics (for example, a choice from classical deontology, virtue ethics or utilitarianism). Even with rule-­ oriented ethics, the minimum of difference with the law is the formalism of law and the informalism of ethics, the coercion of law and the coercionlessness of ethics, and the heteronomy of law and the autonomy of ethics (Bauman, 1993, p. 124). In addition, legal thinking in ethics would have a normative effect: ethics should not be without ‘teeth’. One could say that business ethics is more popular than ever, because both companies and governments are very interested in semi-legal frameworks (Scherer, 2018, p.  399; Brooker, 1999, pp.  34–35; Adler, 1993, p.  74). However, such an increase in ‘law’ that is packaged in ‘ethics’ leads to instrumental and calculative thinking, rather than intrinsic motivation, as evidenced by psychological research (Lepper et al., 1973). To the extent that there is something to celebrate in business ethics, business ethics therefore celebrate a pyrrhic victory. Legal thinking has weakened business ethics and has become stifling in various ways. In this contribution I discuss semi-legal frameworks as a Foucauldian dispositif, i.e., a dispositif that limits and restricts, instead of improves, ethics. In the thinking of Foucault, and in his shadow Agamben, the term dispositif is used as a ‘disciplinary apparatus’. According to Agamben, in his What is an Apparatus? (2009): What is common to all these terms is that they refer back to this oikonomia, that is, to a set of practices, bodies of knowledge, measures, and institutions that aim to manage, govern, control, and orient—in a way that purports to be useful—the behaviors, gestures, and thoughts of human beings. (p. 12)

Physicist and feminist theorist Karen Barad uses an adapted version of dispositif, partly derived from the Danish physicist Niels Bohr, called ‘agency of observation’.

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In her philosophy of science, Barad (2003) proposes an ‘onto-epistem-ology’—“the study of practices of knowing in being” (p. 829)—which takes scientific practice as a starting point and at the same time situates it as part of nature. According to Barad, science is a natural phenomenon, just like the phenomena that make science its research object; science does not represent nature, it is nature (Barad, 2007, p. 67). My contribution to the discourse aims to provide a (posthumanist) discussion of the onto-epistem-ological effects of juridical forms within business ethics. It is argued herein that these frameworks have a reality constituent effect, or in other words that realities can be created with it. Those realities can be actualizing or de-actualizing. A de-actualizing reality has a weakening effect: it would appear, on occasion, that these frameworks support business ethics much like a rope supports a hanged man—“norms being the rope and reason the ropemaker” (Bauman, 1993, p. 116). In the next section, I will further elaborate on Barad’s theory of ‘posthuman performativity’.

6.3 The Ethics of Posthuman Performativity The question what the human is or has become after Nietzsche’s ‘death of God’, and Lévi-Strauss’ and Foucault’s ‘death of Man’—whether this ‘death of Man’ is a wish in the name of science or an expectation as a fate of knowledge development— affords a number of philosophical intricacies that can be compiled under ‘posthuman thinking’. In this posthuman idea houses the philosophy that is known as ‘new materialism’ (Kramarczyk & Oliver, 2020). New materialism questions the epistemological dualism of passive matter and active discourse. Such epistemological dualism preserves the methodology of representation, or in other words preserves the idea that all our knowledge about the outside world is a representation of that outside world. This representationalism establishes a contrast between the knowing subject, the ‘words’, and the outside world where the observable object is situated, the ‘things’ (cf. Foucault, 1966). Representationalism has been contradicted by feminists, poststructuralists, postcolonial critics, and queer theorists, in line with the works of Foucault and, in particular, Judith Butler (Barad, 2003, p.  804; Barad, 2007, p.  47; cf. Gougha & Whitehouseb, 2020, p.  1421). In her study Gender Trouble: Feminism and the Subversion of Identity (1990), Butler writes, for example, that Foucault points out that legal frameworks produce subjects that they immediately start to represent—the legal framework as a creator and representative of the subject. These frameworks regulate life, subjects, in negative terms and forms, define and reproduce these subjects in accordance with the requirements of those frameworks (p. 2). Representationalism is incapable of considering the constitutive, producing nature of scientific practice, which includes researchers, research objects and research instruments. According to Barad, it even makes us blind to that producing nature, because of which the active potential of matter, the ‘agency’, is being misunderstood.

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As an alternative to the epistemological dualism of representationalism, Barad presents her own philosophy of science, which she calls ‘agential realism’. This philosophy of science is a radical posthumanism that intertwines ethics, ontology and epistemology and blurs dualisms. It is a criticism of the assumptions that (i) positivist realism has the exclusive right to solve ontological problems (the material issues), and that (ii) postmodern social constructivism has the exclusive right to solve epistemological problems (the discursive issues). This reasoning starts with the conclusion of Bohr that scientific concepts are constituted within certain compositions of researchers, research objects and research instruments, and hence lead to certain ‘material-discursive practices’. According to Barad (2003): Material-discursive practices are specific iterative enactments—agential intra-actions— through which matter is differentially engaged and articulated (in the emergence of boundaries and meanings), reconfiguring the material-discursive field of possibilities in the iterative dynamics of intra-activity that is agency. Intra-actions are causally constraining nondeterministic enactments through which matter-in-the-process-of-becoming is sedimented out and enfolded in further materializations. (pp. 822–823)

The notion of ‘intra-action’ is opposite to the common notion of ‘interaction’. Interaction presupposes the existence of independent entities or ‘relata’ (would-be antecedent components of relations). The notion of intra-action, on the other hand, represents a deep conceptual shift. “It is through specific agential intra-actions that the boundaries and properties of the “components” of phenomena become determinate and that particular embodied concepts become meaningful” (p.  815). Phenomena are the ontological units that are reflected in the material-discursive practices. Both human and non-human bodies intra-act in the formation of phenomena. Representationalism is described by Barad as a ‘Cartesian by-product’, i.e., a particularly inconspicuous consequence of the Cartesian division between ‘res cogitans’ (the mental substance) and ‘res extensa’ (the extended and unthinking things), as distributed by the knowing subject (p. 806). Barad argues that if matter intra-acts, and we cannot assume individual bodies, we cannot assume that differences exist prior to perception. This raises the question of how those differences that are perceived should be understood. Despite the so-called ‘Cartesian cut’, which is accompanied by the naturalization of exclusive and absolute categorical essences, Barad has an eye for the existence of those categories (p. 815). That means that we can indeed see categories and differences in our daily reality. But these differences are never exclusive nor absolute and are the result of ‘agential cuts’ that are subject to ‘posthumanist performativity’ and change. These agential cuts are created as the sum of all kinds of actors, in and by a (political) opposition itself. Categories are therefore products of performative interventions that arise from the power of the word and (political) representation. This is Barad’s ‘understanding of how matter comes to matter’ (2003): In summary, the universe is agential intra-activity in its becoming. The primary ontological units are not “things” but phenomena—dynamic topological reconfigurings/entanglements/ relationalities/(re)articulations. And the primary semantic units are not “words” but

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material-­discursive practices through which boundaries are constituted. This dynamism is agency. Agency is not an attribute but the ongoing reconfigurings of the world. (p. 818)

The fact that these cuts are created means that the matter that causes such a cut can be held ‘accountable’ for it. In this way, onto-epistem-ology acquires an ethical component. Matter that was initially passive, neutral and without action potential, is given a non-neutral position in Barad’s new materialism, in which matter intra-acts and thus contributes to the course of the history of meaning. Matter can therefore be kept accountable for what is created, i.e., which agential cuts are made, and which are not. Because the onto-epistem-ology cannot be viewed separately from that accountability, Barad defines the inseparability of ethics, ontology and epistemology as ‘ethico-onto-epistem-ology’ (Barad, 2007, p. 90). According to Ryan Burg, an argument for such a new materialist approach in business ethics would change the way communities are shaped, with the consequence that it also can change business virtues (2018, p. 251).

6.4 The Disciplinary Apparatus in Business Ethics The disciplinary apparatus of natural science, as described by Barad, can accordingly be made applicable to the humanities. Van der Tuin (2011) sees the humanities’ ‘concepts’, with which humanities science comes to its knowledge production, as their ‘measuring instruments’. To compare: the biologist uses a microscope, the astronomer uses a telescope, and the gender theorist uses the wave model. That is, the biologist comes under the influence of the microscope, the astronomer under the influence of the telescope, and the gender theorist under the influence of the wave model, in their process of knowledge production. In other words, according to Barad (2007): In an agential realist account, matter does not refer to fixed substance; rather, matter is substance in its intra-active becoming—not a thing but a doing, a congealing of agency. Matter is a stabilizing and destabilizing process of iterative intra-activity. Phenomena—the smallest material units (relational “atoms”)—come to matter through this process of ongoing intra-activity. “Matter” does not refer to an inherent, fixed property of abstract, independently existing objects; rather, “matter” refers to phenomena in their ongoing materialization. (p. 151)

There are instruments (concepts) between ‘the words and the things’, in both natural science and in human science. This presupposes an epistemological dualism, a representationalism. If we want to elaborate on the disciplinary apparatus of business ethics raised in this contribution, we must leave this dualistic paradigm of business ethics behind us. The aim is to think through the effects of semi-legal frameworks on business ethics and to dismantle them. Concepts have the ‘ability’ to form the world, whether it stimulates and stabilizes or weakens and destabilizes the world. The conceptual framework of legal and semi-legal frameworks will now be analyzed as a disciplinary apparatus in the context of business ethics.

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I have previously argued in this section that business ethics which is filled in in a juridical (or semi-legal) manner has harmful consequences for business ethics itself, because of the categorically opposite axiology of the realm of the ethical and the realm of the legal. The (semi-)legal frameworks fix ethics and weakening informal, coercionless and autonomous thinking. I have also previously argued that in addition to the philosophical approach of business ethics, a descriptive, empirical approach exist which is mostly developed by people who are educated in the social sciences and who typically work in business schools. This branch of sport began, according to De George, in the sixties, but initially did not start under the heading ‘business ethics’. The academic dispute between philosophical business ethics and empirical business ethics has historical roots and can be traced back to the seventies and eighties when the philosophers invaded the territory of social scientists. The dispute continues until today, where the question remains as to whether business ethics has absorbed semi-legal frameworks, or whether semi-legal frameworks have absorbed business ethics. A good example of this is the discussion about the role of business ethics in corporate social responsibility, a framework that emphasizes self-­ regulation, but at the same time refers to compliance with laws and international norms (Lambooy, 2010, p.  14), and vice versa (De George, 2011, pp.  347–348; Velasquez, 2014, pp. 23–27). The business ethicist’s confidence in the ethical effect of self-regulation as a semi-legal framework is based on the reasoning that in a non-­ legally regulated space, the so-called ‘moral free space’, there would be space for (business) ethics in the form of self-regulation. The question now is whether this confidence is worth trusting, i.e., what the effect of self-regulation as a disciplinary apparatus of business ethics is, where a well-considered freedom is the ontological condition (Fornet-Betancourt et al., 1987, p. 115). Self-regulation fits in with the neoliberal trend of alternative government styles, which is also called ‘alternative justice’ (Fitzpatrick, 1992, pp.  169–180). In the literature on this subject, the question is posed whether and to what extent this form of justice can be a true alternative to the violence and coercion of law imposed by public authorities, such as the state (Merry & Milner, 1993); self-regulatory rules differ from state-regulatory rules, because the regulation is private instead of public in nature. Self-regulation is a term that can on the one hand narrowly refer to those cases where the government has formally delegated the power to regulate and on the other hand refer to those cases where the private sector perceives the need to regulate itself for whatever reason. Where the legislator talks about ‘self-regulation’, it at least refers to a specific replacement of state regulation: a regulation that ideal-­ typically, subject to task or content, conditions self-enforcement. The legislator then sets preconditions for the implementation of the set goals or duties of care or calls for self-regulation under the announcement of detailed public-law rules if the private sector itself does not come up with their own rules. In short, it is naive to assume that self-regulation does arise spontaneously, instead of as the result of a direct or an indirect assignment to that end. It is confusing that ‘self-regulation’ means the same as ‘autonomy’, but where autonomy refers to spontaneity in small communes, self-regulation has the effect generally of undermining of that autonomy. Or vice versa, as the young Hegel

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(1961) already wrote: “What is applicable in a small society is unjust in a state” (pp. 86–87). The concept of self-regulation should therefore not be confused with the concept of autonomy. The goals that self-regulation should lead to are not necessarily the goals that the subordinate to self-regulation would have devised. Autonomy, as described in for example Foucault’s ethics, is indeed always one of submission, but of a deliberate individual submission to a specific ethical code. Self-regulation therefore appears to be an instrument, a legal framework, of government policy, whether this is a national, supranational, or international government. Self-regulation therefore does not belong to the realm of the ethical, but to the realm of the legal, where the rule is an order of the sovereign that is enforced by the threat of violence (cf. Austin, 1995, p. 22). ‘Compliance’ with such rules may be a useful activity, but it is not ethics. The fact that self-regulation cannot be called an alternative or informal form of regulation is furthermore apparent from the procedural counterpart of self-­ regulation, namely ADR. ADR also belongs to the realm of the legal rather than the realm of the ethical (Jansen, 2021). The big difference between formal dispute resolution (by a judge) and ADR would be that formalism transforms a dispute into a legal dispute, and that the informalism of ADR does not transform the dispute but transports it to a resolution. The latter means that parties participate in the entire process (holism) and that parties are therefore more satisfied and have peace of mind with the result—in other words, that parties experience a form of procedural justice, where an agonistic and alienating legal dispute is unable to offer that. The assumption here is again that alternative justice, as an alternative to formal justice (informalism), is the opposite of formal justice (formalism). The question is whether this dichotomy is sustainable. For example, Woolford and Ratner (2008) call ADR no more than an ordinary reproduction, rather than a challenge to the hegemony of law (pp. 4, 33–34). Fitzpatrick also argues against this ‘mythology of modern law’ (1992): alternative justice erroneously opposes the malignant state that formalizes, forces and thereby juridifies (pp. 169–170). Just as the transformation into a formal dispute settlement is characterized by manipulation and control, ADR also forces an apparent voluntary nature in which litigants bear ‘their own responsibility’ for the course and development of the process. An illusion of informalism is created in which the legal ideology is reproduced, the effects of which are the result of fixed, preformed processes and power relations (Fitzpatrick, 1996, pp. 457–464). The assumption that the decision-­making power within the broad range of ADR lies with the ordinary people, the parties to the proceedings, or with the community, is, in short, a naive idea. As with a formal dispute settlement, there is therefore no question of a dispute trans-portation, but of a dispute trans-formation. This transformation moves the dispute from an original social framework (the alternative to law) to a more formal-legal framework. A clear characteristic of this is that formal-legal frameworks have a beginning and an end. That makes sense from a legal perspective, but from an ethical perspective it is neither logical nor illogical to always come to a ‘resolution’. The fact that ADR is basically there to resolve disputes makes it an inflexible and formal process that does not suit different approaches, versions, and developments. As it becomes clear,

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alternative justice explicitly focuses its attention on form. It is a collection of legal or legal-like frameworks that can only take account of abstractions of humans instead of humans. Therefore, alternative justice reveals itself as an ethical oxymoron with few alternatives to alternative justice, i.e., ethics (cf. the Chaps. 4 and 5 of this study). A business ethics that thinks in terms of legal or semi-legal behavioral guidance is not an ethically thought business ethics. A legally thought business ethics therefore weakens an ethically thought business ethics. However, it seems naive to think that this legal attitude will change soon; a legally thought business ethics, a business ethics with teeth, is very attractive. Only then will business ethics become usable and accountable. Because of the popularity of a legally thought business ethics, it is a naive and useless exercise to purify business ethics of its legal thinking. It is more interesting to investigate the action potential of a business ethics that is legally thought for an ethically thought business ethics.

6.5 A Posthuman Approach to Critical Business Ethics As discussed, the current alternative regulatory styles are twentieth-century constructions, where business ethics believes that ‘alternativity’ has something to do with ethics. After all, if a method of regulation does not come from the formal legislator, but from the informal private sector, it must refer to a ‘moral free space’ that one has filled in oneself. Because there is a great interest of business ethics in alternative justice, the legal ideology (axiology) of formalism, coercion, and heteronomy, on the one hand, and rationality and utility on the other hand in business ethical discourse produce its own legally conceived business ethics, which cannot be purified from it. For this reason, it is worth trying to investigate the power of legal thinking, legal ideology, in business ethics. Examples of studies on ideology in a scientific discourse can be found in law and in psychology. In law, Critical Legal Studies (CLS) suggests how a mainstream ideology in the field can be criticized as a rationalization of the conservative status quo. Within psychology, the Moral Foundations Theory (MFT) also suggests how a mainstream ideology in the field can be criticized as a reflection of a self-righteous, us-them mind-set. According to Eastman (2013), this research in the field of law and psychology can be fruitfully made applicable to the question whether business ethics is also the subject of ideology. By deconstructing law and adjudication, CLS exposed the claim to the right to objectivity and justice, as a means of suppressing the weak; adjudication only proved the amoral outcome of unequal power relations. CLS is therefore an ideology criticism that tries to open the way to the emancipation of those oppressed (Maris & Jacobs, 2011, p. 25–26). Just as CLS has continuously deconstructed formal justice, so too, business ethics inspired by CLS can expose alternative justice that it co-opts to incessant deconstruction. This is important for understanding the role of new and alternative regulatory styles for business ethics. Unlike a business ethical discourse that uses morally narrow Aristotelian ethics of virtue, Kantian

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deontology, or Benthamite utilitarianism (and other theories that only emphasize certain moral foundations and fail to capture the totality of moral feeling and experience such as ‘Stakeholder Theory’ and ‘Integrative Social Contracts Theory’) distils to which regulation we should be subjected (Eastman, 2013, pp. 546–547), it is the main task of a critical business ethics to understand how we are constantly subject to concepts and regulations that are packaged, by both jurists and ethicists, in ‘ethics’ (i.e., the ‘ethical’ code). The weakening that business ethics is struggling with, because it is considered legally rather than ethically, is accompanied by the disappearance of ethics-in-­ business-­ethics. I tried to provide an analysis of this disappearance of ethics and offered a way to escape this disappearance. Legal concepts are a disciplinary apparatus within business ethics, with the result that business ethics is subject to juridification. That is, business ethics is the subject of formalism, coercion and heteronomy on the one hand, and rationality and utility on the other—legal values that are opposed to ethics whose ontology is freedom. Business ethics, however, cannot be excluded from this legal thinking, so a critical legal thinking must be used to promote a critical business ethics, and therefore ethics.

Appendix

1. Branco, M. C. & Rodrigues, L. M. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69, 111–132 2. Asongu, S. A. (2013). Harmonizing IPRs on software piracy: Empirics of trajectories in Africa. Journal of Business Ethics, 118, 45–60 3. Palazzo, G. & Scherer, A. G. (2006). Corporate legitimacy as deliberation: A communicative framework. Journal of Business Ethics, 66, 71–88 4. Barnea A. & Rubin, A. (2010). Corporate social responsibility as a conflict between shareholders. Journal of Business Ethics, 97, 71–86 5. Andrés, A. R. & Simplice A. A. (2013). Fighting software piracy: Which governance tools matter in Africa? Journal of Business Ethics, 118, 667–682 6. Maloni, M. J. & M. E. Brown (2006). Corporate social responsibility in the supply chain: An application in the food industry. Journal of Business Ethics, 68, 35–52 7. Jenkins, H. (2006). Small business champions for corporate social responsibility. Journal of Business Ethics, 67, 241–256 8. Maretno, H. J. & Harjoto, A (2011). Corporate governance and firm value: The impact of corporate social responsibility. Journal of Business Ethics, 103, 351–383 9. Bird, R., Hall, A. D., Momentè, F. & Reggiani, F. (2007). What corporate social responsibility activities are valued by the market? Journal of Business Ethics, 76, 189–206 10. Lepoutre, J. & Heene, A. (2006). Investigating the impact of firm size on small business social responsibility: A critical review. Journal of Business Ethics, 67, 257–273 11. Bear, S., Rahman, N. & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97, 207–221

CSR Property law CSR CSR Property law CSR

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12. Williamson, D., Lynch-Wood, G. & Ramsay J. (2006). Drivers of environmental behaviour in manufacturing SMEs and the implications for CSR. Journal of Business Ethics, 67, 317–330 13. Turker, D. (2009). Measuring corporate social responsibility: A scale development study. Journal of Business Ethics, 85, 411–427 14. Perrini, F., Russo, A. & Tencati, A. (2007). CSR strategies of SMEs and large firms. Evidence from Italy. Journal of Business Ethics, 74, 285–300 15. Jamali, D. (2008). A stakeholder approach to corporate social responsibility: A fresh perspective into theory and practice. Journal of Business Ethics, 82, 213–231 16. Kaptein, M. & Schwartz, M. S. (2008). The effectiveness of business codes: A critical examination of existing studies and the development of an integrated research model. Journal of Business Ethics, 77, 111–127 17. Jo, H., Harjoto, M. A. (2012). The causal effect of corporate governance on corporate social responsibility. Journal of Business Ethics, 106, 53–72 18. Jamali, D. & Mirshak, R. (2007). Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics, 72, 243–262 19. Harjoto, M. A. & Jo, H. (2011). Corporate governance and CSR nexus. Journal of Business Ethics, 100, 45–67 20. Pirsch, J., Gupta, S. & Grau, S. L. (2007). A framework for understanding corporate social responsibility programs as a continuum: An exploratory study. Journal of Business Ethics, 70, 125–140

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Chapter 7

Business Ethics on Its Last Legs The Indifference of Hospital Management Towards the Ethical Treatment of Amputated Body Parts I wanted to swallow myself by opening my mouth very wide and turning it over my head so that it would take in my whole body, and then the Universe, until all that would remain of me would be a ball of eaten thing which little by little would be annihilated: that is how I see the end of the world. (Genet, 1943, p. 76)

7.1 Introduction In this chapter I present a case study in which ethics and law are left behind in a flight into pragmatism. The chapter deals with a specific aspect of business ethics, namely the ethics of waste management (cf. Diaz, 2007). More precisely, it is about how hospitals treat amputated body parts. It therefore presents a case on hospital management ethics, which is a subdomain of business ethics. The chapter posits that the way in which hospitals routinely deal with the problem of what to do with ‘left over’, ectomized, body parts of patients is indicative of the subsumption of ethics under quasi-legal, formalized procedures. Ectomized body parts are institutionally defined as unhygienic waste that must be disposed of according to certain fixed procedures, generally involving testing and incineration. I will look into the question of what a hospital typically does with ectomized body This is an English language reflection upon three earlier Dutch publications: Jansen, B. & Baart, R. I. C. (2018). Van wie is mijn geamputeerde been? Informed consent bij de verwijdering van lichaamsmateriaal. Nederlands Tijdschrift voor Geneeskunde, 162(15); Jansen, B. & Baart, R. I. C. (2020a). Ben ik mijn been, heb ik mijn been, waar is mijn been? Naar een radicale keuzevrijheid na amputatie. Ars Aequi, 69(1), pp. 9–20; Jansen, B. & Baart, R. I. C. (2020b). Een bedrijfsethiek van menselijk ziekenhuisafval. Tijdschrift voor Gezondheidszorg en Ethiek, 30(3), pp. 79–83. These Dutch language publications are appended to this study and have been presented on a number of occasions, including: (1) ‘Am I my leg, is my leg mine, where is my leg?’, presented at MANCEPT Panel on ‘Political Philosophy of the Body’, at the University of Manchester in 2018; (2) ‘Am I my leg, is my leg mine, where is my leg?’, seminar organized at Exeter College, University of Oxford in 2020. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4_7

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parts and how this routine hospital practice is legitimized by describing a specific case, namely that of an amputated leg. I will argue that important ethical issues have come under pressure from subsuming them under quasi-legal and technocratic procedures. The case is presented here as a caveat, as a limiting case, that reveals where the dynamics released by approaching business ethics from a legal perspective may lead us, namely to the total subjugation of ethical thought to technocratic proceduralism. To those who problematize the phenomenon of a ‘leg’ as an ethical task within the framework of the law, a new reality reveals itself when we consider that amputee patients have rights over their amputated limbs. These rights can, for instance, be traced back to John Locke’s fundamental argument that “every Man has a Property in his own Person”. This concept that we are our own property stems from Locke’s famous natural law principle that “this nobody has any right to but himself. The Labour of his body and the Work of his Hands, we may say, are properly his” (Locke, 1986, p.  130). In addition to Locke’s legal ownership, philosopher Rom Harré speaks also to the possibility of ‘metaphysical ownership’ (Harré, 1991, p. 19, 28, 121). This is to say, that the body unmistakably belongs to someone: my body is unmistakably mine (this is Locke). This is an internal relation of a person to his body. Among the conditions for being the very person I am is the fact that I am embodied in this body only. However, we must also recognize that the question concerning ownership of a body is somewhat of a blind spot and not the primary focus of our attention, which in turn complicates the taking of decisions about that body or parts of that body. If a person scheduled to undergo amputation were to be asked to decide for him or herself what the final destination of the amputated body part should be, he or she would have many options to choose from. As a possible result, amputees might opt to, e.g., bury their leg, cremate it, or take it home with them. The case study set forth in this chapter shows, contrary to current practice, that doctors should make every amputee aware of these options for ethical and legal reasons. Doctors should avoid an unquestioning exercise of power as the only possible reality. This chapter forms a summary of and reflection upon three studies I undertook together with Rogier Baart, which studies were previously published and presented at conferences. First, the procedure surrounding an amputation will be outlined and reflected upon from an ethical and legal perspective. After this, the reason for the apparent absence of any ethical and legal consideration on the part of a large majority of medical practitioners will be sought in the indifference of technology and related to Heidegger’s being-toward-death.

7.2 The Current Situation: A Leg After Amputation The precise ethical and legal status of the human body, or parts that have been separated therefrom, has left literature and practice divided for some time now. This gives rise to questions concerning control over body material and the ethical and

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legal basis for exercising such control. This subject has been published on extensively—nationally and internationally—from the perspective of organ donation and corpse care. However, this chapter focusses on the ethical and legal implications that a possible right of ownership or control over body material may have for physicians when discussing post-operative scenarios with a patient. It advocates the greatest possible degree of freedom for patients in expressing their personal preferences regarding the treatment of body parts separated from their bodies as a result of amputation. Dutch law already largely provides for this freedom of choice, but the law is often insufficiently put into practice or not taken into account at all. Specifically, prior to amputation patients should, if possible, be presented by the doctor with the option of making their own choice as to what they want to do with their amputated body part (the doctor’s information). The doctor should accommodate whatever choice the patient makes (the patient’s disposition). People may wonder how important it is that (prospective) amputees are offered choices by their physician. Well, first and foremost, offering them this option means that any latent need for it is brought to light and that amputated body material is removed from the taboo zone. In addition to this potential need for being offered options, there are indications that lead us to believe that there is already a group of patients who want to exercise this option, who want to be offered choices. This is, for example, apparent from the fact that numerous funeral homes cater specifically for the burial and cremation of limbs. There are also special cemeteries for limbs. Apparently, some people feel strongly about having an amputated limb cremated or buried, be it from a religious, cultural or rehabilitation perspective. Amputation is often a last resort following a series of medical treatments. Since most amputations are planned after an extended preliminary medical process, the period leading up to the amputation surgery itself offers an ideal opportunity for psychological preparation of the patient. Indeed, preoperative preparation is accompanied by a less complex postoperative grief experience. When the amputation of a body part is necessary, ideally (insofar as one can speak of such) the doctor discusses the proposed procedure with the patient beforehand. The patient is informed of the necessity of the intervention, the risks involved, possible alternatives and the risks associated with inaction. The procedure is then performed after the patient has given his informed consent to the proposed procedure. Sometimes prior patient consent cannot be obtained. If in such a case it is also not possible to obtain permission for the procedure from the immediate family as representatives of the patient, the doctor may perform an emergency operation under the presumption of deferred consent. After amputating, pathological examination of tissue taken from the removed body part is usually carried out. In most cases the separated body part is then discarded or sometimes used for medical research. The patient’s prior consent to disposal is often not sought, nor is the patient made aware of alternative options. With the doctor’s or hospital’s decision to dispose of the removed body part, the body part falls subject to rules regarding so-called ‘specific hospital waste,’ and the body part, together with syringes, scalpels, infusion bags and similar items, must be

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transported in a separate blue container to ZAVIN (Ziekenhuis Afval Verwerkingsinstallatie Nederland, Dutch Hospital Waste Processing Plant) in Dordrecht. There, the hospital waste is incinerated. It is the doctor who, by deciding to dispose of the body part, labels the body part as specific hospital waste and is then obliged to dispose of it in the blue container intended for this purpose. There are clear alternatives to simply labelling a body part as specific hospital waste. However, in practice patients are rarely made aware of the possibility of taking the removed body material home, for example in a prepared state, or of having it buried or cremated. A survey conducted among a dozen funeral homes in the Netherlands reveals that there are alternatives to this practice. For example, people who lose a body part can plan for a funeral in the same way people who lose someone because of death can. Indeed, this already happens, albeit sporadically. Cost estimates obtained from crematoria indicate that cremating an adult leg taken just below the knee costs €100 to €612. To this must be added costs relating to the scattering of the ashes, the making of an ash jewel, or burying the body part in a columbarium—depending on the arrangement. It is a cost and a care proposition equivalent to that of the funeral of an unborn or young child, for example. In a second survey primarily surgical and vascular surgical departments of ten hospitals were approached in the period August until November 2017. They were asked how they viewed an amputated body part, i.e., whether it belonged to the patient, whether the patient could take it home, have it buried or cremated, and whether and how doctors informed patients about this or discussed the options with them. It emerged from the survey that certain body parts are often given to the patient (kidney stones, gallstones, and wisdom teeth, for example). One hospital indicated that nothing at all is given to patients. There was, however, no consensus among the hospitals regarding the question whether amputated body parts belong to the patient (ethically or legally) and whether it is possible for the patient to take an amputated body part home or have it buried or cremated. About half of the hospitals indicated that the patient would be allowed to do so, formally speaking, but that it is discouraged. In all ten cases it was indicated that the doctor, as a rule, did not inform the patient in advance of alternatives for the disposal of the amputated body part, nor was patient permission requested for the disposal of the body part as specific hospital waste. In response to the article on this subject in the Nederlands Tijdschrift voor Geneeskunde (Dutch Medical Journal, Jansen & Baart, 2018), which specifically targets doctors in the Netherlands, one doctor asserted that he had asked ‘almost all patients who were to undergo amputation of a leg whether they wanted to keep the amputated leg’. At our request, the national association for people with an amputation or congenital reduction of a limb, Korter maar krachtig (in English ‘Shorter but powerful’) published a questionnaire for its members in the association’s magazine asking this question (Van den Kommer & Dietz, 2018). The responses received from amputee patients indicated that the patients in question had not been asked anything about the disposal of body parts, either before or after the amputation had been performed.

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In 2014, the media published a number of news articles about the case of Leo Bonten (Pauw, 2014; Boon, 2014). Mr. Bonten had asked the Erasmus Medical Center in Rotterdam, of his own volition and prior to the amputation of his leg, whether he could take his amputated leg home with him (in prepared form). He was thwarted by the hospital, which postponed his operation because of the request. Because the hospital would not cooperate, Bonten was ultimately forced to donate his leg to science, with the goal to get it back subsequently. He indeed received this leg later from a forensic expertise center after the leg had first been prepared, complete with flesh and skin. In short, no uniform hospital practice appears to exist in the Netherlands regarding the treatment of amputated body parts. Doctors do offer patients the option of taking certain small body parts, such as molars and gallstones, home with them. But where limbs are concerned, patients are generally not asked how they would like their body part to be treated after its removal and the body part is generally discarded as hospital waste. This inconsistency in medical practice is unjustified. Patients have rights over amputated body parts. Moreover, they may have good and valid reasons for wanting to have an amputated body part buried, cremated, or used for other purposes.

7.3 Ethical Considerations Hospitals bear a responsibility to offer patients an informed choice regarding these types of issues. More specifically, a hospital bears this responsibility on the grounds of human dignity and the precautionary principle. Active freedom of choice relates not only to the exercise of rights that a person has over his body parts. Freedom of choice is more than that; it is the most positive and inclusive expression of respect for the patient’s human dignity. It is, however, apparent that there are still many issues that need to be resolved. For example, my argument applies in principle to all tissue that is surgically removed. Consequently, what, from an ethical perspective, is the difference between a limb and other tissue or body materials that are removed from a human body? The question becomes whether the patient should also have control over all remnants of organs following pathological examination, or even over blood leftover after laboratory examination, or over blood taken during an operation. This question could also be considered from a broader perspective when comparing the loss of a body part to other forms of grief (Maguire & Parkes, 1998; Belon & Vigoda, 2014). Research shows that the mourning of a lost limb bears a convincing resemblance to the mourning process following the loss of a loved one. This same demarcation criterion (limb versus other bodily tissue or materials) also plays a role when answering the question of what should be classified as waste and what should not. A whole series of justified practical questions can be asked and it would, therefore, be good if room would be created to discuss in each specific case with the patient, as to what should be done with human remains after amputation. After all,

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informed freedom of choice for patients facing amputation is an essential part of practicing ethics in healthcare. Cultural differences must also be considered, as should the issue of who should bear the costs of removal for a funeral, in such a way that removal for a funeral does not endanger public health. The framework within which regulations of this kind must be constructed is always the legal framework. That is to say, the corpus of concrete legal sources, the objective law from which legal subjects can extract their subjective rights.

7.4 Legal Considerations This contribution looks to property law, health law and human rights as starting points for considering a framework within which regulations for the treatment of human remains could be formulated. Firstly, there is the property law perspective. The patient is, and remains, the owner of his amputated body parts, or at least has exclusive control over them.1 The law provides for this control. Secondly, from the perspective of health law it is required that a patient’s consent to the disposal of an amputated body part is obtained in an informed and transparent manner. This requires that the patient is made aware of existing postoperative options and rights prior to the granting of informed consent for the operation itself. Providing options, or in other words fully informing the patient prior to the medical procedure, should be part and parcel of the medical treatment. For this reason, the medical practitioner should always convey all options to the patient. This is currently only sporadically the case.2 Thirdly, from a human rights perspective there is every reason for giving people an active choice, should they so desire, to bid farewell to an amputated part of their body in a dignified manner.3 Given the seriousness of the painful and vulnerable situation in which patients find themselves, this is a decision that should always be respected. Where a deceased parakeet is carefully buried in the garden under a bed of pansies, or the ashes of a beloved dog are scattered by grieving family members, an amputated leg deserves more care than a one-way ticket to waste-disposal in Dordrecht. The latter is a position that an individual is at liberty to assume, but the opposite is equally conceivable and indeed permissible. It is true that the law convincingly facilitates the possibility for patients to choose to have an amputated limb cremated, buried, or disposed of as special hospital waste. However, doctors hardly ever bring the ‘choice’ option to the attention of patients, as the findings presented in Sect. 7.3 demonstrate. As a result, patients are unable to exercise their rights either because they are unaware of them and are not enlightened by their  Cf. Articles 1:1, 3:1, 3:2, 3:4, 3:40, 3:83, 3:98, 3:107, 3:113, 5:1, 5:3, 5:16, 5:17, 5:18 of the Dutch Civil Law Code. 2  Cf. Articles 7:446, 7:448, 7:449, 7:450, 7:467 of the Dutch Civil Law Code. 3  Cf. Articles 8, 9 Convention for the Protection of Human Rights and Fundamental Freedoms; cf. Convention on the rights of persons with disabilities. 1

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physician, or because they are sometimes even actively discouraged from exercising them. To ensure that patients are made aware of their rights and options the medical practitioner should, therefore, as part of the medical treatment, ask each patient before undergoing an amputation whether he or she would like to have the body part buried or cremated after the operation, or whether the hospital may dispose of it as special hospital waste.

7.5 The Indifference of Technology The current hospital’s practice of incineration of human remains is justified by reference to public health issues, e.g., the protection of the public from germs and the risk of contamination. Notably, however, not all disposed body material forms a real threat to public health, which makes a difference when addressing the question whether an amputated limb is in fact, or should be treated as, waste destined for the incinerator. Hospital managers automatically opt for a psycho-hygienic solution to seemingly ‘dirty’ problems, thereby mentally relieving employees by framing the whole amputation as a hygiene problem. In this way ethics is kept out of the discourse through psychological secretion technology. Treating the leg as unhygienic waste is thus the practical homology with which the psychological problem is solved at the expense of ethics, which must and will always question the technological procedures and proper nature of ‘the dirty’ (Ashforth et  al., 2017, p.  1275). Within Leonard J. Weber’s medical business ethics, this raises the business ethical question of how the hospital’s responsibility for the environment should be understood. Environmental management is concerned with all technological activities aimed at reducing the environmental impact of business operations (Jeurissen, 2009a, b, p.  208). For hospital management this means reducing hospital waste (Weber, 2001, p. 131). Environmental ethics suggest such thinking in terms of ecosystems. The creation of waste puts pressure on the stability of the environment. A basic ethical and ecological insight is that medical waste is, therefore, not neutral. On the one hand, declaring something to be ‘medical’ is in itself an act with political, ethical, and legal consequences (Fahrenfort, 2005, p. 274). On the other hand, declaring something to be ‘waste’ is also an act with political, ethical, and legal consequences, e.g., when we pollute with waste, we destroy our natural capital and thus reduce our ability to maintain that ‘us’. By failing to realize the full amplitude of care, technological indifference to amputated body parts has caused health care to become entangled in a unique and precarious ethical situation (Kennedy, 2007, p. 154). A basic principle of environmental ethics is, therefore, the need for prudence. Being ethical, ecologically speaking, is not only a matter of intention or knowledge; it is also a matter of avoiding or reducing the risk of potential harm, regardless of intention or knowledge. Building upon this environmental ethical viewpoint, it can be concluded that the designation of something as ‘waste’, or ‘waste treatment’ as such, are preceded by an ethical decision. If this decision is taken in an environmentally ethical manner, it must be

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exercised with caution. In the case of specific hospital waste, this means critically examining what should go to the incinerator and what should not. If a patient believes that his or her amputated limb is not waste and there is no danger to the public health if the limb is not incinerated immediately, then there is an ecological argument in favor of leaving the choice of what to do with the limb up to the patient.

7.6 Postlegomena: The Negative Being-in-the-World in the Mode of Violence In his essay The Question Concerning Technology (1954), Martin Heidegger treats the technologization of thought as a forgery of openness to being. Starting with Plato and Aristotle, a metaphysical hardening process has revealed itself in the philosophical tradition of the West, in which the openness to being closes itself asymptotically. With a utilitarian approach to man and nature as adjustable materiality, present-day technology is the concretization of this thinking. For Heidegger, the essence of this technology is an imperative: we are ordered by being to organize this materiality of man and nature in order to make it increasingly efficient. In line with Heidegger’s analysis of technology, Greg Kennedy shows in his An Ontology of Trash (2007) that man’s relationship to the material world has become based on concepts such as buy, consume, and trash rather than make and repair. Today we have come to recognize that such a relationship endangers our existence. Trash, however, Kennedy argues, is not a phenomenon that results from consumption or from a consumer society. According to his ontology, the existence of technological matter implies a priori that the essence of that matter has always been in the trashiness of it (p. xi–xii). According to Kennedy, rationalist metaphysics wants to transcend its physical worldliness without having to admit its dependence on it, leading to a “negative being-in-the-world in the mode of violence” (Kennedy, 2007, p. 161). In this violent being-in-the-world, the ontology of trash focuses on a technological idiosyncrasy, i.e., the inevitable disposability of everything and everybody. Kennedy writes for example about manipulated tasteless fast food that makes us obese; we are literally and figuratively obese due to metaphysical concepts. The more food is technologized, the more food becomes trash and the more our own bodies become trash. “[O]ur ontological nature has been formulated thus: food is need; need is the body; the body is mortality; mortality is essential openness to the meaningful world of beings” (p. 108). Since the difficulty of the human body is its finitude, the denial of this, and thus the relationship that trash maintains with that body, is the most problematic of all. Trash reveals the material failure of the human body, our existential shortcomings. Trash is thus the result of the transhumanist attempt to deny human mortality (p. 23). Technology thus tends to shut down the body’s natural capacity for experience and makes the body disappear. When we replace our own sensitive flesh with insensitive technology, we become insensitive to the world. This numb

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body in a world full of trash produces trash because technology wants to get rid of the world. De facto, technology gets rid of the world by destroying the body (p. 53). This technological destruction of the body becomes manifest when the body (or parts of it) itself become trash, i.e., human hospital trash. The technological solution to the metaphysical threat of human hospital trash is the ‘trash destroyer’, which later came to be known as the ‘incinerator’ with variations such as the ‘crematorium’. Its invention dates to the 1870s. Nevertheless, it was only at the beginning of the twentieth century that incineration became a common trash disposal procedure. Incinerators primarily addressed the material problem of trash; the constantly expanding volume of trash could be reduced to a fraction of its original size thanks to the furnace. According to Kennedy, however, the primary attraction of incinerators to the nascent science of sanitary engineering lay in their ability to destroy the nature of trash; after all, no germ could survive the violence of the furnace. The desire for total control through large-scale destruction of human hospital trash suggests an underlying violence at work in its technological solution (p. 91). Human hospital trash, in this ontology by Kennedy, is the more than equivocal denial of human mortality and thus the more than unequivocal denial of ‘Sein-zum-­ Tode’, ‘being-toward-death’. Through this denial of the uniqueness of the death experience, the ‘Dasein’ (‘there-being’) is not confronted with itself even though death is an idiosyncratic experience in which the Dasein can realize that he is an individual, a self. The importance of being-toward-death, explained by Heidegger himself, goes as follows (1996): Being-toward-death is the anticipation of a potentiality-of-being of that being whose kind of being is anticipation itself. In the anticipatory revealing of this potentiality-of-being, Da-sein discloses itself to itself with regard to its most extreme possibility. But to project oneself upon one’s own most potentiality of being means to be able to understand oneself in the being of the being thus revealed: to exist. Anticipation shows itself as the possibility of understanding one’s own most and extreme potentiality-of-being, that is, as the possibility of authentic existence. (p. 242)

Being-toward-death thus enables the Dasein to be thrown back on itself, to become detached from das Man, to become detached from the non-authentic form of existence of everyday man. The Dasein, through the realization of its finitude, is thus able to withdraw from das Man and discover the singularity of his and other’s existence. This final chapter before the general conclusion asserts the proposition that in the practice of hospitals with respect to amputated body parts, implicit ethics come to light. This implicit ethics is that of technological thinking. Where one does not see ethics and law as possibilities of being, one gets bogged down by technology. Ethics has the potential for placing man in his full being center stage. In law, this human being is regulated and manipulated into a legal derivative of itself. Finally, man becomes conquered by the abundance of technology and, like Icarus, flies too close to the sun in a last transhumanist shot. There he ends, starting true posthumanism.

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References Ashforth, B. E., Kreiner, G. E., Clark, M. A., & Fugate, M. (2017). Congruence work in stigmatized occupations: A managerial lens on employee fit with dirty work. Journal of Organizational Behavior, 38(8), 1260–1279. Belon, H. P., & Vigoda, D. F. (2014). Emotional adaptation to limb loss. Physical Medicine and Rehabilitation Clinics of North America, 25(1), 53–74. Boon, L. (2014). Een lamp, gemaakt van zijn eigen been [A lamp made of his own leg]. NRC, 2 September. Diaz, L. F. (2007). Ethics in solid waste management. Waste Management, 27, 593–594. Fahrenfort, M. (2005). Medicalisering [Medicalization]. In C.  W. Aakster & J.  W. Groothoff (Eds.), Medische sociologie. Sociologische perspectieven op ziekte en zorg (pp.  269–276). Wolters-Noordhoff. Genet, J. (1943/1966). Our Lady of the Flowers. Panther. Harré, R. (1991). Physical being: A theory for a corporeal psychology. Blackwell. Heidegger, M. (1954). Die Frage nach der Technik. In Vorträge und Aufsätze. Vittorio Klostermann. Heidegger, M. (1996). Being and time. State University of New York Press. Jansen, B. & Baart, R. I. C. (2018). Van wie is mijn geamputeerde been? Informed consent bij de verwijdering van lichaamsmateriaal [Who does my amputated leg belong to? Informed consent in the disposal of body material.]. Nederlands Tijdschrift voor Geneeskunde, 162(15). Jeurissen, R.  J. M. (2009a). Bedrijfsethiek en verantwoord ondernemen [Business ethics and responsible entrepreneurship]. In R.  J. M.  Jeurissen (Ed.), Bedrijfsethiek: een goede zaak. Van Gorcum. Jeurissen, R. J. M. (2009b). Verantwoordelijkheid voor natuur en milieu [Responsibility for nature and environment]. In R. J. M. Jeurissen (Ed.), Bedrijfsethiek: een goede zaak (pp. 203–218). Van Gorcum. Kennedy, G. (2007). An ontology of trash: The disposable and its problematic nature. State University of New York Press. Locke, J. (1986). Two treatises of government. Everyman’s Library. Maguire, P., & Parkes, C. M. (1998). Coping with loss. BMJ, 316(7137), 1086–1088. Pauw, S. (2014, July 16). Geamputeerd been wordt lamp [Amputated leg becomes lamp]. Medisch Contact. Van den Kommer, C., & Dietz, H. (2018). Van wie is mijn geamputeerde been? [Who does my amputated leg belong to?]. Kort & Krachtig, 5(18), 26. Weber, L. J. (2001). Business ethics in healthcare: Beyond compliance. Indiana University Press.

Chapter 8

Conclusions and Final Remarks

To all those who still wish to talk about man, about his reign or his liberation, […], to all those who refuse to formalize without anthropologizing, who refuse to mythologize without demystifying, who refuse to think without immediately thinking that it is man who is thinking, to all these warped and twisted forms of reflection we can answer only with a philosophical laugh – which means, to a certain extent, a silent one. (Foucault, 1966, pp. 353–354)

8.1 A Final Introduction Central to this nomomorphology lies a view on the juridification of business ethics, or a business ethics that is ‘legally thought’. This is a process, or way of thinking, that is to some degree inevitable, but which also needs to be approached with skepticism. My hypothesis was that business ethics has sought refuge in legal forms which, being homologous concepts, evade ethics. To examine this hypothesis, a variety of legal forms applied in business ethics were scrutinized. The sub-studies in this study indeed demonstrate that business ethics has a tendency toward nomophilia: a loving embrace of law and the forms in which it manifests itself, which inclination may, however, also be the kiss of Judas with ethics as the new Akeldama.1 In the sub-studies on open standards, corporate codes, and alternative forms of dispute resolution, the possibility conditions of ethics are examined. In each sub-­ study, a deconstruction takes place that exposes the camera iuridica in business ethics. It is concluded that ethics appears to be subsumed by law in important areas. This last chapter contains conclusions and final remarks. It serves of course to conclude this study, but also to inspire new research. The next sections of this final chapter will present the conclusions of the sub-studies, which will be discussed in a broader context.  The ‘nomophilia’ is also a certain moth:

1

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8.2 Conclusions Each of the five sub-studies illuminates an aspect of the main research question. All of these studies are small quests within the grand quest: What distinctive juridical forms can be attributed to business ethics, and what do they imply for critical business ethics? The focus on business ethics in this nomomorphology is always on legally thought business ethics that exhibits itself in a certain morphological idiosyncrasy. I will first discuss the conclusions of the individual sub-studies before moving on to the conclusion to the main research question.

8.2.1 Conclusions from the Sub-studies • Chapter 2 deals with the question what the relationship is between business ethics and law as promulgated in extant business ethics literature. Business ethics, deconstructed as a legally thought business ethics, shows us that its various forms can fulfill a valuable function. It can, for example, inform people about the limits of acceptable behavior. Through the effective socialization process associated with juridical forms, legally thought business ethics creates efficiency in enforcing behavioral expectations. The pointe is, however, that no matter how well-­ intentioned legally thought business ethics may be, it is always just positive ethics, not critical ethical reflection. Legally thought business ethics establish specific rules and principles that are legal in the rigidity or flexibility of their application. In order to illustrate that legally thought business ethical forms are in reality not ethical, but rather juridical forms, they can be positioned alongside the quantities that Roberto Unger grants exclusively to the law, namely ‘formalism’ and ‘objectivism’. In this mode of thinking there is no distinction between (the panoptic of) law and (the panoptic of) ethics, i.e., people obtain the status of subject by being subject to a discourse. Such discourse determines what can and cannot be said and thought. Within business ethics, a camera iuridica has been formed within which it is only possible to think in terms of involuntary submission. To the extent that business ethics is legally thought, it creates subordinated people—‘subjects’—and what we call ethics is nothing more than a reflection, confirmation, and reiteration of the legal status quo. In that case, legally thought business ethics is nothing more than an apologia of law. • Chapter 3 deals with the question to what extent open norms in formal law can be interpreted ethically. Modern legal thinking is divided, on the one hand, into the idea that law and ethics are not, or not necessarily, interrelated (normative and descriptive legal positivism, respectively) and, on the other hand, the idea that law and ethics are inextricably linked (hermeneutical constructivism). According to the latter theory, in reaction to legal positivism, ethical principles and values inevitably play a role in the practice of positive law, especially in the

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interpretation of open norms. According to Kennedy, the legal relationships that citizens have vis-à-vis one another are the subject of a constant tug-of-war between two incompatible ideas: individualism and altruism. The altruist prefers the open norm, such as ‘reasonableness and fairness’, to the rigidity of the rule. However, according to supporters of critical legal studies these so-called ethical principles and values merely mask partial interests using different weapons, and thus hermeneutical constructivism is nothing more than a continuation of unethical legal positivism. Kennedy and other crits attempted to expose the claims to objectivity and justice of the law and to reveal the suppression of marginalized groups that lies behind those claims. This criticism of the legal ideology is intended to clear the way for emancipation of oppressed groups. Be that as it may, to the extent that an open norm in formal law is interpreted ethically, this ethics is a liberal one. In Law’s Empire, ethics is no longer a set of subjective or relative values, a critical attitude against a status quo morale, or a critical norm against which legal acts can be judged. In Law’s Empire, ethics became a Platonist gatekeeper for the Apollonian fortress of safety, happiness, and security. • Chapter 4 deals with the question to what extent self-regulation can be considered to be ethics. Like formal law, self-regulation is an undeniably heteronomous construct.2 A well-known theory for why people obey this heteronomous construct was formulated by John Austin: law is the command of the sovereign that is enforced by threats of violence, state violence. The Dutch Corporate Governance Code is exemplary of this heteronomy in self-regulation because it has achieved the optimum form of juridification: enshrinement in the law. Consequently, the singular individual who wishes to think consciously about good and bad boardroom decisions and processes will be sorely disappointed. Business ethical norms that can be deduced from specific values to which this individual aspires, have already been written down for him. The act of thinking has thus been subsumed by the Code; very efficient indeed. The decision to enshrine the Code in law cannot be seen in isolation from the experiences with the non-­binding recommendations of the Peters Committee (the informal predecessor of the Tabaksblat Committee), which recommendations were published in 1997. It took an evaluation of these recommendations by the Netherlands Corporate Governance Foundation (NCGF) in 2002 to reveal that their overall effect had been generally limited, if not non-existent. The NCGF came to the unfortunate conclusion that the corporate sector could not be entrusted with improving its own corporate governance. Such an externally generated Code is, therefore, associated with dysfunctionality, such as a shift in purpose: from meaningful dialogue on ‘the purpose of the corporation’, to pure ‘compliance’

 Supiot, 2017, p. 21: “This is how the human being is instituted as subject of law: through a two-­ sided subjection in which autonomy is achieved through the heteronomy of the law. In the West, as for other cultures, there is no ‘I’ possible without an authority that guarantees this ‘I’, or, to put it in legal terms, without an authority that guarantees personal status.” 2

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measured using performance indicators. Compliance with externally imposed rules is undoubtedly a useful or even necessary exercise for many natural and legal persons, but it has nothing whatsoever to do with ethics. • Chapter 5 deals with the question to what extent alternative dispute resolution (ADR) in business can be considered to be ethics. Despite the pretention of being ethical, this chapter illustrates that alternative justice is homologous to law and is, therefore, the opposite of ethics. As is the case with formal dispute resolution, ADR renders a conflict manageable through manipulation. What then legitimizes this form of dispute resolution is how resolution of the dispute came about, rather than the content thereof: not the implication or content matters, but the form that stands for coercion. As a result, this force of law is in effect a force of colonization, and the articulated resolution of a dispute is ‘beyond any dispute’. Individuals involved in court proceedings become so entangled in their role play that the game transforms them into perpetrator and injured party (victim or laedens). They accept all legal decisions and the power effect that comes with alternative justice. In this manner, a shift in values takes place within ADR, i.e., from the uniqueness of man to utility. In addition, ADR has become just another layer in litigation. Firstly, due to the business world’s favorable attitude towards it; secondly, because the legal field and its legal professionals have embraced ADR; and thirdly, due to the State’s legal recognition of ADR. In summary, ADR has undergone its own transformation of formalization, rationalization, and technicization, resulting in ADR as an alternative to formal dispute resolution. To the extent that ADR has anything to do with the realm of business ethics, this applies only to a legally thought business ethics. As it becomes apparent that ADR’s emphasis is prima facie on the form, and that it is merely a collection of semi-­legal systems that are only capable of considering abstractions, alternative justice reveals itself as an ethical phantasm with little in way of ‘alternative’ in ADR. • Chapter 6 deals with the question of how a legally thought business ethics can be critical of its own legal, systemic thought. This chapter provides an analysis of the demise of ethics in business ethics and offers a way of overcoming this development. The demise of ethics becomes apparent when self-regulation and ADR start taking the place of business ethics or, in other words, are presented as (the) ways of employing business ethics. Legal concepts act as a disciplinary apparatus. When they play a role within business ethics, the result is that business ethics becomes subject to juridification. That is, business ethics becomes the subject of formalism, coercion, and heteronomy on the one hand, and rationality and utility on the other—legal values that are diametrically opposed to ethics, whose ontology is freedom. Business ethics cannot, however, be excluded from legal thinking. Consequently, critical legal thinking must be used to promote critical business ethics. Just as critical legal studies have continuously deconstructed formal law, so too can they inspire business ethics to subject the juridical forms that it co-opts to perpetual deconstruction. This is important for understanding the role of new and alternative regulatory styles for legally thought business eth-

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ics. In order to determine the regulation(s) to which we should be subjected, the standard ethical business discourse uses ethically narrow Aristotelian ethics of virtue, Kantian deontology, or Benthamite utilitarianism, and other theories that only emphasize certain ethical foundations and fail to capture the totality of ethical feeling and experience, such as ‘Stakeholder Theory’ and ‘Integrative Social Contracts Theory’. By contrast, the main task of critical business ethics is to understand how we are constantly subjected to concepts and regulations that are packaged and ‘sold’ to us, by both jurists and ethicists alike, as ‘ethics’. • Chapter 7 attempts to reveal what happens when business ethics are not integrated into management processes and decisions even though the law requires such an approach. This chapter posits the theory that an implicit ethics comes to light in the manner in which hospitals treat amputated body parts. The law requires a patient’s informed consent prior to the disposal of an amputated body part. However, hospitals do not as a rule discuss all post-operative options for dealing with amputated body parts with their patients because they generally either do not accommodate any options other than destination waste, or they prefer the waste option. Consequently, this is the only option that is included in pre-operative patient communication. The implicit ethics revealed by such behavior is that of technological thinking. Where one does not see ethics and law as possibilities of Being, one becomes bogged down in technology.

8.3 Final Remarks The findings in the sub-studies in this study demonstrate that important types of business ethical practices cannot be considered to be part of the ethical realm as their qualities are idiosyncratic legal qualities. Attempts to establish rules, regulations, principles and procedures by means of alternative justice measures under the name of ethics (e.g., Peppet, 2004, p.  78; Bryant, 2009, Spalding & Kim, 2015; Bultena et al., 2018; Schormair & Gerlach, 2019) are usually undertaken in good faith, but for formalistic and objective reasons belong to the camera iuridica in business ethics, and thus to a ‘legally thought business ethics’. Business ethicists have felt compelled to prop up their works with legally haunted digressions, examples, and annexes in order to establish their ethical systems, theories, and their applications. This quest for the specters of law is, to borrow Derrida’s words, a ‘hauntology’ of business ethics (Derrida, 1994, pp. 10, 63, 202). We should attend to these margins of ethics as inevitable inclusions in the business ethical discourse. Doing so reveals, through deconstruction, how business ethics is thought and practiced more legally than a business ethicist might have wished. What is business ethics to do now that it has become apparent that it has an important camera iuridica? First, it is important to recognize that business ethics is legally thought. By doing so space is created for a different kind and way of thinking within the discipline, and thus also for a different kind and way of practicing business ethics. This will then be

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a way of thinking and practicing business ethics that makes room for all that is non-­ legal thinking, without thereby seeking to eliminate legal thinking in business ethics. It is among the recommendations in this nomomorphology to bring even more legally thought phenomena in business ethics to light, so that more organizational and philosophical creativity may emerge. The èthos deserves to be taken seriously, meaning that the discourse of business ethics should not give in (‘Ruinanz’) to the comfort of juridism (‘das Leichte’). The non-legally thought business ethics propagated herein attaches little importance to codes, formulas, and other things included in legally thought ethics. This is not to say that there is nothing to code. It is to say that the act of adding value to something by means of a code robs that which is considered so valuable of its value. In addition, the code has an ethical pretense but does not provide ethical direction. Even in the best-case scenario when a code of ethics is in some way democratically created, for example by stakeholder theory or by Habermasian deliberation (ideally such as in, for example, political Corporate Social Responsibility3), there is a divide between the legitimacy of the code and the implementation thereof, which will always remain a power decision. Thus, ethics always transcends the ethical code, and bridges two abysses in thinking: the individual and openness. This nomomorphology places the emphasis of business ethics on the individual, on the person. Of importance is a person’s individuality and singularity. I am aware that such emphasis is somewhat unusual within business ethics, because business ethics is often viewed as an organizational theory and practice. By emphatically opting for the individual in business ethics, the imposition of subjectivities and the suppression of the Other becomes increasingly difficult to sustain. In this way, this business ethics refuses to simply accept the rules and representations of the past, even though they provide security, comfort, and constancy. The fact that the business ethics of openness leaves no ‘ethical code’ behind, does not render it relativistic. To the contrary, it creates space for the individual to determine its position without immediately reverting to empty formulas. The possibility of an alternative future cannot arise if we remain stuck in old values, principles, rules, and representations. The business ethicist must, therefore, tread on the margins of error. For Derrida (1997, p. 57), for example, experimentation is the way in which the aporia of being sandwiched between the unconditional ethics of openness and the conditional law of closedness must take shape, without which ethics would remain an amorphous, irresponsible, and ineffective enterprise. Let the call to experiment be pre-eminently something that I now entrust to business students. I wish them success and, most of all, lots of thoughts.

 For a specific elaboration on the business ethical legitimacy of political CSR, see: Bosman, M. & Jansen, B. (2023). Corporate Sustainability through Private Regulation? The Question of Policy Coherence for Sustainability. In L. Mélon (Ed.), Sustainability in Public Procurement, Corporate Law and Higher Education. Routledge (accepted, to be published). 3

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Index

A Abstraction, 1, 5, 30, 34, 86, 93, 102, 108, 126 Adat, 53, 54, 56–58 Adequate, 13 Adequatio, 13 Aesthetics, 15, 31, 32 Agamben, G., 10, 102 Agency, 85, 98, 102–105 Agential cut, 99, 104, 105 Agonism, 84 Akeldama, 123 Aletheia, 13 Alternative dispute resolution (ADR), 3–5, 20, 31, 32, 81–83, 85, 87–93, 98–102, 107, 126 Alternative justice, 2–5, 8, 9, 69, 81–93, 106–108, 126, 127 Altruism, 58, 60, 61, 125 Amputation, 114–119 Analogy, 8, 25, 87 Anscombe, G.E.M., 33 Anthropocentrism, 98 Anthropology, 2, 25 Apartheid, 25 Aporia, 128 Apparatus, 5, 73, 86, 92, 97–109, 126 Application, 2, 4, 7, 8, 11, 19, 22, 32, 33, 44, 52, 56, 58, 62, 72, 73, 76, 86, 124, 127 Applied ethics, 2, 10, 23, 100 Appropriative constitution, 89 Arbitration, 81, 89 Argumentation, 4, 9, 19, 23

Aristotle, 7, 120 Austin, J., 25, 77, 107, 125 Austrian School, 101 Authentic existence, 121 Authority, 1, 2, 7, 10, 33, 42, 69, 71, 84, 86, 106 Autonomy, 5, 35, 52, 71–74, 76, 77, 83, 85, 92, 102, 106, 107 Axiology, 88, 106, 108 B Bakan, J., 68, 71 Barad, K.M., 5, 97, 99, 102–105 Baris vs Riezenkamp, 50, 51 Barthes, R., 85 Bauman, Z., 35, 102, 103 Beauty, 7, 16 Beauvoir, S.L.E.M.B. de, 99 Behavior, 4, 14, 20, 26, 29, 31–33, 36, 44, 49, 51, 55, 68, 69, 71, 98, 101, 102, 124, 127 Being, 6–8, 15, 127 Being-in-the-world, 120 Being-toward-death, 6, 114, 121 Benda-Beckmann, F. von, 46 Benjamin, W.B.S., 10, 15, 84, 86 Biology, 8 Bohr, N., 102, 104 Bollnow, O.F., 14 Bonten, L., 117 Bos, R. ten, 12, 14 Bourdieu, P.B., 9, 77, 89, 90, 92 Bureaucracy, 27, 85, 92

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 B. Jansen, The Juridification of Business Ethics, https://doi.org/10.1007/978-3-031-39908-4

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148 Business ethics and law, 3, 6, 12, 19–29, 83, 124 Business law, 3, 6, 12, 19–29, 83, 124 Butler, J.P., 103 C Camera iuridica, 20, 21, 29, 30, 34, 123, 124, 127 Capital, 54, 76, 89, 90, 101, 119 Cartesian by-product, 104 Cartesian cut, 104 Casuistry, 3, 82, 97, 99, 100 Categorical imperative, 24 Centralism, 46, 62 Chicago School, 101 Code, 1, 4, 19, 27–30, 32–36, 41–45, 47, 49, 53, 54, 57, 58, 70, 72–77, 84, 100, 101, 107, 109, 123, 125, 128 Code Tabaksblat, 72 Codification, 36, 45, 46 Coercion, 4, 5, 9, 29, 35, 69, 71, 83, 93, 102, 106, 108, 109, 126 Colonization, 28, 83, 88–91, 93, 126 Compliance, 1, 2, 21, 22, 24, 29, 33, 35, 41, 57, 67–77, 100, 106, 107, 125, 126 Comply or explain, 41, 42, 72, 73, 76 Computability, 35 Concept of law, 99 Conditioned self-regulation, 70 Conduct, 1–4, 19, 22, 24–26, 34, 35, 49, 50, 52, 60, 61, 67, 70, 75, 76, 90 Consciousness, 25, 31, 46 Consequentialism, 23, 24 Consequentialist standards, 23 Constructivism, 7, 104 Contract law, 48, 50–53, 55–58 Control, 8, 59, 74, 84, 86, 87, 101, 102, 107, 114, 115, 117, 118, 121 Conventional standard, 23 Corporate governance, 41, 43–44, 57, 72, 73, 75, 77, 125 Corporate governance code, 3–5, 19–20, 41, 42, 45, 72, 74–77, 125 Corporate law, 3, 4, 41–46, 48, 49, 52–54, 56–58, 60–62, 76, 128 Corporate social responsibility (CSR), 44, 46, 57, 70, 100, 106 Corporation, 1, 4, 13–15, 24, 26, 68, 77, 88, 125 Cosmos, 97, 98 Crane, A., 20, 21, 23, 24 Crematorium, 121 Critchley, S., 35, 36

Index Critical business ethics, 2–3, 5, 97, 98, 100, 108–109, 124, 126, 127 Critical business ethics studies, 28–35 Critical legal studies (CLS), 20, 29, 31, 32, 36, 58, 59, 88, 100, 108, 125, 126 Cynicism, 13, 14 D Dasein, 6, 121 Death of Man, 103 Decision, 2, 3, 5, 19, 24, 27, 28, 36, 43, 44, 50, 51, 55–57, 62, 71–74, 76, 77, 85, 89, 93, 99, 114, 115, 118, 119, 125–128 Decolonization, 54 Deconstruction, 9–13, 31, 35, 36, 59, 83, 86, 97, 108, 123, 126, 127 Dehumanization, 5 Deliberation, 26, 128 Democracy, 100 Deontological standard, 24 Deontology, 83, 102, 109, 127 Derrida, J., 10, 13, 31, 36, 60, 84, 86, 97, 127, 128 Descriptive legal positivism, 59, 124 Destruction, 9, 83, 121 Dichotomy, 9, 83, 107 Difference, 2, 4, 7, 11, 20, 21, 23–26, 35, 43, 45, 46, 52, 53, 61, 62, 68, 82, 102, 104, 107, 117–119 Discipline, 3, 10, 29, 30, 36, 86, 127 Discourse, 2, 3, 6–12, 14, 15, 19, 23, 24, 31, 33–35, 46, 83, 92, 98–100, 103, 108, 119, 124, 127, 128 Disposition, 89, 115 Dispute, 5, 26, 32, 54, 57, 58, 60, 61, 75, 81–85, 87–89, 91, 93, 106, 107, 126 Dispute resolution, 81–93, 123, 126 Donaldson, T., 23, 25, 101 Doorn, J.A.A. van, 69 Douglas, M., 25 Douzinas, C., 20, 32, 34, 36, 59, 82, 84, 86, 87, 90 Doxa, 6 Dualism, 98, 103–105 Dunfee, T.W., 23, 25, 101 Dutch East Indies, 44, 45, 53 Dworkin, R.M., 11, 32, 43, 90 E Ellickson, R.C., 85 Empire, 29 Empirical, 7, 22, 23, 98, 106

Index Empiricism, 7, 12 Enforcement, 1, 22 Episteme, 6 Epistemology, 6–12, 104, 105 Equator Principles (EP’s), 70 Ethically thought business ethics, 30, 34–35, 100, 108 Ethical subject, 34, 35 Ethico-onto-epistem-ology, 105 Ethics and law, 2, 6, 8, 10, 20, 21, 23, 25, 29–31, 83, 113, 121, 127 Èthos, 128 F Faculties, 7, 91 Feminism, 99, 103 Ferrando, F., 98 Feyerabend, P.K., 98 Fiction, 2, 85 Finding law, 11, 42, 59 Fitzpatrick, P., 30, 69, 82, 85–88, 106, 107 Flâneur, 15 Formal dispute resolution, 3, 81, 82, 84–87, 89, 91, 93, 107, 126 Formalism, 5, 20, 29, 32, 34–36, 46, 76, 83–86, 88, 89, 102, 107–109, 124, 126 Formalization, 2, 93, 100, 126 Formal law, 4, 5, 82, 87, 124–126 Foucault, M., 10, 15, 20, 30–32, 34, 61, 86, 88, 98, 102, 103, 107 Free self-regulation, 69, 70 Freiburg School, 101 Freud, S., 10, 15, 31, 86 Friedman, M., 26 G Gadamer, H.-G., 10–12, 26 Galanter, M., 91 Gender trouble, 103 George, R.T. De, 23, 25, 98, 106 Goal-rationality, 27 God, 8, 98, 103 Goff, J.-P. le, 14 Good faith, 33, 41, 43, 44, 47, 50, 51, 57, 127 Goodrich, P., 20, 32, 36, 59, 82, 87, 90 Governance, 4, 67, 100 Governmentality, 31 Graeber, D., 85, 92 Grammatica, 35, 93 Guideline, 14, 15, 29, 51, 70, 71, 74

149 H Habermas, J., 8, 22, 26–28, 35, 84, 92 Habitus, 90 Hachamovitch, Y., 20, 32, 36, 59, 82, 87, 90 Hart, H.L.A., 9, 22, 25 Hauntology, 127 Haviltex, 48 Heath, J., 23 Hegel, G.W.F., 86, 106 Heidegger, M., 6–8, 93, 114, 120, 121 Hermeneutical constructivism, 59, 124, 125 Hermeneutic circle, 11 Hermeneutics, 10, 11 Heteronomy, 1, 5, 35, 74–75, 77, 102, 108, 109, 125, 126 Hobbes, Th., 86 Hofstadter, D.R., 43 Homology, 8, 87, 91–93, 119 Horace, 21 Hospital, 113–121, 127 Hospital trash, 6, 121 Human body, 97, 114, 117, 120 Human rights, 9, 118 Human, the, 59 I Icarus, 121 Ideal type, 5, 82, 83 Identity, 20, 29, 87, 103 Ideology, 31, 53, 58, 60, 99, 101, 108 Incinerator, 119–121 Indifference, 113–121 Individualism, 51, 58, 60, 99, 125 Individual responsibility, 101 Indonesia, 4, 41–62 Informal justice, 2 Institution, 3, 4, 13, 19–21, 28, 29, 67, 68, 70, 83, 84, 88, 101, 102 Institutionalism, 35 Institutions justes, 15 Instrumentalism, 35, 83 Integrative Social Contracts Theory, 109, 127 Integrity, 22, 23, 34, 100 Interdependent view, 83 Interpretation, 4, 8, 10, 11, 34, 36, 41–43, 48, 49, 52, 54, 58, 59, 61, 62, 125 Interpretivism, 10 Intra-action, 104 Islamic law, 53, 54, 56, 62 Iuridica, 35, 93

150 J Jeurissen, R.J.M., 20, 21, 23, 24, 77, 119 Jones, C., 12, 14, 15 Journal of Business Ethics, 100 Judas, 123 Judicial dispute resolution, 89 Juridical field, 89, 92 Juridical form, 2, 28, 97–103, 124, 126 Juridification, 1, 5, 9, 15, 20, 21, 28–30, 75–77, 89, 90, 100, 109, 123, 125, 126 Juridified business ethics, 19–36 Juridism, 13, 14, 128 Jurisprudence, 32, 43, 47, 53, 55–58, 100 Justice, 7–9, 13, 14, 24, 32, 35, 43, 55, 59, 69, 81–84, 86, 87, 91, 106–108, 125 K Kant, I., 5, 7, 24 Kaptein, M., 67 Kelsen, H., 9 Kennedy, D., 32, 34, 52–54, 58–61, 85, 86, 88, 92, 102, 119, 121, 125 Kennedy, G., 120 Kierkegaard, S.A., 13 Knowledge, 6–11, 30, 68, 84, 86, 88, 92, 102, 103, 105, 119 Korter maar Krachtig, 116 Kramer, M., 77 L Lambooy, T.E., 46, 70, 101, 106 Language, 4, 6, 7, 10, 19, 27, 33, 35, 49, 85, 92, 93, 102 Latour, B., 25 Law and business ethics, 22 Law and economics, 32 Law and ethics, 9, 13, 21, 25, 28, 36, 77, 102, 124 Law and literature, 32 Law and principles, 32 Law’s empire, 90, 125 Leg, 5, 114–119 Legal anthropology, 62 Legal ideology, 59, 88, 92, 107, 108, 125 Legalistic mistake, 33 Legality, 8, 9, 24, 27, 68 Legally thought business ethics, 2–5, 9, 12, 16, 19–21, 29–35, 99, 108, 124, 126–127 Legal philosophy, 20, 35 Legal pluralism, 46, 53, 61, 62

Index Legal positivism, 8–10, 24, 59, 124, 125 Legal subject, 11, 30, 86, 118 Legal system, 2, 4, 24, 26, 42, 44, 46, 53, 56, 58, 61, 62, 81, 82, 86, 87, 92, 100, 102 Legal thinking, 1–3, 5, 35, 58, 99, 100, 102, 108, 109, 124, 126, 128 Legal value, 5, 75, 100, 109, 126 Legendre, P., 84 Legitimacy, 8, 9, 23, 26, 27, 62, 68, 128 Leichte, das, 128 Levinas, E., 35 Lévi-Strauss, C., 103 Liberalism, 69, 101 Lifeworld, 27, 82, 84, 87, 90, 92 Lindenbaum vs Cohen, 55 Lingering, 15 Litigation, 24, 75, 85, 88, 89, 91, 93, 126 Locke, J., 114 Love, 8, 60 Luhmann, N., 9, 85, 93 Luijk, H. van, 21 M Man, das, 121 Manipulation, 87, 88, 93, 107, 126 Marcuse, H., 31 Margins, 60, 127, 128 Marx, K., 15, 31 Material-discursive practice, 104, 105 Materialism, 5, 97–109 Material law, 5 Matten, D., 20, 21, 23, 24 Mediation, 81, 87–90 Medical business ethics, 119 Melé, D., 24 Method, 3, 6–12, 19, 24, 26, 71, 73, 81, 83, 87, 88, 100, 108 Methodology, 6–12, 29, 33, 99, 103 Mill, J.S., 84 MKB-Nederland, 67 Monitoring Committee Corporate Governance Code, 73 Moore, S.F., 71 Moral agent, 34–35 Moral Foundations Theory (MFT), 108 Moral free space, 101, 106, 108 Moresprudence, 100 Myth, 14, 85–88, 92 Mythology, 85 Mythology of modern law, 30, 86, 107

Index N Naturalism, 8 Natural law, 7, 8, 24, 83, 114 Negative being-in-the-world in the mode of violence, 120–121 Nelson, K., 20, 24 Neo-liberalism, 101 Netherlands, 4, 25, 41–62, 67, 68, 75–77, 116, 117, 125 Neutralization, 89 New materialism, 5, 97, 99, 103, 105 Nietzsche, F.W., 10, 15, 34, 86, 93, 103 Nomomorphology, 1–3, 6, 8, 9, 12, 13, 16, 19, 61, 77, 82, 83, 98, 123, 124, 128 Nomophilia, 123 Nonhuman life, 97 Normative legal positivism, 59, 124 O Objectification, 34 Objectivism, 20, 29, 32–34, 124 Onto-epistem-ology, 99, 103, 105 Ontology, 5–12, 104, 105, 109, 120, 121, 126 Ontology of trash, 120 Open norm, 3, 4, 41–44, 47–49, 55, 57–62, 124, 125 Operationalization, 4, 15, 19, 24 Order, 2, 8, 9, 20, 22–24, 30, 33, 46, 48, 52, 55, 58, 61, 68, 72, 75, 107, 120, 124, 127 Order of things, 30, 98 Order without law, 85 Ordoliberalism, 26, 27 Organization for Economic Co-operation and Development (OECD), 29, 70 P Paine, L.S., 22, 24, 29, 83 Palazzo, G., 24, 27–29, 98 Panopticon, 10 Parker, M., 12, 14 Pascal, B., 7 Patient, 5, 113–120, 127 Penalties, 1 Performativity, 104 Philosophy of law, 8 Plas vs Valburg, 51 Plato, 6, 83, 120 Pluralism, 35, 46, 53, 61 Political corporate social responsibility, 27, 128

151 Political CSR, 29 Politicization of business ethics, 29 Politics, 31, 59, 91, 98 Porter, M.E., 77 Positivism, 7, 8 Posner, R., 9, 32 Post-anthropocentrism, 98 Postcolonial studies, 32 Post-dualism, 98 Posthuman performativity, 99, 103–105 Posthumanism, 97, 98, 104, 121 Postmodernism, 7, 9, 31 Potentiality-of-being, 121 Power, 4, 8–10, 20, 23, 28, 30–34, 52, 56, 59, 61, 69, 71, 75, 82, 85–88, 90, 92, 93, 97, 100, 104, 106–108, 114, 126, 128 Power of form, 92 Pragmatism, 5, 113 Predictability, 35, 90, 92 Privatization, 90, 101 Procedural justice, 85, 107 Procedure, 1, 2, 13, 20, 22, 25–27, 33, 36, 45, 75, 84, 85, 88, 89, 91, 113–115, 118, 119, 121, 127 Psychoanalysis, 32 Pullen, A., 99 Q Queer theory, 32 Quidditas, 83 R Rationalism, 6 Rationality, 5, 35, 108, 109, 126 Rationalization, 90, 93, 108, 126 Rawls, J., 35, 83 Raz, J., 9 Realism, 7, 104 Reality, 2, 5–10, 15, 31, 83, 87, 98, 99, 103, 104, 114, 124 Reality construction, 9, 83 Reason, 5–8, 10, 22–24, 33, 35, 56, 73, 83, 85, 86, 100, 102, 103, 106, 108, 114, 117, 118, 127 Reasonableness and fairness, 3, 4, 41–62, 75, 125 Relativism, 7, 13, 23 Representationalism, 103–105 Res cogitans, 104 Res extensa, 104

152 Responsibility, 4, 22, 24, 27, 28, 31, 36, 57, 69, 75, 101, 107, 117, 119 Rhodes, C., 46, 99 Ricœur, P., 15 Rietveld, A.E.J., 98 Rights and principles, 24 Rousseau, J.-J., 32 Ruinanz, 128 Rule of law, 27, 45, 106 Rule-oriented ethics, 102 Russell, B.A.W., 9, 86, 92, 97 S Safranski, R., 101 Sartre, J.-P., 14, 60 Savigny, F.C. von, 46 Schein, E.H., 87 Scherer, A.G., 24, 27–29, 98, 102 Schleiermacher, F., 11 Schmitt, C., 10, 59, 86, 98 Scholten, P., 43 Schreiner, A.T.M., 62, 84 Science, 7–13, 85, 86, 97, 99, 103–106, 117, 121 Scientific concept, 99, 104 Scientist, 7, 8, 30, 53, 62, 106 Sein-zum-Tode, 6, 121 Self-alienation, 1 Self-binding, 2, 4, 69 Self-determination, 2, 68, 71 Self-regulation, 2–5, 26, 27, 29, 31–34, 67–77, 81, 82, 87, 90, 92, 98–102, 106, 107, 125, 126 Separate realms view, 83 Shareholder, 44, 48, 75, 76, 99 Sloterdijk, P., 13, 16 Sociological jurisprudence, 83 Soft law, 2, 21, 27–29 Sovereignty, 10, 77, 86, 107, 125 Specters, 127 Spinoza, B. de, 1 Spirit of revenge, 92 Staal, F., 84 Stakeholder, 3, 19, 23, 28, 44, 47, 49, 101 Stakeholder theory, 109, 127, 128 Standard view, 20–28 State, 4, 5, 10, 15, 25, 26, 30, 31, 33, 43, 46, 53, 54, 61, 62, 69, 77, 82, 86, 87, 89, 91–93, 97–99, 101, 106, 107, 116, 125, 126 Subject, 2, 5, 6, 9, 11, 14, 28, 34, 35, 42, 45, 56, 70, 76, 83, 97, 98, 103, 104, 106, 108, 109, 115, 116, 124–126

Index Subjectum, 1 Subsidiarity, 28 Substitute self-regulation, 70 Subsumption, 36, 113 Subversion, 103 System of norms, 2 System of rules, 2, 83 Systemworld, 90, 92 T Technique, 15, 31, 34, 69, 88, 101 Technology, 6, 8, 114, 119–121, 127 Teubner, G., 9, 42 Theory of justice, 35 There-being, 6, 121 Thing-in-itself, 7 Thoreau, H.D., 98 Tillich, P.J., 8, 43, 49 Totality, 6, 7, 109, 127 Transcendental philosophy, 8 Transformation, 2, 9, 27, 53, 73, 84, 87, 88, 90–93, 107, 126 Transformer function, 27 Transhuman, 6, 120, 121 Transplantation, 42, 62 Transportation, 9 Trash, 6, 120, 121 Trash destroyer, 121 Treviño, L.K., 20, 22, 24, 33 Truth, 7, 9, 16, 84, 85 Tuin, I. van der, 99, 105 U Understanding, 3, 6, 7, 10–12, 19, 26, 91, 99, 104, 108, 121, 126 Unger, R.M., 32–34, 59, 86, 124 United Nations, 29, 54 Unlawful act, 55–57 Utilitarianism, 83, 102, 109, 127 V Value, 1, 2, 14, 22, 27, 53, 55, 58, 59, 61, 77, 84, 88, 90, 92, 93, 124–126, 128 Velasquez, M.G., 20, 21, 23–25, 68, 106 Vereenigde Oostindische Compagnie (VOC), 45 Verstehen, 10 Violation, 1, 100 Violence, 4, 10, 69, 77, 82, 86, 106, 107, 120–121, 125 Virtue, 3, 19, 24, 33, 91, 102, 105, 108, 127

Index

153

VNO-NCW, 4, 67, 72 Vollenhoven, C. van, 53 Voluntary, 2, 26–29, 31, 81, 88, 107

Whatness, 83 Wildavsky, A., 68 World Bank, 54, 71

W Wagner, R., 49 Weber, M.C.E., 82

Z Ziekenhuis Afval Verwerkingsinstallatie Nederland (ZAVIN), 116