The Transmission and Manifestation of Compliance Obligations in Global Value Chains under EU Sustainability Governance. Case Study of a Korean Tier 1 Automotive Supplier

Sammanfattning

This study examines how compliance obligations are transmitted and manifested within a globalvalue chain, from the perspective of a Korean tier 1 automotive supplier through theirexperiences navigating EU sustainability regulations. The study utilizes World System Theory,the cascading model, and Hard and Soft Governance as a collective theoretical framework toanalyze themes relevant to its purpose and aim. The primary empirical data were collectedthrough semi-structured interviews with employees at the tier 1 Korean automotive supplierunder study. The empirical findings demonstrated how the compliance obligations manifest intofinancial burdens and supply chain disruption risk for the subject company, with an observationthat the compliance pressure intensity varies by Original Equipment Manufacturer actor (OEMcustomer). Furthermore, inequality patterns are revealed through the concentration ofcompliance constraints at the upstream, lower-tiered suppliers, combined with the unintendedconsequences of the EU Deforestation Regulation, resulting in a category segmentation ofrubber. Collectively, the empirical findings contribute to expanding the practical understandingof compliance obligation manifestation in the global value chains under the EU sustainabilityregulations, and with insights regarding regulatory implications for small suppliers andindustry-specific impact.