Due Diligence Regulation and Sustainability Governance in Value Chains: Lessons From the South African Wine Sector

Abstract

A recent raft of due diligence regulation (DDR) addressing social and environmental conditions in global value chains (GVCs) has spread across the UK and Europe. An emerging literature on DDR highlights the politics of its formation. Yet, we know little about how existing sustainability governance along GVCs interacts with DDR or the wider structural context in which DDR is implemented. Empirically, we examine European DDR relevant to the South African wine sector before analyzing the sustainability requirements set by the state monopoly wine buyer in Sweden to assess the likely future impacts of DDR. We ask: How do existing sustainability governance initiatives shape the intended effects of due diligence in the South African wine value chain? We find that DDR tackles the symptoms as opposed to the root cause of predatory purchasing practices as a key impediment to improving sustainability outcomes. Finally, we suggest how to address these shortcomings.