Claves del derecho de redes empresariales. AAVV
whose implementation cannot be enforced by legal sanctions.44
On the other hand, intra-corporate network codes are merely non-state private ordering, but in fact they are the governing law of the land with a high degree of binding force and effective sanctions. Private law doctrine still contests vehemently their genuine legal character, since it insists upon the state deduction of normative validity claims and does not recognize private ordering as law. And it is only gradually that economically and sociologically inspired concepts of law emerge, which assign legal character to the normative orders of private transnational actors — under particular circumstances.45 Intra-company and inter-company codes are directly binding for the actors involved, and they are equipped with effective sanctions, which are executed by newly created compliance departments.
In this way intra-corporate and inter-corporate organizational law seals itself off from the state law. In direct opposition to the usual norm-hierarchical relation between state and private law, public codes do not work as the constitutional basis for the authorization of the private codes. They produce their own validity from the linkage of primary and secondary norms in the realm of private ordering. They constitute a closed non-state system of legal validity, which is itself structured hierarchically. As already mentioned above, the top level encompasses the general principles of the corporate constitution, the middle level regulates enforcement and monitoring, the lowest level includes concrete rules of conduct. They thus generate their authorizing foundation themselves by their own constitutive rules. And intra-company rules, which regulate conduct according to the legal code, are reviewed themselves according to the constitutional code.
2. Hypercycle and Ultracycle
Inversion of hierarchy does still not go far enough. While there is a clear factual and normative primacy of the private over the public codes, the primacy is of no hierarchical nature. Rather more appropriate is the exclusion of the public by the private. State norms are not subordinated to private norms, rather they are banished from the interior of norm setting into the corporate environment. With this, the notion of a unitary legal space of state and private rules becomes obsolete. Instead, two independent legal spaces develop, an autonomous, privately ordered, coercive inner law of corporations and a state regulated ensemble of normative recommendations of conduct.
While it seems obvious that they form two mutually closed legal spaces it is not easy to determine what constitutes their closure. In any case, it is not the operative closure of social systems in the strict sense that separates them. Their closure is not based on the difference between their operations, as both code-orders are processed by the same type of operations — legal acts. Rather, it is a mutual structural closure that arises from two differences. One is the strict limitation of their space of validity: private codes claim validity for the members of the transnational corporations, public codes claim validity for the contracting states. The other is their different quality, as binding norm, on the one hand, and as mere normative recommendation, on the other. In terms of systems theory: The inner differentiation of the global legal system arises not through the emergence of a new kind of legal operations which would trigger an operative closure between the newly created subsystems. Rather the validity symbol is transferred in such a way that it creates boundaries between different legal orders. It brings about the structural closure by defining boundaries between different spaces of validity. Traditionally, the validity spaces are defined by territorial boundaries as in nation states, region or cities, in the transnational context they are of a issue-specific, functional or jurisdictional kind. Hence, one has to distinguish clearly between different forms of closure, operative and structural, which consequently also result in different ways how legal orders open up to each other. In this way, the private and public codes constitute two mutually closed legal orders, between which no transfer of validity takes place, but which influence each other in different ways.
As I said at the beginning, in both legal spaces extensive normative networks have developed between different organizations, which then allows to understand the entire configuration as the relation of two different, mutually closed normative networks. The interrelation of these two closed code-networks certainly does not match the traditional relationship between private and public corporate constitutional norms. Often, it is therefore attempted to conceive the relationship itself as a single large network or even a network of networks, as a metanetwork between state and private actors.46 This is not necessarily mistaken, but relevant differences disappear. The relation can be captured in more detail in the difference between “hypercycle” and “ultracycle”.47 A hypercycle emerges when communicative operations within a closed network form cycles that are interlinked in a circular way. In contrast, an ultracycle emerges when a cycle of mutual perturbations is developed between closed networks. Within private codes of corporate networks, interlinkages are of a hypercyclical nature; between the cyclical legal operations, which connect to each other within different formal organizations (i.e., TNCs, their suppliers, and their sales organizations), interorganizational direct connections are developed. The validity symbols of private ordering are directly transferred via intraorganizational law and interorganizational contracts. Within this network of private legal operations, the private norms have a direct binding effect on participants and in instances of norm infringements, sanctions are ordered. In this way, a closed scope of private ordering emerges through the hypercyclical linkage of TNCs and other commercial enterprises.
In an entirely different way, these mutually interlinked private codes are connected to public codes. For this kind of connection, unlike the model of the hypercycle, the ultracycle model is appropriate. Although public codes define certain politically desired obligations and establish the boundary between permitted and banned activities, they are only informal recommendations and mere appeals for certain conduct. They are also valid law, yet in a paradoxical form; they are law in force but without legal sanctions. This means that private codes, which present themselves as self-referentially closed validity circles, are not only entirely independent from public codes when it comes to their validity, but also that public codes cannot even connect normatively to private standardizations. They do not participate in the normative unity of the intra-corporate and intercorporate codes. Only from the outside, they can appeal, suggest, motivate, urge, or even compel, but they cannot command or suspend validity. They are only external irritations for the inner-validity cycle of private codes. The codes of the United Nations, the ILO, the OECD, and the European Union are mere constitutional impulses, which—certainly with great influence—international organizations send toward TNCs. Whether they indeed coagulate there into binding constitutional norms is not decided by the institutions of the state world but in the inner processes of private organizations.
3. Learning Pressures: Internal Self-limitations due to External Constraints
If under certain circumstances, interrelations between the network codes emerge, then an ultracycle arises, a perturbation cycle between the public and private codes. In the usual descriptions of how private and public soft-law regimes are interrelated, the fundamental difference is concealed which exists between the hypercycle of private codes and the ultracycle of public and private codes. This should, however, not tempt one to dismiss ultracycles as mere political window dressing, as mere white noise of the state world, unable to affect the intra-company codices at all.48
What matters are learning pressures, i.e. internal changes induced by external constraints. Both elements have to be present in order to enable public and private codes to act in combination: an internal change of cognitive and normative structures and external pressure directed towards it. Otherwise ultracyclical linkages do not emerge, and public codes remain external impulses with no effects. Here, the above-mentioned special quality of mutual closure becomes apparent which makes possible a special quality of mutual opening. A transfer of validity between both is out of the question, instead learning pressures, that is other mechanisms of mutual opening, are developed.
At this point, one of the most significant changes in the legal structure becomes visible, which occurs in the transition to world society. Niklas Luhmann described this change in the following way:
“at the level of the consolidating world society, norms (in the form of values, regulations, purposes) do not anymore steer the pre-selection of the cognitive, rather vice versa the problem of adaptation