This is Part One of a blog for the COMPAS Coronavirus and Mobility Forum.
On 25 March 2020, I attended a webinar on “Shipping and the Coronavirus—Markets and Legal Impacts” organized by Seatrade Maritime News. Intended for logistics professionals, the discussion juggled between assessments of the upheaval to global shipping resulting from China’s pandemic response and forecasting of interruptions expected to follow from the spread of Coronavirus to other regions. The speakers gave special attention to the possibility for shipping firms to activate force majeure, an obscure legal doctrine that specifies the conditions under which unforeseeable obstacles and events can remove contractual obligations.
Unsurprisingly, the presentations emphasised the need to keep things moving above issues of health or life—a sentiment shared across a range of economic sectors and organisations. These industry homilies did not probe the social effects of COVID-19, offer allegories of the nonhuman, or attempt to discern “what the virus is trying to tell us.” Rather, they were sophisticated, data-driven attempts to minimise interruptions to business-as-usual.
Coronavirus, from this perspective, is external to logistics industries. Considering how force majeure establishes this externality offers insights into the transformations of capital underway in the moment.
Supply chain chaos
Much commentary has focused on how just-in-time production networks, already stretched by the imperative to remain lean and agile, have faltered with the virus’s spread. The pandemic has also accentuated the ways in which logistics industries are essential for capital circulation, exposing many workers, including seafarers stuck on vessels that cannot port and those active in gig economies, to vectors of infection. The failure of healthcare manufacturing supply chains has been one of the most scandalous features of the unfolding situation. Doubtless, there are also logistical challenges to come. The question of how to distribute equitably a vaccine, if it becomes available, requires grappling with a range of logistical factors, including procurement financing, stock allocation, distribution monitoring, and database maintenance.
The declaration of the National People’s Congress of China that the pandemic constitutes a force majeure event has attracted concern from trading partners. With the spread of lockdowns and worker mobilisations in so-called essential industries, firms around the world have begun to utilise force majeure clauses to manage supply chain disruptions. Marshalling this doctrine insulates capital from supply chain chaos, ensuring neither smooth network governance nor worker protection but rather passing the problem of contractual default on to the next actor in the chain. The ricochet effects are far from linear.
Mobile workers are among those most susceptible to these chain reactions. Especially in situations of bonded or forced labour where workers are in debt to employers for recruitment or subject to other forms of coercion, the knock-on effects of a force majeure claim can have devastating effects, leaving people lacking information about health and safety, unwelcome to return “home” or huddling in shelters where the risk of infection is high. If force majeure is capital’s means of externalising disruptions stemming from the pandemic, mobile labour provides a last resort for absorption of these shocks.
Transformations of capital
The point is not to make a law lesson or divert the question of logistical power into familiar juridical and sovereign schemes. Rather, I seek to interrogate how force majeure allows capital to fulfil its logistical need to render the pandemic as an outside interruption. Clearly, capital can speculate on the occurrence of pandemics, as evident through financial mechanisms such as the World Bank’s Pandemic Emergency Funding Facility. However, unlike the 2007-08 downturn, which sprang from dynamics internal to the financial system, the COVID-19 economic crisis results from capital’s inability to reproduce itself while lockdowns withdraw labour, a situation less pronounced in previous epidemics such as SARS or H1N1.
If, as Bue Rübner Hansen writes, this situation means that both capital and workers face insolvency, only capital has recourse to force majeure. This legal externalisation of logistical nightmares is doubtless a stopgap measure. Capital has a systematic need to extract value from its multiple outsides. Sure, force majeure cushions capital from shocks, but while ever the Coronavirus upheaval continues, circuits of capital valorisation and accumulation, which depend on the movement of people and things, will face blockages. Force majeure also provides a means of deferral—a way of buying time for reorientation, prospecting and preparing the ground for future extraction.
Contrasting the doctrine of unforeseeability that animates force majeure with the knowledge of those who maintain that the outbreak was anticipatable, as I do in the second part of this essay, offers a means of opening up and analysing operations of capital in the moment. If capital can neither control nor extract value from the situation unleashed by the virus, it is likely to react to the insolvency and uncertainty the pandemic generates by incessant restructuring, the shape of which is still to come.
Brett Neilson is Professor at the Institute for Culture and Society at Western Sydney University.