Proceedings of the 14th International Academic Conference, Malta

PREPARE FOR CHANGE: THE IMPACT OF THE GERMAN INK- AND MINERAL OIL ORDINANCE STILL TO COME. WHAT’S THE CONTRIBUTION OF THE NEW INSTITUTIONAL ECONOMICS TO AVOID LIABILITY AND MARKET FAILURE WITHIN THE PAPER-BASED PACKAGING SUPPLY CHAIN?

MATTHIAS VON JUTERZENKA, THOMAS HEUPEL

Abstract:

Igor Ansoff described the important role and function that detecting and analysing weak signals plays in strategic planning. Weak signals are based on the assumption that every event or disaster caused by man is at times to be foreseen and unsurprising. Under the auspices of discrete discontinuities in economic, political, technical and social affair, they prior take notice before they come into existence as a whole. Solid board and corrugated board converters that print and process food packaging operate their businesses within a complex and strict set of regulations and guidelines, set in force by both government agencies and industry associations. These rules ensure that packaging does not negatively impact the products contained within. For ecological and economical purposes, paper-based packaging-material is largely produced using recycled paper. Swiss studies have shown that cardboard boxes made from recycled material can contain significant portions of mineral oil. Animal studies have shown that mineral oil mixtures with low viscosity are stored in the body and can lead to accumulations and damage in the liver, heart valves and lymph nodes. Currently there are no studies on the effects on humans, but it cannot be ruled out that this fraction contains carcinogenic compounds. The increase in the number of food-packaging migration alerts in recent times has been highlighted by consumer protection organisation and the media and the German legislator has decided to act with a national approach towards stringent consumer protection. This paper aims to give an overview of the current status of the German Ink and Mineral Oil Ordinance still to come (law bill) in relation to recent and future risk management within the paper-based packaging supply chain. A possible European spill over will be highlighted. To achieve objectives in strategic networks a cooperative service provision along the supply chain must be formed and agreed upon co-operation between the parties. The design and operation of networks based on trust, transparency, openness and intensive communication but all actors are subjected towards information asymmetries and behavioural uncertainties. The theoretical goal of this paper is to narrow the gap between existing knowledge about the regulation still to come and the consistent use of established economic theories. The paper shows the contribution of Weak Signals and the New Institutional Economics in order to avoid opportunistic behaviour in the paper-based packaging supply chain. The paper aims to give recommendations for action towards adjusted and suitable behaviour.

Keywords: Weak signals, Packaging, German Ink Ordinance, Boiling Frog Syndrome, Information Asymmetries, Behavioural Uncertainties, Principal-Agent Problems, New Institutional Economics.

PDF: Download