Review Governance Against Third-Party Auditor Extortion in Responsible Sourcing Certification Systems

Responsible sourcing certification is a sociotechnical governance system that links brands, suppliers, third-party auditors, and review mechanisms. This study examines how this system is distorted when a corrupt auditor extorts genuinely compliant suppliers. Unlike collusion, where noncompliant suppliers bribe auditors to enter the sourcing system, extortion threatens genuinely compliant suppliers with erroneous rejection unless they pay. We develop a game-theoretic model in which the brand chooses a certification standard and a purchase price, while an extorted supplier either pays or enters review. Review success depends jointly on procedural effectiveness and factual verifiability. The analysis identifies four contract regimes: partial extortion, premium payment, standard contraction, and a no-extortion benchmark. Review intensity has a nonmonotonic governance effect because it both reduces erroneous rejection after refusal and compresses the corrupt auditor’s extortable surplus. We further show that eliminating observable extortion does not remove distortion but relocates it among standard exclusion, erroneous review rejection, and monetary burden. Extensions on endogenous review governance, review cost, and collusion–extortion coexistence show that certification systems may rely on incomplete review governance rather than fully restore the no-extortion benchmark.