PRESS RELEASE: A DECADE OF RESEARCH FINDS SYSTEMIC FAILURES IN LEADING GLOBAL CORPORATE HUMAN RIGHTS INITIATIVES

Report by MSI Integrity finds prominent corporate oversight initiatives fail to effectively detect and remedy abuses; calls for more regulation of corporations.

Berkeley, California, July 16, 2020 — The Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity), a nonprofit incubated at Harvard Law School’s International Human Rights Clinic, today released a report concluding that global efforts by some of the world’s largest multinational corporations, governments, and civil society organizations have failed in their goal of establishing effective mechanisms to protect against human rights abuses by corporations.

The report, Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance, examines 40 multi-stakeholder initiatives (MSIs) that collectively have more than 10,000 corporate members, including 13 of the 20 largest companies in the world by revenue (see “MSI” definition here).

MSIs emerged in the 1990s as a promising experimental response to exposés about corporate abuse. In the absence of rigorous government regulation of transnational corporations, civil society organizations began stepping into this regulatory void by collaborating with industry representatives to jointly create voluntary codes of conduct and oversight mechanisms. By the 2000s, MSIs had become a “gold standard” in voluntary regulation, and had established standards for almost every major global industry.

Reflecting on a decade of research and analysis in the field, the report concludes that this grand experiment has failed. Voluntary regulation, even when it involves civil society organizations, is insufficient for detecting corporate human rights abuses, holding corporations to account for harm, or providing access to remedy. While MSIs can play important roles in building trust and generating dialogue, they are not a substitute for public regulation. Effective government regulation and enforcement is needed to supplement voluntary initiatives at local, national, and international levels.

The specific failures of initiatives to detect abuses or uphold rights—e.g., tea having been certified by Fairtrade International and Rainforest Alliance despite workers being paid as little as US $0.14 a day, or cocoa being certified by UTZ that was found to come from farms contributing to deforestation or using child labor—are often reported as due to flaws in individual initiatives. However, the analysis by MSI Integrity demonstrates through six key cross-cutting insights that these are symptoms of wider structural issues present across MSIs.

“The synthesis of research and analysis in this report is critically important,” said Ambassador (ret.) Luis C.deBaca, Senior Fellow at Yale University, “It provides insight into a global governance framework of voluntary regulation that has been in many cases blindly accepted, and will trigger a serious conversation that is long overdue.”

Some of the key insights in the report include: (1) many MSIs set weak or narrow standards that overlook the root causes of abuses; (2) MSIs employ inadequate mechanisms to detect abuses and uphold their standards; and (3) MSIs do not offer access to effective remedy.

Almost a third of the 40 MSIs examined in the study did not have any grievance mechanisms for workers or communities to directly report abuses or resolve complaints. Of those that did, nearly all failed to meet the internationally recognized criteria for effective access to remedy established by the United Nations Guiding Principles on Business and Human Rights, such as being transparent, accessible and equitable.

The report identifies several lessons to be learned for future human rights interventions. These include that rights holders—the workers, communities, and individuals affected by a business— need to be at the center of the solutions that aim to improve their lives and livelihoods, rather than the top-down approaches used by MSIs. The report finds that fewer than 1 in 5 initiatives include rights holders in their governance, and only 5 of the 20 oldest MSIs have conducted any direct measurement of their impacts on rights holders within the last five years.

“As long as company decisions continue to be made by managers or board members who are divorced from experiences on the ground, and who are legally obligated to prioritize the interests and profits of shareholders, businesses will continue to run the unacceptable risk of making decisions that harm people and the planet,” said Amelia Evans, the Executive Director of MSI Integrity, “It is time to reimagine the corporate structure, and to demand business models that center workers and communities in their ownership and governance.”

The report draws on a decade of research, learning, and insights that MSI Integrity has obtained since it began researching in 2010. This includes interviews with hundreds of stakeholders in the Global South and Global North, and analyzing more than 1,500 pages of MSI procedures and policies.

According to Philip Alston, Chair of NYU’s Center for Human Rights and Global Justice and former United Nations Special Rapporteur on Extreme Poverty and Human Rights, “MSIs are just one example of how the private sector has increasingly become responsible for activities traditionally performed by government. However, businesses are not motivated, managed, empowered, or incentivized to perform many of the essential public functions that are being systematically outsourced to them. This trend represents an abdication of responsibility by governments and international organizations.”

The report and related materials are available from www.msi-integrity.org/not-fit-for-purpose

Interview Requests: Mollie Fullington
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Solidarity with the Protests Against Racial Injustice

We must hold corporations accountable for their roles in structural racism and racial violence.

MSI Integrity condemns the police murders of George Floyd, Breonna Taylor, Ahmaud Arbery, Tony McDade, David McAtee, Manuel Ellis, Sean Monterrosa, and the ongoing police militarism, white racial violence, and structural racism in the United States. We stand in solidarity with protestors taking to the streets to fight for racial justice, at a time when COVID-19’s disproportionally lethal impact on Black communities has further exposed entrenched racial inequality.

As people who are working to ensure the private sector respects and protects human rights and the environment—to ensure that corporations are held accountable for any human rights abuses they commit, and provide remediation for any harm caused—we feel it is important to shine a light on the role of the private sector in structural racism and police violence. The public-private partnerships that have militarized the police; the role of technology companies in enabling data sharing and surveillance by state security forces; corporate media’s obscuring of Black suffering; the discrimination and inequity that persist within boardrooms and wage rates;  the predatory housing practices that deepen systemic inequality in Black communities; and the unpaid prison labor that benefits corporations while negatively impacting Black people who are disproportionately represented in prison populations. These are just a few ways that corporate conduct perpetuates racial injustices. We must hold accountable those corporations that continue these harmful practices, many of which are issuing statements of support that fail to acknowledge and address their own roles in abuse.

Law enforcement accountability is a start, but it is not enough. Deep structural inequity necessitates deep structural transformation across societal, legal, economic, and political structures. As an organization, we are soon to begin focusing on a radical reimagining of the corporation, the building block of the economy, in order to achieve transformational change. The nation’s most recent uprisings in response to police violence remind us of the importance of centering racial justice in this work.

How exactly will we do that? We do not know. That requires further learning, listening, analysis, and reflection. We need to work in solidarity and across movements. We need to listen to and employ more Black voices. We need to ask why so few corporations have been held accountable for their role in perpetuating structural racism, and how the corporate accountability or business and human rights community can change that. We will not have answers immediately, but we are committed to developing them. As a starting point, we are adjusting our schedules to enable staff and summer fellows the time to analyze the deep-rooted connections between corporate conduct and racial injustice, as well as to participate in protests or engage in relevant actions.

This is a crucial moment to drive action. The business and human rights community must stand in solidarity with movements for racial justice and find ways to tackle this issue, while centering the perspectives and experiences of those who are most affected.

Panel Discussion on the Past and Future of MSIs at the Launch of the MSI Evaluation Tool

Last month, MSI Integrity, the John Hopkins School of Advanced International Studies (SAIS), the International Human Rights Clinic at Harvard Law School, and Miller & Chevalier hosted the panel discussion, “MSIs Then and Now: What’s at Stake?” (video link).

The discussion was held at SAIS in Washington, D.C. and brought together MSI stakeholders, academics, and business and human rights experts to reflect on the role MSIs have played in the field of business and human rights over the past 20 years. The event also introduced the MSI Evaluation Tool, a comprehensive framework for analyzing MSI design developed by MSI Integrity and the International Human Rights Clinic at Harvard Law School.

Following introductions from Nina Gardner from Johns Hopkins SAIS and Ben Collins from MSI Integrity, Arvind Ganesan from Human Rights Watch moderated a panel of five experts: Brian Finnegan from AFL-CIO, Bennett Freeman from the Global Network Initiative and Global Witness, Virginia Haufler from the University of Maryland, Amol Mehra from the International Corporate Accountability Roundtable, and Meg Roggensack from Georgetown Law School. We highly recommend watching the video of the panel discussion (1:26) and have included some of the comments and reflections from the discussion below.

The discussion began with reflections on the emergence of individual MSIs and the MSI field as a whole, including:

  • The observation that MSIs have become “a default position when there is a problem,” especially in situations where there is weak governance or where MSIs are perceived as less intrusive or more inclusive than government processes;
  • Reflections on the intentions of founding MSI stakeholders, including the view that some MSIs were never created to be long-lasting or permanent institutions but were instead intended to be transitional entities to address issues until improved regulation came along; and
  • Lingering questions about the MSI field such as how MSIs relate to each other, whether they compete, and whether they drive standards up or down.

Some panelists shared critical reflections on the design, effectiveness, and governance of MSIs such as:

  • Critiques that MSIs have fallen short in benefitting and involving the populations they were founded to protect, including that MSIs have failed to protect human rights or provide access to remedy for rights violations at work, have failed to include voices from labor, and can impose disproportionate burdens on under-resourced civil society participants;
  • Observations that there has been inconsistent and inadequate engagement by key actors in MSIs, including companies that have not taken their commitments to MSI standards seriously enough and NGOs that have not used MSIs to their full potential;
  • Analysis of the enormous resource imbalances between different MSI participants, since the cost of participation in an MSI relative to available resources can be much higher for an NGO than a company; and
  • Distinctions between MSIs that evolve and those that fail to do so, for many MSIs have changed to address stakeholder criticism and political or industry shifts while others have not.

The discussion also included the following perspectives that MSIs are playing a key role in addressing governance gaps:

  • The view that MSIs can provide important context-specific responses to governance gaps, such as in the context of the security industry where governments have failed to address human rights risks;
  • A glass half-full perspective on MSIs, which acknowledges that while they can serve a vital role in some contexts – even if just as a forum for discussion – it may be unreasonable for the business and human rights community to think of MSIs as a silver bullet fully capable of setting standards, monitoring compliance, and also providing remedy or redress functions; and
  • A perspective that MSIs are more relevant than ever given the current political climate in the US and for US companies, and that while they remain works in progress, they have made positive contributions to the cause of corporate accountability and human rights.

Looking ahead, panelists shared perspectives on where the MSI field could go, including:

  • A note that there may be new opportunities for MSIs to improve and lead, as signaled by a letter from the CEO of BlackRock, the world’s largest asset manager, calling for companies to make a positive contribution to society, which could be an opening for improving MSIs or establishing new ones;
  • Reflections that worker-driven social responsibility initiatives might be valuable models for creating binding, enforceable human rights protections, and that “jobbers agreements” negotiated in the garment industry during the 20th century could also inform strengthened standard-setting and enforcement;
  • Critical questions MSIs and their stakeholder should grapple with, such as power imbalances between MSI stakeholders, how MSIs fit into the increasingly crowded standard-setting space, and who often gets left out of the MSI conversation – including community members, workers, and some civil society groups;
  • Identification of key challenges MSIs face, such as ethical recruitment and other issues that cut across countries and sectors, the reluctance of company participants to give up control on business and human rights issues, and emerging issues such as artificial intelligence and privacy that might prompt the creation of new MSIs in the future; and
  • The importance of trust for addressing complex governance challenges, whether through MSIs or other coalitions such as those working to end labor rights violations in Uzbekistan and Turkmenistan’s cotton industries.

MSI Integrity is grateful for our panelists, sponsors, and hosts, without whom the event would not have been possible. We look forward to exploring some of the themes addressed by panelists through future discussions, debates, and workshops later in 2018 and in coming years. We also invite feedback and questions on the MSI Evaluation Tool from MSIs, their stakeholders, and others interested in learning more about its potential uses or with feedback on how it could be further improved. To submit comments or reflections on this panel discussion or the MSI Evaluation Tool, please contact us at info@msi-integrity.org.

Release of MSI Evaluation Tool and Essential Elements of MSI Design

Today, MSI Integrity is proud to release the MSI Evaluation Tool in partnership with the International Human Rights Clinic (IHRC) at Harvard Law School. Alongside the Tool, MSI Integrity is also releasing a summary companion document, The Essential Elements of MSI Design.

The MSI Evaluation Tool was developed collaboratively by MSI Integrity and the IHRC through a five-year iterative process of extensive research, practical pilot-testing, and global consultation with the public and experts on MSIs. It provides a framework to evaluate multi-stakeholder initiatives (MSIs) and the effectiveness of their institutional design, structure, and operational procedures.

The Essential Elements of MSI Design is a collated summary of the most essential attributes for global standard-setting MSIs identified in the MSI Evaluation Tool, and is intended to enable a quick, desk-based analysis of an initiative’s broad strengths and weaknesses.

The MSI Evaluation Tool

MSIs have become one of the most popular global instruments for addressing business and human rights issues, yet there is little research or understanding into whether these initiatives have been successful or effective as rights protection tools. MSI Integrity and the IHRC sought to fill this knowledge gap by developing a tool that can be used by both external stakeholders and MSIs themselves to evaluate the effectiveness of MSIs. The MSI Evaluation Tool sets out the critical considerations and establishes a methodology for those seeking to thoroughly evaluate an MSI. The Tool and its evaluation methodology draw together current research and practical understandings about MSI structures and processes, recognizing that MSI design features — such as good governance and robust accountability mechanisms — influence an initiative’s effectiveness and potential to achieve positive impacts. By systematically and comprehensively examining an MSI’s institutional framework, the Tool enables individuals, organizations, and MSIs themselves to better understand and evaluate the capacity of an MSI to effectively address the issues that prompted its creation.

The Tool is divided into seven sections, which reflect the seven core areas of MSI design that have been linked to effectiveness:

  1. Scope and Mandate
  2. Standards
  3. Internal Governance
  4. Implementation
  5. Development and Review of the MSI
  6. Affected Community Involvement
  7. Transparency and Accessibility

Each core area is made up of a comprehensive set of indicators related to the structures and processes that influence an MSI’s effectiveness. Users of the Tool can assess if the initiative includes these indicators by following a five-step evaluation methodology to consider whether the structures and frameworks of an initiative have been designed in a way that is capable of leading to positive outcomes and impacts.

In 2013, MSI Integrity conducted a global consultation on a draft of the Tool. More than 100 individuals and organizations provided written comments or participated in one of ten regional meetings in Africa, Asia, Europe, Oceania, North America, and South America. The final version released today builds off the Draft MSI Evaluation Tool (2013) by incorporating feedback related to indicator criteria and clarifying assessment procedures. A summary of each comment received during the 2013 Global Consultation process and the resulting modifications is available here.

The Essential Elements of MSI Design

The MSI Evaluation Tool is a comprehensive framework for evaluating MSIs and the effectiveness of their institutional design, structure, and operational procedures. However, conducting a rigorous and comprehensive evaluation of an initiative is resource-intensive. For individuals or organizations with limited resources, or an interest in developing a basic understanding of the strengths and weaknesses of a given MSI, The Essential Elements of MSI Design is intended as a starting point for analysis and discussion.

The Essential Elements of MSI Design contains the most critical indicators of MSI effectiveness identified in the MSI Evaluation Tool, referred to as the “Essential Elements.” Although it does not include other indicators categorized as “Good” or “Innovative” practice for MSIs (which are included in the MSI Evaluation Tool), it provides a summary that could help guide a future evaluation of an MSI’s design and could inform the development of new MSIs or revisions to existing ones.

Broader Applications and Future Updates

The MSI Evaluation Tool was developed primarily to evaluate MSIs that were formed in response to human rights concerns and which have reacted to these problems by setting or enforcing standards for member companies and/or governments. However, with some common sense adaptation and modification, the Tool and the Essential Elements of MSI Design can be used for a variety of different purposes and applied beyond standard-setting MSIs with a focus on human rights. For example, they could be used to evaluate MSIs that address environmental or governance issues, or initiatives that serve as collective action networks or learning forums rather than as standard-setting institutions. These documents can also be applied to other accountability or private governance approaches, such as industry codes of conduct or private certification schemes. We encourage such actors to contact MSI Integrity to discuss whether these tools are suitable for a given initiative and, if so, what modifications should be made.

As knowledge and research into MSI effectiveness deepens over time, we anticipate that the Tool will be updated and modified to reflect new understandings. We welcome all interested users of these documents to contact MSI Integrity to share their findings or to seek our input on how to best evaluate an initiative. We also welcome any suggestions, questions, or future applications of the Tool to improve it over time.

Download the MSI Evaluation Tool (2017) here.

Download the Essential Elements of MSI Design here.

Report: Workshop on Addressing Gaps in EITI Accountability and Grievance Mechanisms

Although the rules of the Extractive Industries Transparency Initiative (EITI) include safeguards to protect civil society’s meaningful participation in the initiative, in many EITI-implementing countries, natural resource governance activists continue to risk persecution, intimidation, and harassment for their EITI-related work, without recourse to trustworthy mechanisms to report these breaches.

The report published today, EITI Accountability and Grievance Mechanisms: Perspectives from Civil Society and Natural Resource Governance Advocates details discussions from an August 2016 workshop on accountability gaps at EITI that brought together leading human rights and accountability mechanism experts, civil society representatives from the EITI International Board, and natural resource governance advocates from EITI countries. While the workshop focused on risks facing civil society, participants intended for the discussion to serve as a starting point for a broader dialogue with other EITI constituents who share concerns about accountability.

At the workshop, civil society advocates with direct experience of implementing EITI in their respective countries identified gaps in EITI’s accountability mechanisms based on first-hand experience. Participants then discussed examples of accountability mechanisms used in other initiatives and institutions, including the International Finance Corporation Compliance Advisor/Ombudsman, the Roundtable on Sustainable Palm Oil complaints system, the Organisation for Economic Cooperation and Development complaints mechanism, the World Bank Inspection Panel, the Asian Development Bank Accountability Mechanism, and the Fair Labor Association Third Party Complaint Process.

The workshop report highlights subsequent discussions, which culminated in design sessions to develop proposals for how EITI could close accountability gaps. Over the course of the two-day workshop, participants reported that:

  • Threats to individuals and civic space are not being comprehensively detected by the EITI validation system, while the initiative lacks trusted processes for raising civic space-related complaints;
  • EITI Board committees, such as the Rapid Response Committee, are underutilized and largely unknown outside of the EITI Board, and are not seen as effective tools for addressing either time-sensitive breaches of the EITI Standard or threats to civil society;
  • Any new or reformed grievance or accountability mechanism should be designed to ensure that complainants are not exposed to further risk, while enabling and empowering stakeholders to raise concerns with EITI; and
  • Any new or reformed processes must draw on good practice and lessons learned from other initiatives, which are presented in summarized form in the report.

Notably, some participants favored modifying existing EITI processes such as the Rapid Response Committee and improving the validation process to address accountability gaps, while others in the group believed these processes, by themselves, could not be sufficient to address harms experienced by individuals. As a result of these workshop discussions, participants agreed upon three mutually-reinforcing proposals for improving EITI’s accountability mechanisms:

  • Prevention Mechanism – Establishing a system of national-level civil society monitors who report to a new Working Group on Civil Society Protection. The working group would proactively monitor the condition of civil society in EITI-implementing countries and respond to or provide feedback on in-country developments that threaten civic space and undermine the EITI Civil Society Protocol, which is part of the EITI Standard.
  • Reforming Existing Oversight and Outreach Mechanisms – Strengthening existing EITI bodies and processes with a focus on updating the member application and validation processes, as well as the Rapid Response Committee, to better address civil society-specific needs and provide civil society protections.
  • Remediation Mechanism – Developing a non-judicial complaints-filing process designed to address stakeholder grievances related to egregious breaches of the Civil Society Protocol such as rights violations resulting from natural resource governance advocacy.

The workshop was facilitated by Shape the Law, with assistance from MSI Integrity and financial support from the Open Society Foundations.

DOWNLOAD THE REPORT

 

The New Regulators? MSI Integrity and Duke Report on the Global Landscape of Standard-Setting MSIs

Today, MSI Integrity and the Duke Human Rights Center at the Kenan Institute for Ethics published a summary report on our new database of standard-setting multi-stakeholder initiatives (MSIs). In the report, The New Regulators? Assessing the Landscape of Multi-Stakeholder Initiatives, we analyze 45 MSIs that set voluntary standards for business and government conduct on a range of human rights and environmental issues.

The report and database are intended as introductory resources on MSIs for MSI participants, civil society organizations, community groups, companies, researchers, and the general public. With a few exceptions, most MSIs are not household names. Nevertheless, they have profound global reach. MSIs operate in over 170 countries on six continents, and set standards for over 9,000 companies with combined annual revenues of over $5.4 trillion. Moreover, MSIs are ambitious: they have been created to address some of the most intractable problems linked to the global economic system, ranging from child labor to deforestation and online privacy.

But while MSIs have gained prominence as a new category of regulatory institution, our preliminary findings suggest that many MSIs lack one or more of the basic institutional elements necessary to effectively set and enforce their own standards. This raises serious questions about whether MSIs are collectively up to the task of addressing the challenges they face.

As MSIs have only come into existence during the past few decades, the structure and impact of these “new regulators” remain poorly understood. We begin by looking at the growth and industry spread of these MSIs, finding that most were formed in the late-1990s and 2000s, with only a handful of new standard-setting MSIs launched since 2011. Most of these MSIs focus on setting standards for specific industries, with over 90% clustered in three sectors of the economy (consumer goods; agriculture, forestry, and fishing; and mining and energy).

Next, we assess how MSIs are governed and the extent to which they include different stakeholder groups. Our analysis reveals the troubling finding that most standard-setting MSIs fail to meaningfully engage the workers and communities that are most affected by MSI standards: Only 14% of the MSIs include affected populations in their main governing bodies, while only 49% of MSIs involve affected populations at all.

Lastly, we examine whether MSIs have the basic operational structures needed to set and enforce standards of conduct for their corporate and government members. These include systems to monitor members for compliance with standards, sanctioning mechanisms to address non-compliance, and complaints mechanisms to enable individuals or communities to report environmental or human rights abuses that violate initiative standards. Distressingly, 20% of initiatives lack any power to sanction non-compliant members, and 60% do not have an external complaints or grievance mechanism.

Because the MSI Database includes only limited information about each MSI and its institutional design, the report analyzes MSIs as they exist on paper, rather than as they operate in practice, so our findings are necessarily preliminary. For example, the database and report look at whether an MSI has a complaints mechanism, but not at whether the mechanism is well-designed, accessible, effective, or even implemented. Nevertheless, the report raises serious questions about what role MSIs serve if many of them lack the basic institutional elements necessary to be effective.

We hope that the report and database contribute to discussion and future research on the role of MSIs in addressing critical human rights, environmental, and governance challenges. We also look forward to feedback, suggestions, and other perspectives on the database and report findings and encourage interested stakeholders to contact us at info@msi-integrity.org.

MSI Database: A Response to Reflections from the Center for Business and Human Rights at the NYU Stern School of Business

In June, MSI Integrity and the Duke Human Rights Center at the Kenan Institute for Ethics, with pro bono support from the law firm Miller & Chevalier, launched the MSI Database, a searchable online resource for information about multi-stakeholder initiatives (MSIs). The database catalogues the design characteristics of 45 transnational standard-setting MSIs in the field of business and human rights, including whether initiatives offer an external complaints mechanism, require public reporting of member compliance with initiative standards, or have the ability to sanction members for non-compliance.

We created the database as a resource for MSI participants, researchers, and interested stakeholders, and remain very open to feedback on how it could be improved or expanded in the future. We were encouraged to see a thoughtful blog post on the database published by the Center for Business and Human Rights at the NYU Stern School of Business on July 5th. Given the Center’s deep experience engaging with MSI staff and other MSI stakeholders on human rights issues, we are encouraged that they have taken the time to share feedback. We would be excited to work with interested and engaged stakeholders like the Center to further develop the database in the future.

The blog post describes the database as a “commendable pursuit that brings greater visibility to an oversight model that is increasingly common but poorly understood,” and raises a number of important points. We discuss some of these below and note where the project’s FAQ page and methodology document address a particular issue in greater detail.

For one, the post from Stern identifies ways in which the database’s visual presentation could potentially be misinterpreted – such as if a user inferred that the more design features an MSI exhibits, the greater its efficacy, or that the presence of each of the seven design features is equally important. We agree that the seven design features included in the database are unlikely to be equally important. And as we note in the FAQ and methodology, the database does not evaluate the effectiveness of MSIs, nor is it intended to encourage a check-list approach to design features. That said, our hypothesis is that the design features catalogued are necessary but hardly sufficient for an MSI to be effective. The significance of a particular MSI design feature for an MSI’s efficacy is ultimately determined by a range of factors, including whether and how the features are implemented – something the database does not analyze. As such, we do not assign weighted scores to different design features in part because their importance for an initiative’s effectiveness likely varies.

The blog post goes on to observe that the database categories are presented in a simplified format. For this initial release, we chose these categories due to capacity and data availability constraints. But we are very interested in additional feedback from researchers, MSIs, and MSI stakeholders on how to potentially refine and/or expand the database to better support MSI researchers and practitioners in the future.

The post’s overarching insight that “only a handful of MSIs have the necessary organizational design and mechanisms in place to define and enforce standards” foreshadows one of the conclusions of our forthcoming report assessing our own findings from the database: The New Regulators? Assessing the Landscape of Multi-Stakeholder Initiatives. In the report, we discuss the troubling finding that many MSIs lack the mechanisms needed to successfully uphold their own standards – such as external complaints mechanisms, robust reporting and sanctioning processes, and tools to include the voices of the communities a particular MSI intends to benefit or protect.

In spite of the constraints discussed above and others mentioned in the FAQ, we hope the database provides a useful contribution, particularly as a resource for further inquiry and debate on MSIs. As we discuss in our forthcoming report, we think that the database also points to a need for serious, critical reflection on how researchers, MSI participants, and other stakeholders conceptualize and engage with MSIs.

We welcome additional public reflections such as the Stern blog post. Interested MSI researchers, practitioners, and stakeholders are also invited to send us feedback directly at info@msi-integrity.org.

Introducing the MSI Database: An Overview of the Global Landscape of Standard-Setting Multi-Stakeholder Initiatives

Today, MSI Integrity, the Duke Human Rights Center at the Kenan Institute for Ethics, and Miller & Chevalier launched the MSI Database, a searchable online resource for information about multi-stakeholder initiatives (MSIs). Available at www.msi-database.org, the website catalogues information about the scope, governance, and operations of transnational standard-setting MSIs.

Since the 1990s, MSIs have emerged as prominent global governance institutions, seeking to address some of the most challenging issues in the global economy. The 45 MSIs included in the database operate across global industries and set standards for companies and governments on a range of human rights, governance, and environmental issues ranging from forced labor to government corruption and forest conservation. These MSIs operate in over 170 countries on six continents, certifying the production of clothing and other manufactured goods, monitoring commercial fishing practices, setting sustainability standards for cocoa and cotton production, and more.

The database is intended as an open-access resource for learning about these initiatives. It catalogues publicly available information about the mission, governance structures and operations of transnational standard-setting MSIs, including the following data points:

For example, the database entry for Better Cotton Initiative includes the industry group the MSI operates in, stakeholder representation on its governing body, its mission, launch date, and key institutional design characteristics:

This online resource is intended to support continued debate and discussion about the voluntary governance of the private sector and encourage further research and dialogue about the role of MSIs. Accordingly, the MSI Database does not evaluate, rate, or rank MSIs, and is instead envisioned as an introduction to the global landscape of MSIs and how they describe themselves.

As the MSI Database currently provides a condensed overview of each MSI and its characteristics, we encourage MSI participants, researchers, and interested stakeholders from industry, government, and civil society to contact us with feedback about how to improve or expand this database in the future – whether by adding indicators, including new MSIs, or otherwise.

Next month, MSI Integrity and the Duke Human Rights Center at the Kenan Institute for Ethics will also be releasing a report summarizing initial findings from the MSI Database. The report, The New Regulators? Assessing the Landscape of Multi-Stakeholder Initiatives, highlights key findings from the database, noting the presence of transnational standard-setting MSIs in various industries, patterns in MSI institutional governance, and analysis of how these MSIs set and monitor compliance with their standards. It also identifies potential questions raised by these findings that could be a starting point for future research.

We hope the MSI Database serves as a useful resource for practitioners and researchers and welcome feedback, questions, and observations at info@msi-integrity.org.

Research Workshop on Multi-Stakeholder Initiatives at Occidental College: Introducing the Global MSI Research Network

Last month, the John Parke Young Initiative on the Global Economy at Occidental College, the Harvard Law School Human Rights Program, and MSI Integrity hosted academics and practitioners for a research workshop on multi-stakeholder initiatives (MSIs). Through research presentations and interactive discussions, participants reflected on what we know—and still don’t know—about the political dynamics, effectiveness, and impact of MSIs two decades after their emergence in the global governance field. The event also launched a new Global Research Network on MSIs to foster discussion and collaboration among academics, applied researchers, and practitioners on the institutional design, governance, and effectiveness challenges facing MSIs.

Participants in the two-day workshop included researchers and current and past leaders of MSIs from thirteen countries on five continents. A central goal of the workshop was to bring practitioners and researchers into dialogue about key unresolved questions about the role of MSIs in addressing global human rights, environmental, and governance challenges.

Highlights from the workshop included:

  • Perspectives from current and former leaders of MSIs – The opening panel traced the emergence of MSIs and other “Global Action Networks” following the end of the Cold War. Panelists, who included current and former heads of the Global Initiative for Fiscal Transparency, ICANN, and the Global Reporting Initiative also reflected on the challenges and questions they have faced as leaders of MSIs.
  • Critical reflection on MSI effectiveness – Multiple panel discussions addressed the promise, impact, and shortcomings of initiatives ranging from the International Code of Conduct Association and the Voluntary Principles on Security and Human Rights to the Fair Food Program and Accord on Fire and Building Safety in Bangladesh. As these and other MSIs have become an important part of the global governance conversation, participants discussed how best to measure their effectiveness and impact in the context of business and human rights and sustainable development.
  • Analysis of power dynamics in MSIs – Discussants grappled with the question of how MSI participants succeed—and sometimes fail—to work together effectively on issues that are often highly contentious. These power dynamics have proven to be particularly acute across the global North-South divide and between stakeholder groups within MSIs—such as industry, government, civil society, and industry-affected populations.

MSI Integrity was excited to work with participants and the workshop hosts at Occidental College’s John Parke Young Initiative. We plan to continue and broaden the discussions on MSIs that began at the workshop later this year and into 2018. In collaboration with workshop participants and our global steering committee, we will be working to expand the Global Research Network on MSIs to support continued engagement between MSI practitioners and researchers across research disciplines.

Interested researchers and MSI stakeholders who would like to stay updated about future events and other research network news are invited to contact us at info@msi-integrity.org to join the network’s email list.

 

Canary in the Coal Mine: Trump Administration Undermines a Global Anti-Corruption Initiative

This blog is designed to provoke thoughts and encourage debate about the function, effectiveness and role of MSIs. The views expressed here are the personal views of the author and are not the institutional positions or views of MSI Integrity. We welcome critiques and responses on the ideas below. If you would like to post a long-form response, or contribute your own piece, please contact us at: info@msi-integrity.org

The following was published on the online forum, Just Security, on April 13, 2017

Those nervously watching to see whether the United States will uphold its existing international commitments to protect human rights and address corruption have had their eyes trained on the positions typically in charge in this arena: U.S. Ambassador to the UN Nikki Haley, Secretary of State Rex Tillerson, and President Donald Trump himself (or, at least, his twitter account). But some of the most worrying signals are emanating largely unnoticed from staff at the Department of the Interior (DoI). Recent actions by DoI officials have caused speculation that the U.S. may soon be leaving a major global anti-corruption initiative, the Extractive Industries Transparency Initiative (EITI). This is just one example of dozens of little-known international “multi-stakeholder initiatives” that now appear to be under threat of being rolled back or neglected. These initiatives, most of which set standards for voluntarily participating countries or companies, have won favor amongst those wary of negotiating treaties or establishing binding corporate regulation to address corruption, insecurity or human rights. If the Trump administration continues taking steps to undermine these initiatives it will erode an already weak system of global oversight into corporate conduct and the flow of illicit dollars, thereby increasing the overall risk of human rights violations, violence and instability.

The U.S. joined EITI in 2011, a decade after it was started by then-Prime Minister Tony Blair in response to pressure from NGOs who were showing links between revenue generated by mining, oil drilling and similar extractive industries, and corruption, conflict and human rights abuses – a phenomenon that is now known as the “resource curse.” The initiative’s 50-plus member countries, largely from the Global South, have pledged to follow EITI’s requirements, which center on releasing annual reports that disclose payments between oil, gas and mining industries and the government. The cornerstone of the initiative’s operation is that the EITI process must be overseen in each member country by a multi-stakeholder group that includes both “fully, actively and effectively engaged” civil society and industry designees. This transparency is supposed to enable an informed national debate inside member nations that focuses on questions vital to fighting corruption and other ills of the resource curse: Where has all the money gone? Why did the country itself receive so little? How come those funds went directly into the Swiss bank account of that government minister?

Yet new actions taken by the Trump administration threaten the possible unraveling of this 15-year old global initiative in just a few months.

The U.S. released its first and only EITI report in late 2015. While that document contains tidbits of interesting information, it falls short of the transparency requirements set by EITI: The majority of participating American companies refused to voluntarily disclose their federal tax payments, and the report provides no breakdown of payments on a project-by-project basis – such as the money linked to a specific mine or oil field. This project-level reporting ordinarily has the most significant information and is of far greater interest to the public than national aggregates. That key failure was supposed to be remedied by a rule issued under Section 1504 of the Dodd-Frank Act, which required U.S.-listed companies to disclose payments made to both U.S. and foreign governments for the development of oil, gas or minerals. That rule, which was to come into effect next year, would have made great progress in the fight against global corruption by setting a mandatory rule that went even beyond the reach of EITI. Importantly, it would have helped the U.S. pass a scheduled audit by EITI in 2018.

The rule no longer exists. One of the first acts of Congress under the Trump administration was to repeal it, and whether a new rule will be approved is unclear. Anti-corruption activists were still reeling from that blow, when during one of the regular multi-stakeholder meetings held at the Department of the Interior, the microphone was cut off as a civil society representative began to ask questions as to whether the Trump administration was committed to EITI. This was a breach of one of EITI’s key operational principles: the ability for civil society to speak freely within EITI. Soon after, Outlook email invitations to all future EITI meetings were cancelled. Civil society representatives in the multi-stakeholder group scrambled to issue a collective public statement that these actions are tantamount to the U.S. voluntarily halting its own EITI process.

Last week, after an unscheduled meeting of the multi-stakeholder group’s co-chairs was called to clarify the situation, officials denied that a decision to withdraw had been made, although the path for how the group would proceed was unclear. The Department of Interior is in an embarrassing bind: If it does not withdraw from the organization, then the country risks publicly failing the EITI audit, which may ultimately result in it joining a group of suspended countries that includes Azerbaijan, the Central African Republic, Kyrgyzstan, and Yemen. If the U.S. voluntarily withdraws or “pauses” its involvement, it will not only signal that countries like Nigeria and Peru – which recently passed validation – are more transparent in this area, but a host of autocrats in repressive states may feel entitled to follow suit, thereby gutting the power of the 51-member initiative.

A tell-tale sign for dozens of similar initiatives?

EITI is just one of the many different “multi-stakeholder initiatives” (MSIs) that the U.S. government or major U.S. companies have joined over the last two decades. These initiatives, which proliferated in the late 1990s and early 2000s, are premised upon collaborating with civil society (or, far less frequently, with workers or affected communities) to fill the governance gaps that exist where states are unwilling or unable to provide basic rights for their citizens or otherwise uphold laws that regulate corporate behavior. They tend to emerge in response to high-profile campaigning or scandals about a particular industry or issue, although generally receive little public attention once they become operational.

For example, the exposés on the blood diamond trade led to the Kimberley Process, which brings in civil society and companies to certify diamonds as “conflict-free.” The execution Ken Saro-Wiwa and other Nigerian activists who had been vocally opposing the operation of Shell in the Niger Delta contributed to the development of the Voluntary Principles on Security and Human Rights, which provides operational and human rights guidance for extractive companies. The dependence on Blackwater and other private military companies in Afghanistan and Iraq prompted the eventual emergence of the International Code of Conduct for Code for Private Security Service Providers. There are countless other multi-stakeholder initiatives with similar self-explanatory names: the Alliance for Responsible Mining, the Fair Labor Association, the Open Government Partnership, to name just a few.

Given that all of these initiatives rely on the voluntary participation of companies or governments, they risk becoming a flimsy distraction from efforts to develop binding legal human rights obligations for companies. But they are a central part of the U.S.’s long-awaited response to a call from the UN for states to develop policy plans demonstrating how they are ensuring the protection of human rights against business-related harms. One of the few clear commitments made in the U.S.’s oft-criticized plan was a promise to collaborate with stakeholders such as civil society organizations, with the U.S.’s participation in EITI expressly cited as one of a handful of examples of the types of initiatives that the “U.S. government will continue to play a leadership role in.”

The ease with which the Trump administration took actions to undermine its participation and compliance with EITI indicates something deeply troubling may be emerging. That is: The Trump administration is prepared to ignore a centerpiece of the U.S.’s brand new framework aimed at curbing human global rights abuses related to business interests. The fragility of the voluntary patchwork of multi-stakeholder initiatives that was supposed to offer human rights protections and stem illegal transactions that contribute to instability, crime, terrorism and countless other security threats is now apparent, and the worst is likely yet to come.