Author: Teddy Ostrow

by Jaff Bamenjo, Coordinator of RELUFA/Cameroon

Multi-stakeholder Initiatives (MSIs) emerged in the 1990s as frameworks for engagement between governments, the private sector and civil society organizations (CSOs) to address human rights issues in business. There are currently several sector-specific MSIs around the world originally conceived to address problems, ranging from labor abuse to corruption, in agriculture, extractive industries, forests, the environment and beyond. After more than two decades, however, local communities are now questioning whether MSIs have proved relevant and effective in addressing these problems.

As a civil society actor who works closely with communities affected by resource extraction in Cameroon, I have closely followed the implementation of two MSIs: the Kimberley Process Certification Scheme (KPCS) and the Extractive Industries Transparency Initiative (EITI) for close to a decade. The KPCS and EITI were both created in the early 2000s and received with a lot of enthusiasm by some CSOs as tools to promote transparency and accountability in the extractive sector and prevent diamond-fueled conflicts, respectively. Though almost twenty years later, it is quite telling how these MSIs are oblivious to the concerns of the local communities that were the intended beneficiaries of their creation.

The Kimberley Process Certification Scheme: Sidelining civil society and not addressing key issues

Formed in 2003 by the United Nations (UN) General Assembly, the KPCS is a joint government, industry and civil society initiative aimed at eliminating the trade in conflict diamonds. The KPCS was created in response to public outcry at the end of the 1990s over diamond-fueled conflicts in certain African countries. Today, the KPCS takes credit for eliminating about 98.8% of conflict diamonds in the world.

The commonly used definition of conflict diamonds, however, is incredibly narrow: “rough diamonds used by rebel groups or their allies fighting to overthrow a legitimate government.” While it can be argued that, apart from in the Central African Republic, there are no rebel movements currently using diamonds to fund wars to overthrow legitimate governments, human rights violations and massacres have reportedly continued in diamond mines around the world. And in turn, they disproportionately impact local communities near the mines.

Per the narrow definition of conflict diamonds, KPCS pays little attention to such human rights violations. Instead, they classify them as outside their scope. But such neglect by the KPCS to include other forms of abuse committed by the military or private security agents is incomprehensible to those most affected. In the Marange diamond fields of Zimbabwe, some CSOs have reported security agents for private mining companies unleashing dogs on and shooting defenseless local artisanal miners. Yet diamonds sourced from these fields are certified and allowed to enter the international market.

CSOs have been consistent over the past years in urging the Kimberley Process to extend the scope of the definition of conflict diamonds to include human rights abuses, torture, inhumane and degrading treatment, etc. But this has never been accepted by its participating governments, even though there are recurrent reform cycles within the KPCS during which such important decisions can be made. This refusal of governments to reform undermines the relevance of stakeholders in the claimed “tripartite” foundation of the KPCS. Its other two pillars, civil society and industry, are sidelined, since decisions are made only through consensus by participating governments. CSOs and industry are simply observers.

The international gatherings of several government, industry and civil society representatives for the KPCS resemble an elitist club of government friends, engaging in diplomatic games that carefully avoid important reforms to address the relevant concerns of diamond-mining communities. The current set-up and functioning of the KPCS makes change very unlikely because critical voices from civil society and diamond-mining communities are not included in decision-making.

The Extractive Industries Transparency Initiative: Sidelining local communities

The EITI seeks to promote transparency and accountability in the oil, gas and mining sector through company disclosure of their payments to governments and government disclosure of the revenue generated from the exploitation of extractive resources. A multi-stakeholder group oversees the implementation of its global standards. The EITI so far has the merit of introducing discussions about oil, gas and mining revenues in the public domain in most African countries where revenue from extractive resources were earlier treated as a state secret. CSOs have equally acquired more knowledge in conducting advocacy and participating in discussions around the extractive industry value chain.

However, one handicap of the EITI in many countries is the fact that its implementation is centralized in the national capital. Most of the participating stakeholders are based in the capital city, sidelining local communities where the exploitation of the extractives resources occur and whose lives are directly impacted. Many communities directly impacted by resource extraction are not even aware of the existence of the EITI, and hence, its inclusiveness and consideration of community needs should be questioned. In Cameroon, for instance, the Ndian Division generates almost 99% of oil revenues in the country. But apart from the local Mayor of its chief town being invited to participate in EITI meetings in the capital, the population of this area has little knowledge of the EITI and its role.

Although the merits of the EITI in promoting oil revenue disclosure in Cameroon should be acknowledged, there is no evidence to suggest that EITI has meaningfully benefited local communities and their social and economic development. Instead, in civil society circles it is understood that many countries adhere to the EITI merely for image-cleansing; they participate in an international transparency initiative without necessarily making it a tool to promote transparency at the local level and for the general good.

Moving beyond lip service

Both the KPCS and EITI are both operating and perceived as elite actors with too little anchorage in local communities affected by resource extraction—despite the fact that these communities are their intended beneficiaries. It is therefore clear that these multi-stakeholder initiatives are mostly relevant as discussion platforms, paying mere lip service to local communities.

Government and industry are seen as allies within these initiatives while CSOs struggle to raise the legitimate concerns of the local communities. Unfortunately, the unequal power relations wielded by governments and industry make reforms within these MSIs very unlikely. Instead, too much time and energy are spent navigating procedural issues that have little impact.

Although MSIs cannot be counted upon to protect community interests, there is still a need to rethink and render them more inclusive of local communities since they provide a platform for these communities to obtain useful information for the defense of their rights.

This is the fourth contribution in a joint blog series by the International Human Rights Clinic and MSI Integrity. The series will critically examine the role and value of MSIs in business and human rights; it coincides with a new report, Not Fit-For-Purpose, which compiles experience and insights over the last decade and explores cross-cutting trends and lessons learned about MSIs, as a field, from a human rights perspective. Read other blogs in the series here.

by Harris Gleckman

Multi-stakeholder standard-setting organizations, or multi-stakeholder initiatives (MSIs), are part of a wider political push to introduce multi-stakeholderism as a legitimate component in global governance. However, they are not sufficiently democratic or accountable to external constituencies to warrant their status or standing as global governance tools.

Understanding the different types of MSIs: standard-setting, policy-setting and project-delivery

There are actually two distinct forms of MSI. One sub-class focuses primarily on enhancing social, environmental, and community goals through setting global market standards, and secondarily, on balancing these concerns with its management of conflicts between firms and sectors in a given “socially responsible” global market. The other sub-class of MSI reverses these priorities. In the case of internet governance, for example, the primary focus of the standard-setting activity is managing inter-corporate and inter-sub-sector battles, while the secondary focus is responding to calls for social access, enhanced privacy, and discounted pricing for marginal communities.

Beyond standard-setting MSIs, there are two other forms of multi-stakeholder global governance arrangements: (1) multi-stakeholder bodies that develop global policy directions; and (2) multi-stakeholder consortia which implement specific geographically and time-limited projects.

On the policy front, for example, one can look at the World Economic Forum with its effort to set global policy via their Global Future Councils, or their “offer” to take leadership of work areas traditionally occupied by the United Nations like food security and biodiversity, and their new strategic partnership agreement with the Office of the UN Secretary-General. These policy-oriented multi-stakeholder arrangements convene, usually under the leadership of a corporate body, a combination of market-oriented government figures, friendly civil society organizations, academic specialists, and corporate executives eager to develop a public policy consensus within a global market system.

Public private partnerships are an example of project-delivery multi-stakeholderism. They bring together separate categories of actors but, rather than setting standards, they seek to deliver a specific public good or service while effectively gaining a degree of governance over a specific population.

These three types of multi-stakeholder arrangements—standard-setting, policy-setting, and project-delivery—reflect the diversity of forms of multi-stakeholderism in practice and in theory. They represent a drive to shift global governance away from multilateralism and one-country-one-vote toward a multi-stakeholder form of global governance.

The (un)democratic character of multi-stakeholderism

In my view, the state of democracy in the MSI world needs to be evaluated on at least four grounds: (1) its internal rules to manage the imbalance of power between the different types of MSI board members; (2) an assessment of the legitimacy of MSIs’ impact on the wider world; (3) the effectiveness of its anti-conflict of interest policies; and (4) their claims to legitimacy through democratic language. This blog looks at the last evaluation criteria.

The advocates of multi-stakeholderism have described MSI undertakings as good examples of “inclusive governance,” “participatory governance,” and “stakeholder governance.” The choice of these expressions says a lot, unintentionally, about their perceptions of democracy.

“Stakeholder governance” depends first and foremost on an agreed, unambiguous definition of “stakeholder” or an agreed, unambiguous procedure to select said stakeholders. But as I have argued in other writings, there is no clarity about the definition of “stakeholder” or the procedure to designate stakeholders. Each multi-stakeholder group defines the term “stakeholder” in its own way. For example, a given MSI could “count” a female Moroccan miner as a worker, a representative of Africa, a feminist, a Black person, a representative of mothers, a representative of developing countries, or one of the innumerable possible combinations of these categories. If “stakeholder governance” is legitimately going to govern a specific sector, then in the selection process of the decision-makers in a multi-stakeholder group, it needs to be demonstrably clear how all relevant stakeholders are designated and that no key “stakeholder” is excluded. Further, it must be clear that an MSI has not weighted the balance of one type of stakeholder, particularly those with significant political or economic power, over other types of stakeholders—that “stakeholder governance” credibility is not afforded to MSIs that group mining owners, mining brokers, and mining refiners with the female Moroccan miner, despite clear power differentials. The democracy claim for stakeholder governance is fundamentally undermined by the political flexibility of the key “stakeholder” term.

“Inclusive governance” rests on the language of inclusiveness, which started out as a critical term. Its objective was to seat members of politically weaker communities, such as those from marginalized communities, alongside all those whose presence has traditionally been at the table: members of the elite, corporate executives, academic experts, white people, males, etc. Over time these powerful actors began to feel the heat of those who were pressing to be included in major decisions that affect their lives. Rather than face public denunciations about operating exclusive organizations, the powerful began saying that they too wanted to be “included” in the decision-making groups and organizations. The linguistic beauty of this move is that it was not possible to say anyone was “excluded,” but the power imbalance would remain intact. This sleight of hand manages to keep the more powerful traditional forces in charge while appearing to be more open to marginalized communities.

“Participatory governance” is another rather brilliant linguistic device that attempts to legitimize the selection of actors in an MSI. One can “participate” in a million ways. In traditional democracy, one can participate by joining political parties, by volunteering to distribute leaflets, by writing a letter to the editor, or by attending a public hearing. Note that none of these forms of participation have any necessary connection to power or real world decisions. In the case of multi-stakeholder governance, the same is true. Some MSIs have a “participatory” system of advisory bodies to a central decision-making committee, a “participatory” online public comment process, or a “participatory” system for non-voting formal statements to a plenary. Even in MSIs where politically marginal social movements are “represented” in the decision-making body of an MSI, the voluntary nature of MSI compliance means that they are not “participating” in governing their global economic sector.

Additionally, internal power depends on having the time to participate, the financial ability to participate, and the technical knowledge to participate meaningfully. Each of these three factors are unequally held by different potential MSI participants. If there were to be an equitable internal power balance within any “participatory,” “inclusive,” and “stakeholder” governance system, some external, non-self-interested actor would have to underwrite the time, expenses, and technical resources for all the non-corporate and non-externally funded participants—a reality that has not even been considered by any current MSI: whether standard-setting, policy-setting, or project-delivery.

Examining the use of language of democracy and of inclusion is just one ground on which to challenge multi-stakeholderism in global governance. Indeed, we might see multi-stakeholderism as a linguistic cloak for those who actually desire to institutionalize a corporate position in setting global policies and standards while keeping the profit-focused corporate structure in place. A serious reflection is needed to assess this shift and push for truly democratic global governance.

Harris Gleckman is Senior Fellow at the Center for Governance and Sustainability, UMass-Boston and Director of Benchmark Environmental Consulting. He is the former Chief of the NY Office of UNCTAD and Chief of the Environmental Unit of the Centre on Transnational Corporations. His latest book: Multistakeholder Governance and Democracy: A Global Challenge was published by Routledge in 2018. He is also the author of the Wikipedia page on multi-stakeholder governance, now translated into four other languages.

This is the third contribution in a joint blog series by the International Human Rights Clinic and MSI Integrity. The series will critically examine the role and value of MSIs in business and human rights; it coincides with a new report, Not Fit-For-Purpose, which compiles experience and insights over the last decade and explores cross-cutting trends and lessons learned about MSIs, as a field, from a human rights perspective. Read other blogs in the series here.

Contact: Teddy Ostrow
teddy@msi-integrity.org
+1 (718) 594-5873

MSI Integrity publishes study based on a decade of research with searing critique of traditional corporate social responsibility model; presents cautionary tale for corporate-led responses to pandemic

Berkeley, California, August 11, 2020 — As COVID-19 disrupts global supply chains and spreads among essential workers in the US and overseas, the Harvard-incubated Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) published a major new report, which outlines failures by the world’s leading voluntary corporate social responsibility schemes to protect human rights in their suppliers’ operations. It presents important lessons for why government oversight of labor conditions in supply chains and worker- and community-centered pandemic recovery responses are needed.

“The MSI Integrity report provides an unprecedented—and extremely timely—measure of a failed paradigm for protecting workers’ human rights,” said Gerardo Reyes of the Coalition of Immokalee Workers (CIW). “The cost of that paradigm, known as the Corporate Social Responsibility model, is found in the thousands of workers’ lives lost to factory fires, countless employers guilty of forced labor or sexual assault, and rampant hazardous working conditions,” continued Reyes. “The pandemic only underscores the urgency of the report’s conclusions, exposing the crowded, unsafe working conditions that have left workers defenseless against the coronavirus, and that have existed for decades while the corporations that buy the food and clothing the workers produce have turned a blind eye.”

The 235-page report, Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance, reflects on a decade of research into 40 multi-stakeholder initiatives (MSIs): voluntary partnerships between companies/brands and different stakeholders, such as civil society organizations, to jointly establish industry codes of conduct against which corporate members are generally audited for compliance. Many of these highly influential initiatives were created in the 1990s in direct response to major industry-wide labor abuses in supply chains, like sweatshop labor conditions in clothing factories used by Nike and Gap, or the use of child and forced labor in the cocoa and coffee sourced by Nestle and Hershey. Examples of MSIs include Fairtrade International and the Fair Labor Association.

The report concludes that this grand experiment in outsourcing the responsibility of human rights and labor protections from governments to corporations has failed. Many well-documented cases illustrate how these initiatives fall short of protecting workers: Just three weeks before the 2012 garment factory fire in Pakistan that killed nearly 300 workers, Social Accountability International certified the facility as safe; in 2019, tea sourced from Sri Lankan plantations that paid workers as little as US $0.14 a day was certified as slavery-free by Fairtrade International and Rainforest Alliance; and child labor continues today in certified cocoa farms.

Yet, even with the increasingly dangerous working conditions under COVID-19, these voluntary initiatives continue to be a primary source of “protection” for many of the world’s workers. More than 10,000 companies participate in these MSIs, including 13 of the world’s 20 largest companies by revenue. The report details systemic flaws in these voluntary initiatives, such as lack of effective measures for workers to report violations or seek remedies for abuse.

The findings are particularly relevant as discussions unfold globally around whether companies should be held liable for failing to protect workers from COVID-19 transmission in the workplace, or more pressure should be put onto the voluntary rights-protection measures corporations adopt. The grave consequences of voluntary pandemic responses have already been revealed in exposés of industry efforts to strip poultry workers of protections and assaults on unions and highly viral conditions in garment factories.

“Governments have been experimenting with outsourcing their human rights obligations to corporations for the last three decades. The failure of this experiment has left communities around the world vulnerable to continuing abuse by businesses. Workers in supply chains cannot rely on voluntary measures to keep them safe or protected,” said Amelia Evans, the Executive Director of MSI Integrity. “If we want to ‘build back better,’ then companies need to be legally responsible for the conditions of workers throughout their global supply chains.”

MSI Integrity calls for more effective government regulation and enforcement. It also points to the Worker-driven Social Responsibility (WSR) approach, which is employed by the Bangladesh Accord for Building and Fire Safety and the CIW-founded Fair Food Program (FFP), for overcoming two central limitations of MSIs: their inability to legally enforce their standards and their entrenchment of corporate interests by failing to center rights holders in their operations and governance. Unlike MSIs, WSR initiatives have been created by workers themselves, with worker-centered rights education, monitoring systems and protected complaint mechanisms. WSR programs routinely reinforce these mechanisms with mandatory economic consequences for violations, making brands and companies more accountable for the abuses that occur in their supply chains.

“The Fair Food Program was launched in 2011 by the CIW on the basis of almost a dozen binding legal agreements with major retail food brands,” said Judge Laura Safer Espinoza, Executive Director of the Fair Food Standards Council and a former New York State Supreme Court judge. “Those agreements require the buyers to suspend purchases from non-complying farms, providing meaningful market consequences for violations of workers’ rights,” continued Judge Safer Espinoza. “The mechanisms of the Fair Food Program are essential to establishing real human rights protections in corporate supply chains, and we are working today on harnessing those same structures to establish—and enforce—additional health and safety protections on participating farms to blunt the impact of COVID-19.”

Since the beginning of the pandemic, many of the existing FFP mechanisms have been leveraged to address COVID-related issues, including the worker complaint hotline, audits, and the worker-to-worker education system, which has helped push crucial public health information to isolated farms. Efforts are currently underway to establish, ahead of the coming fall harvest season, new requirements under the program’s Fair Food Code of Conduct. The new requirements will be treated as new mandatory standards under the program and enforced on all participating farms.

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

A press FAQ for the report is available from: www.msi-integrity.org/not-fit-for-purpose-press-kit-faq/

Interview Requests:

Teddy Ostrow, MSI Integrity
teddy@msi-integrity.org / +1 (718) 594-5873

Yaissy Solis, Coalition of Immokalee Workers
yaissy@allianceforfairfood.org / (239) 692-1482

Watch the live-illustrated July 30 webinar, “Beyond Business-as-Usual: Lessons from workers, communities and the failed experiment of multi-stakeholder initiatives,” hosted by MSI Integrity and Harvard Law School’s Human Rights Program here:

By Manon Wolfkamp, David Ollivier de Leth and Mariëtte van Huijstee

Between 2014 and 2019, Dutch businesses in garments and textile, banking, forestry, gold, food products, insurance, pension funds, metals, floriculture, and natural stones all entered into government-induced agreements to encourage responsible business practice. Over five years, eleven such agreements were completed. These multi-stakeholder, voluntary, sector level Responsible Business Conduct (RBC) agreements have been cornerstones of the Dutch government’s method to incentivize companies to respect human rights and the environment for years, and can be regarded as government-induced multi-stakeholder initiatives (MSIs). Inviting companies and business associations in high human rights risk sectors to enter into negotiations with civil society organizations (CSOs) and the government, RBC agreements aim to encourage companies to develop their own policies for promoting responsible business conduct. But are they effective?

The present Dutch governments’ coalition agreement agreed to evaluate this policy, which was executed by KIT Institute over the past few months and published in July 2020. The long-awaited evaluation shows that the Dutch policy promoting responsible business conduct by means of RBC agreements is insufficient.

The evaluation draws critical conclusions: only 1.6 percent of the companies active in high-risk sectors participate directly in the agreements. In addition, some sectors, such as the oil and gas sector, refuse to enter into any agreement at all. In other sectors, the share of companies reached is moderate (such as clothing and textiles and natural stone) to low (horticulture, metal). Substantial progress in the implementation of due diligence by participating companies was observed in only two out of 11 evaluated agreements (namely in clothing and textile and banking).

It is also noteworthy that various agreements lack independent monitoring (for example, food and wood), which creates a risk of greenwashing. Furthermore, there is no clear minimum standard that the agreements must meet. Commitments of companies in two RBC agreements are actually not in line with the international normative framework (wood and vegetable proteins). The evaluation also shows that the role of the Dutch government is inadequate. Especially during the negotiation phase, the business sector is in the lead: only the private sector can initiate negotiations, and critical CSOs can be replaced by more cooperative organisations in order to reach an agreement. The government can fix this imbalance by taking on a greater role itself during the negotiations, for example by not financing agreements that do not meet a set minimum standard.

The evaluation is positive about the role of the covenants as a means to connect companies to NGOs and trade unions, to facilitate exchanges and to develop a harmonized approach to due diligence.

When it comes to realising positive effects or reducing negative impacts on adversely affected rights holders in the targeted sectors, the KIT evaluation concludes: “Across the RBC agreements, progress on due diligence is largely too limited to identify concrete impacts”( p.8) and “Overall, we have not observed a reduction in negative impacts in global value chains as a result of the RBC agreements” (p.9). Furthermore, the research reports unresolved differences in expectations between companies and CSOs on the extent to which RBC agreements should function as platforms to hold companies to account.

All in all, the outcomes of the KIT evaluation show great similarity with the outcomes of MSI Integrity’s meta-analysis of MSI’s titled Not Fit-For-Purpose published in July, as is exemplified by this picture taken from the report:

Looking ahead, the KIT evaluation recommends the Dutch government to consider introducing legislation that requires compliance with the Organisation for Economic Co-operation and Development (OECD) guidelines. This would address several issues that emerge from the evaluation: legislation gives companies a much stronger incentive to comply with the international normative framework than is currently the case, and it sets a clear standard that applies to all companies.

Legislation also ensures that the “free rider” problem is addressed, so that companies that are committed to compliance with international norms have no competitive disadvantage compared to companies that do not.

Legislation and a renewed MSI policy could reinforce each other in a smart mix of measures to incentivise responsible business conduct. Thanks to such legislation, the RBC agreements might become an attractive instrument for many more companies and sectors who want to implement due diligence obligations.

Legislation also provides a clear standard, which might improve the quality of the agreements. The Netherlands can take a leading position in Europe by renewing its RBC policy to complement the introduction of mandatory human rights and environmental due diligence legislation with an improved MSI policy.

The Not Fit-for-Purpose report and the KIT evaluation clearly highlight that a company’s participation in an MSI should not be considered a seal of compliance with the international normative framework. MSIs can help companies learn about their risks and responsibilities in dialogue with CSOs and rights holders, increase their leverage by collaborating in a sector and create synergy and scale effects. However, given the clear limitations of MSIs in protecting human rights, they should not be considered a sufficient means of discharging due diligence obligations.

If the purpose is to get all companies to conduct business responsibly, what is needed is the enforceable obligation for companies to conduct human rights and environmental due diligence in line with the normative framework. Such due diligence is not only focussed on identifying risks and preventing them from materializing, but also includes addressing harms that have occurred, including remedying harms companies have caused or contributed to (see step 6 of the OECD due diligence guidance). Enforcement of such an obligation by authorities should happen at the individual company level, making participation in MSIs a potential means but not an ‘ends’ for companies to comply with their obligation to conduct business responsibly.

This is the second in a joint blog series by the International Human Rights Clinic and MSI Integrity. The series will critically examine the role and value of MSIs in business and human rights; it coincides with a new report, Not Fit-For-Purpose, which compiles experience and insights over the last decade and explores cross-cutting trends and lessons learned about MSIs, as a field, from a human rights perspective. Read other blogs in the series here.

by Christie Miedema, Campaign and outreach coordinator, Clean Clothes Campaign

When the COVID19 pandemic hit, garment brands and retailers around the world cancelled their orders. What was to them a logical risk and cost reducing measure, meant destitution for millions of garment workers around the world. Public outcry over corporate behavior led a range of brands to quickly mend their ways. However, the question remains why public outcry was even needed. Brands have spent years promoting programs they claim guarantee protection for their workers. So why couldn’t they rely on those?

In the 1970s and 1980s garment brands started to outsource production abroad. This was a step that seemed to have only advantages: lower prices, lax labor regulation, less risk. Reduced to a mere client of garment factories elsewhere in the world, garment brands and retailers could wash their hands of any responsibility for workers – or so they thought.

Enter the rules, but set and monitored by whom?

Following a series of exposés in the 1990s documenting horrific conditions in sweatshops, brands took action to curate codes of conduct and imposed them on supplier factories. This progressed to the emergence of a social auditing industry to oversee suppliers’ compliance, as well as social compliance initiatives to synchronize and oversee these codes, often in the form of voluntary, multi-stakeholder initiatives (MSIs). This all prompts the question: given the tools brands have created to regulate working conditions in the garment industry, why are workers being left to suffer during the pandemic?

The answer lies within the mechanism of these voluntary MSIs. Behind the façade of battling exploitation, MSIs have become little more than a fig leaf for fashion; a tool enabling brands to dictate the rules, while shielding the industry against responsibility and criticism, rather than protecting the workers.

MSIs, which come in different shades of brand-friendliness and ambition, have certainly played a role in normalizing ideas of supply chain responsibility, as well as facilitating discussions between brands, unions, NGOs and other stakeholders. However, as a recent report on supply chain transparency published by the Transparency Pledge Coalition has shown, many MSIs are no longer taking the lead in moving the more unwilling brands towards stronger politics, but are instead surpassed left and right by members who voluntarily go beyond what the MSIs prescribe. Only one MSI was willing to take the challenge of the Transparency Pledge coalition to actually take the lead and make transparency a membership requirement. Another recent report shows that a “soft measure” such as due diligence reporting, remains wanting. And although MSIs’ complaint mechanisms still remain useful avenues for workers and labor rights activists to appeal to if a member brand is unresponsive to resolve a case of labor rights violations, which continues to be tried again and again, the same limitations apply: the outcome is not binding.

Voluntary has failed, binding is the way forward

It is seven years after the Rana Plaza collapse in Bangladesh, whose factories were audited without noticing the death traps they posed; and eight years after the Ali Enterprises fire, certified as SA8000 compliant only weeks before over 250 workers got trapped behind closed exits and barred windows. By now, it must be clear to all that we have to leave the era of voluntary self-monitoring behind us. In April, Commissioner for Justice Didier Reynders announced the EU will be working towards mandatory due diligence legislation. Other countries, such as France and the Netherlands, already have legislation in place that holds companies to account for their supply chains. With these legislative initiatives, governments are showing businesses that the respect of human rights can no longer be a question of voluntary corporate social responsibility but is an obligation when doing business.

Even though legislation is the crucial next step, it would be too easy for brands and retailers to just wait for that. We have known for years that binding works and that there are ways to introduce it into how stakeholders change the industry together. Weeks after the Rana Plaza collapse, unions and brands signed a binding agreement to make factories in Bangladesh safe. The Accord on Fire and Building Safety in Bangladesh has made factories safer for over 2 million workers and provides workers a credible and transparent avenue to access remedy, which has prevented workers from having to enter unsafe factories and protects them against retaliation if they report safety violations. The program works, because member brands and retailers put their signature under a binding contract with extensive enforcement procedures that have eventually led to court cases against non-compliant brands. This has kept other brands in line and led to very real results for workers. The current Accord agreement is valid until June 2021, which makes it of extreme importance that a new, this time more international, binding agreement is negotiated that could roll out similar safety programs in other countries where unions have shown interest, such as Pakistan.

The Accord is not a mere anomaly in an industry still dominated by voluntary cooperation. Indonesia has had a binding protocol on freedom of association signed by sportswear brands, suppliers and unions since 2011. Last year in Lesotho, brands and unions signed a binding agreement to address gender based violence together. Last month, labor rights organizations presented model clauses for arbitration, to facilitate the creation of more binding agreements. We need regulation on government and international levels, but brands, retailers, and unions do not have to wait for that.

Real solutions

A paradigm shift from brands and retailers is needed, to recognize that lip service is not enough. Too often brands still give in to the reflex to hide behind an auditor, an MSI or even a binding agreement. When we wrote to brands asking them to speak up for higher wages in Bangladesh, many of them responded that they signed the Bangladesh Accord, apparently believing that by signing one agreement they were off the hook on other issues as well. It is paramount to realize that no initiative is a “get out of jail free” card. They cannot be shields against criticism or real responsibility. We have to rethink what MSI’s actually contribute to workers’ rights. Stakeholder cooperation to improve labor rights can be meaningful only if the agreement is concrete, the implementation is transparent, and the commitments are binding. If we truly want to leave the lawlessness of early globalization behind us, concrete binding regulations and agreements making due diligence mandatory are the way forward. The time to act is now.

This is the first in a joint blog series by the International Human Rights Clinic and MSI Integrity. The series will critically examine the role and value of MSIs in business and human rights; it coincides with a new report, Not Fit-For-Purpose, which compiles experience and insights over the last decade and explores cross-cutting trends and lessons learned about MSIs, as a field, from a human rights perspective. Read the introduction to the series by Amelia Evans and Tyler Giannini now on our blog.