Not Fit-for-Purpose: Press Kit FAQ

Although the term ‘MSI’ is far from a household concept, many people around the world now rely on or interact with them in their daily lives: from factory workers and local communities negatively affected by corporate behavior, to consumers looking at labels on chocolate bars, bags of coffee, and tins of tuna that claim the products are made “sustainably,” “fairly,” or “ethically.”

At their most expansive, multi-stakeholder initiatives (MSIs) can be imagined as any collaboration between public and/or private actors—such as corporations, governments, civil society organizations, and rights holders—that have a stake in an issue. The term can mean anything from public-private partnerships in an infrastructure project, to forums for collective learning or dialogue.

However, our work, and this report, focus on what we call “international standard-setting MSIs”: initiatives where multiple stakeholders set transnational standards for corporations or governments that address or affect human rights. For a full technical definition, see the introduction to our report, Not Fit-for-Purpose.

There are at least 40 international standard-setting MSIs that cover a wide range of different industries, issues, and approaches. For a list of these MSIs, see here. Some of these MSIs certify factories, farms, or other production sites as meeting their standards; others may be focused on changing government behavior as it intersects with corporate practice; some may set standards for large brands or companies about a specific human rights issue, while others may try to address a wide range of adverse impacts linked to an industry. Although the MSIs are diverse and each is unique in its context and form, they share a common architecture that enables them to be broadly compared and critiqued.

Well-known examples include Fairtrade International, Rainforest Alliance, Roundtable on Sustainable Palm Oil, Extractive Industries Transparency Initiative, Fair Labor Association and the UN Global Compact. There are 40 standards-setting MSIs in our MSI Database and that are examined in our latest report, Not Fit-for-Purpose. These MSIs operate in the agricultural, forestry, fishing, consumer goods and services, industrial, mining and energy, and tech industries.

Over 10,000 companies participate in MSIs, including 13 of the world’s 20 largest companies by revenue. These include well-known corporations in tech (Amazon, Apple, Google, Microsoft, and Facebook), apparel (Nike, adidas, and Gucci), retail (Costco, Whole Foods, Ikea, Target, and Walmart), restaurants/food (Nestle, Hershey, McDonald’s, Starbucks, and Coca-Cola), and oil/gas (BP, Chevron, Exxon Mobil, and Shell), and beyond.

During the 1990s and 2000s, the growing role of multinational corporations in major human rights or environmental harms came to the forefront of public awareness. This period included many high-profile exposés of corporate misconduct, from sweatshop scandals to deforestation of indigenous peoples’ lands and internet giants breaching user privacy at the behest of repressive governments. The governments that host these companies’ operations could not—or would not—create or enforce laws to hold them accountable for contributing to such harms. Nor did the home governments of multinational corporations create sufficient incentives or legal regimes to protect against, or hold companies accountable for, human rights abuses that occurred abroad. In the absence of any adequate domestic or international accountability mechanisms, civil society teamed up with companies, and some governments, to establish voluntary frameworks to fill these governance gaps.

Despite the growth and prevalence of MSIs, there has been little public examination of whether these experiments in private governance have worked for rights holders. As standard-setters for their industry members, MSIs created a private form of regulation—a new category of regulatory institution—that wields significant influence in the public domain. Yet, unlike governments, they are not appointed by or accountable to the wider public. Nor are they as heavily scrutinized as government bodies, whose decisions and functioning are subject to formal processes of review, transparency, and public debate in democratic societies.

Not Fit-For-Purpose, reflects on a decade of research and analysis into international standard-setting MSIs, and outlines through six cross-cutting insights that this grand experiment has failed in its goal of providing effective protection against abuse. While MSIs can play important roles in building trust and generating dialogue, they are not fit-for-purpose to reliably detect abuses, hold corporations to account for harm, or provide access to remedy. Yet governments, companies and other stakeholder continue to point to them as solutions to human rights problems.

Two features have intrinsically limited the capacities of MSIs to protect rights. First, MSIs are not rights holder-centric. In general, MSIs employ a top-down approach to addressing human rights concerns, which fails to center the needs, desires, or voices of rights holders: the people whose living and working conditions are the ultimate focus of MSIs, whether they are farm workers, communities living near resource extraction sites, or internet users. Centering rights holders is essential, however, for the efficacy of any initiative that purports to address human rights. Rights holders hold critical information for ensuring that standard-setting and implementation processes respond to their lived experiences. Top-down approaches risk failing to harness the knowledge or trust of those whose lives or rights are at stake.

Second, MSIs have not fundamentally restricted corporate power or addressed the power imbalances that drive abuse. Companies have preserved their autonomy and safeguarded their interests throughout the design, governance, and implementation of MSIs. The mechanisms most central to rights protection, such as systems for detecting or remediating abuses, have been structurally weak. This has meant that MSIs are capable of achieving positive outcomes where there is genuine commitment on the part of corporate members to change; however, when that goodwill breaks down—as it often has—MSIs have been able to do little to protect human rights.

After reflecting on a decade of research and analysis, our assessment is that MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims with access to remedy. This is based on six key insights, that are the result of a decade of research and engagement in the field.

The lessons from our research suggest that two major steps need to be taken in order to address corporate-related abuses and provide meaningful rights protection:

1. 1. We need to rethink the role of MSIs. MSIs should be recognized for what they have been equipped to do well: to be forums for building trust, experimentation, and learning. However, they should no longer be viewed as institutions that robustly ensure that their corporate members respect rights, provide access to remedy, or hold corporations accountable for abuses. Regulation of corporations is needed for these purposes. The existence of an MSI should put governments—as well MSIs and their supporters—on notice that a governance gap exists, and that they need to supplement the voluntary efforts of that MSI with mandatory measures at local, national, and international levels.
   2. We need to challenge and reimagine the corporate form. It is time to center workers and affected communities in the governance and ownership of businesses. As long as corporations remain primarily beholden to investors and operate in their current legal and governance frameworks, they will continue to make decisions that harm people and the planet. We need to promote more equitable business models.

Many well-documented cases illustrate how MSIs have failed to protect rights. 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; just three weeks before a garment factory fire in Pakistan that killed nearly 300 workers, Social Accountability International certified the facility as safe; and child labor continues today in certified cocoa farms. Many more examples are highlighted in the full report.

The specific failures of MSIs to detect abuses or uphold rights 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.

This report is the culmination of the research, learning, and insights we have obtained since 2010, when MSI Integrity first began as a project of the International Human Rights Clinic at Harvard Law School.

Over the course of our work, we interviewed hundreds of stakeholders, from MSI staff and members, to individual rights holders; conducted and collated research into pressing issues, including analyzing more than 1,500 pages of MSI procedures and policies; observed the meetings and assessed the practices of individual MSIs; and hosted or participated in almost 50 learning events, from panels on the effectiveness of MSIs at the United Nations Forum on Business and Human Rights to small hands-on workshops to design robust accountability mechanisms in MSIs. Over time, we began to observe major trends that appeared to be true for the field of international standard-setting MSIs.

Recognizing that few organizations engage in the type of cross-sector and cross-issue MSI engagement that we do, we decided it would be helpful to formally reflect on these trends and to examine the insights that they provide for the field. The insights presented in this report are thus derived from years of observing, analyzing, and researching MSIs. Specifically, three streams of work have shaped our insights:

1. 1. The development of analytical frameworks and tools to evaluate the effectiveness of MSIs from a human rights perspective.
   2. Critical research into MSIs, including through direct dialogue with rights holders and MSI members.
   3. Convening and collating external research and observations into the impact and effectiveness of MSIs.

To ensure our insights are supported by the experience or research of other stakeholders—and are not skewed by the specific MSIs, individuals, or human rights issues we have worked most closely on or with—we conducted significant additional research for the report. This included extensive review of the state of evidence and research into MSIs, as well as expert review of our key insights. In addition, the 40 MSIs in our MSI Database were invited to review the datasets and case studies we created relating to their initiative, as well as to provide any other feedback or engagement. More information about our knowledge base is available in the full report.

Public Regulation: MSI Integrity believes that the presence of an MSI, or any form of private governance, should not be a substitute for public regulation. MSIs do not eliminate the need to protect rights holders from corporate abuses through effective regulation and enforcement. To the contrary, the existence of an MSI should put governments—as well MSIs and their supporters—on notice that a governance gap exists, and that they need to supplement the voluntary efforts of that MSI with mandatory measures at local, national, and international levels.

Enforceable and Worker-Centered Models: To the extent that any form of private governance can be effective for rights protection and corporate accountability, such mechanisms need to overcome the current failings of MSIs. This means they need to be rights holder-centric and address corporate power such that the regulated entity is not controlling the institution, neither formally nor informally. We note that this is possible, as these are the bedrock principles of Worker-driven Social Responsibility (WSR) initiatives that have emerged as counterpoints to MSIs. WSR initiatives are designed by and for workers and include legally enforceable standards.

Beyond Corporations: MSI Integrity believes in moving beyond corporations by developing and promoting economic models and policy transformations whereby: (1) workers and/or affected communities are at the center of decision-making; and (2) benefits and ownership accrue to the workers who generate value for a business and/or to the communities and rights holders who are impacted by its behavior. Reshaping businesses to reflect these criteria is not only necessary, but possible. One does not need to look very far to see beyond the corporate form. Such economic entities exist today and have existed for millenia; from burgeoning cooperatives in the solidarity economy movement to mutual aid networks in indigenous communities. For more information on MSI Integrity’s future work on this, see Beyond Corporations.

The Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) is a nonprofit organization originally dedicated to understanding the human rights impact and value of voluntary multi-stakeholder initiatives (MSIs) that address business and human rights. We were incubated at Harvard Law School’s International Human Rights Clinic between 2010-2012, and launched publicly as a 501(1)(c)(3) in 2013.

MSI Integrity ultimately envisions a world where the private sector respects and protects human rights and the environment; a world where corporations are held accountable for any human rights abuses they commit, and provide remediation for any harm caused. From 2020, we are embarking on a new direction: examining how the corporate form itself is central to the abuse of human rights globally, and how other community and worker-centric business models might lead the way toward a more economically and environmentally just future. For more information on our new focus, please see: Beyond Corporations.

For more information on our history, staff, and future direction see here.

Please contact Teddy Ostrow, Research and Communications Associate, at teddy@msi-integrity.org / +1 (718) 594-5873 for media inquiries.