A Critical View of Multi-Stakeholder Initiatives: The MSIntegrity Report: "Not Fit for Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Good Governance"

 

In July 2020, MSIntegrity Released its Report: Not Fit for Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Good Governance. It described the thrust of the Report on its website:

Not Fit-For-Purpose reflects on a decade of research and analysis into international standard-setting MSIs. It concludes 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. Through an analysis of six key cross-cutting insights, the report invites readers to think critically about the limitations of voluntary regulation and to envision more effective strategies to protect human rights.

The Report is worth considering in two respects.  First on the specific critique of the forms and operation of Multi-Stakeholder Initiatives.  Much of its observations bear careful consideration.  Second, and perhaps more profoundly, is the development of the insight that the logic of institutions, even those created for the best reasons and most positive (normative) intentions inevitably become the prisoners of the logic of institutional forms. It then follows that the stronger the institutional form, the more precarious its relationship to the passion and normative thrust that brought it initially to life. 

 

Summary materials from the Report (the Six Key Insights) along with information about MSInsight follow.

 

KEY FINDINGS AND OBSERVATIONS

1. MSIs emerged as a default response in the Global North to many of the major global business-related human rights crises in the 1990s and 2000s. They were often developed with support from Global North governments or large international NGOs. They were often perceived as a compromise between no regulation and mandatory public regulation.
2. MSIs have enjoyed broad influence in the business and human rights landscape. The support of powerful governments, multinational corporations, and CSOs legitimized MSIs as good practice. Prominent CSOs called for the creation of MSIs and helped found them in many industries. Subsequently, the inclusion of MSIs in the remedial pillar of the UNGPs crystalized them as a “field” that became increasingly institutionalized and well-resourced.
3. MSIs have influenced government action and policy. For example, at least 16 of the 23 National Action Plans that countries have published as part of their efforts to implement the UNGPs include reference to MSIs.
   • MSIs have become part of corporate engagement with human rights. Over 10,000 companies participate in MSIs, including 13 of the 20 world’s largest companies by revenue.
   • MSIs are part of international frameworks and governance. Individual MSIs have been endorsed by international finance institutions and the UN. They are key reference points for company human rights rating agencies.
   • MSIs influence public behavior and perceptions. Many consumers rely on the labels bestowed by MSIs to make ethical consumption decisions.
4. Over the last few years, growing questions and concerns by those who have closely monitored or participated in MSIs have bolstered long-standing civil society criticisms of MSIs:
   • A number of CSOs have withdrawn from individual MSIs over concerns about inaction, ineffectiveness, and the resources they consume.
   • There are now well-documented instances in which MSIs have failed to detect or remedy human rights abuses. Complaints have been brought against multiple MSIs in OECD National Contact Points.
   • The term “MSIs,” which did not have a negative connotation when it was used in the UNGPs, has become increasingly connotative of a corporate-oriented model or a model that is not focused on accountability. “Worker-driven” models have emerged and specifically contrast themselves with MSIs. Such models are growing and may displace MSIs in the medium to long term.
5. There is growing recognition of the need for government regulation in a “smart mix” of tools to promote business respect for human rights, rather than an overreliance on voluntary measures. There has been a resurgence in advocacy for public regulation both domestically and internationally, on the premise that voluntary initiatives are not sufficient.

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From MSIntegrity Not Fit For Purpose Summary Report available HERE.

 

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ABOUT MSINtegrity

The Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) aims to reduce the harms and human rights abuses caused or exacerbated by the private sector. For the past decade, MSI Integrity has investigated whether, when and how multi-stakeholder initiatives protect and promote human rights. The culmination of this research is available in this report: Not Fit-for-Purpose.

We are now embarking on a new direction: applying lessons learned from the grand experiment in multi-stakeholderism to promote business models that center worker and communities in their governance and ownership.

See our new work: Beyond Corporations.