Ngo Involvement in Promoting Corporate Responsibility: The Role of “multistakeholder Initiatives”

There appears to have been a considerable warming of relations between NGOs and large corporations in recent years. This is reflected in the increasing number of NGOs engaging in service delivery activities associated with corporate social responsibility.

This presentation looks at why this shift in approach has occurred and its implications for activism and development. Particular attention is focused on the recent wave of so-called "multistakeholder initiatives" where NGOs, multilateral and other organizations encourage companies to participate in schemes that set social and environmental standards, monitor compliance, promote social and environmental reporting and auditing, certify good practice, and encourage stakeholder dialogue and "social learning".

Since the 1980s, there has been a shift in thinking regarding how to improve the social and environmental performance of transnational corporations. An earlier emphasis on governmental regulation ceded ground to "corporate self-regulation" and forms of "civil regulation" based on voluntary approaches. Multistakeholder initiatives are the latest phase in this trend.

Referring to 14 such schemes, this presentation identifies some of their strengths and weaknesses and concludes by questioning whether such approaches are likely to significantly advance the agenda of corporate social responsibility. The schemes referred to include AA1000, the Clean Clothes Campaign, the Ethical Trading Initiative, the Fair Labor Association, the Forest Stewardship Council, the Global Alliance, the Global Compact, Global Framework Agreements, the Global Reporting Initiative, ISO 14001, the Marine Stewardship Council, SA8000, WRAP, and the Worker Rights Consortium.

It is argued that such forms of "civil regulation" emerged partly in response to the growing awareness that codes of conduct that were unilaterally designed and implemented by companies tended to be weak and often aimed more at public relations than substantial improvements in social and environmental performance. However, the rise of civil regulation also reflects changes that are occurring in the balance of social forces – notably the growth of NGO and consumer pressures – and notions of "good governance", which emphasize the importance of collaboration and "partnership".

Regarding the strengths and weaknesses of multistakeholder initiatives, the following observations are made:

Multistakeholder initiatives have attempted to address some of the major weaknesses of codes of conduct associated with corporate self-regulation, notably aspects dealing with labour rights, the responsibilities of suppliers in commodity chains controlled by TNCs, and the need for independent monitoring. Some initiatives also aim to impose a degree of harmonization and standardization on what had become a confusing web of codes of conduct.

By their very nature, multistakeholder initiatives attempt to bring into decision-making processes a broader range of actors, but some initiatives have ignored or marginalized workers, trade unions, local-level monitoring and verification organizations in developing countries, and southern actors more generally. It is important to improve worker participation in monitoring and verification procedures. It is also crucial for multistakeholder initiatives to be more sensitive to the priorities and concerns of various actors in developing countries. Such a reassessment needs to give more thought to the cost and protectionist implications of CSR initiatives.

Despite the growth of multistakeholder schemes, the number of corporate sectors and companies involved remains relatively small. This is partly a function of the recent origin of such initiatives and the vast number of TNCs and suppliers. But it also reflects the difficulties of scaling up monitoring and verification procedures that are extremely complex and often costly. Not only is the range of data required quite broad, (health, safety and environment conditions; hours worked, pay, worker-management