Corporate Agendas
21. Behind every multistakeholder initiative (MSI), there is a decision by a corporation to engage since, at best, it is keen to improve its social and environmental record or, at worse, hopes to improve its reputation without much action. …Or, if you wish, it simply sees an opportunity for a growing market niche. In nearly all cases, corporations are much more favorable to these voluntary initiatives than to any regulatory attempts by states.
22. Corporations are largely defensive and tactical, embracing the public relations (PR) value of being seen as ‘sustainable’, but seeking to slow down and delay regulatory reforms as long as possible. In many cases, the staff allocated to MSI roundtables are not technical experts, but PR staff. They frequently expect civil society groups to act as the accountability mechanism and experts. And they milk the reputational benefits of an MSI to provide a cover for all their operations, whether related to the MSI or not. This tendency is made worse by the fact that corporations that join MSIs are sometimes the worst actors: Having been rightly targeted for their abuses, they turn to MSIs to improve their reputation and yet do not have a fundamental commitment to make meaningful and significant changes to their operations.
23. States have similarly used MSIs to whitewash their failure to protect human rights (HR) and HR defenders.
Possibilities and limits of reforms
24. Public interest civil society actors have been on a constant mission to enforce compliance and end abuses. This has had some successes: It has always been hard to expel the corporation when guilty.
Limiting the debate
25. MSIs try to narrow the debate in ideological terms and to limit discussions to encouraging corporate engagement in resolving a solution. This means that laws or regulations banning certain practices or operations or introducing liability and enforcement mechanisms may not be considered and attempts in that direction are actively rejected.
26. This does not necessarily tackle the larger problem. The result is a fragmented response to issues of HR and sustainability.
27. Most of all, MSIs exclude the voices of communities with more radical proposals of dealing with the crises that may curtail the power of powerful actors. Also, if civil society partners decide more radical measures are needed, they are excluded or forced to resign.
28. The involvement of corporations as joint decision makers in arenas from which they will profit makes them guilty of conflicts of interest and reinforces a process of corporate capture of states and of democracy. Corporate self-interest is built into the multistakeholder approach. It also encourages states towards positions that favor corporate interests and allow them to evade their obligation to protect the affected communities. This is why some civil society movements refuse to engage in MSIs, and instead call for the removal of businesses from discussions –most of all decisions from which they can profit. They argue that private actors must not be determining public interest, since they do not have representative mandates and, therefore, are undermining democracy.
Working from the inside (and outside)
29. Those that continue to be involved in MSIs or support them argue that they are the only governance structures currently making any progress on critical social and environmental concerns, compared to largely stalled multilateral efforts. They also point to the many countries that are pushing for these standards and agreements, arguing that if you got rid of them you would still have communities affected by corporations and supply chains.
30. Advocates of needed reforms, among other, propose:
• Building MSIs from the ground-up by centering the role of claim holders and communities, or their local representatives and ensuring that they are engaged in the design and operation of initiatives.
• Those most affected to be represented at the highest governance levels with more voting weight given to them than to more powerful groups.
• Developing enforceable and binding standards that allow claim holders and communities to legally hold corporations to account.
• Integrating communities’ free, prior and informed consent into implementation and ensuring that this is complied with.
• Grievance mechanisms that are transparent, consistent and culturally-specific. (Complaint mechanisms could also involve the UN to provide a neutral non-conflicted arena for accountability).
• Inclusion of remedy funds as part of certification processes.
• A rule book of best practices to provide more transparency and improved accountability and a minimum threshold that blacklists MSIs that do not meet it.
• Outside public interest civil society alliances to put pressure on MSIs.
31. Those focused on challenging MSIs propose:
• Analyzing, documenting and exposing conflicts of interest.
• Highlighting the unintended risks and side-effects of investment of resources by MSIs.
• Staying out of MSIs and pushing for alternatives for policy-development and standard-setting options.
• Limiting MSIs to technical tasks and consultations carried out transparently within legal frameworks determined by the public interest.
Soft law and hard law
32. What is the role of soft and hard law in making changes in corporate behavior towards compliance with HR? Most MSIs are engaged in complying with soft-law standards. But it is hard law that is actual binding as a legal instrument.
33. Many of the corporations advocating for soft law in MSIs also lobby against any hard laws. This is particularly the case when the hard law involves any redistribution of power. For them, accepting transparency is one thing; accepting any challenges to ownership or profit-making is quite another.
Future of multistakeholderism
34. In the space of less than two decades, multistakeholderism has emerged as an ever more present form of governance. MSIs are becoming the default mode for decision-making on difficult subjects.
35. Striking evidence for this can be seen in the way partnerships have become one of the UN’s SDGs. The UN increasingly seems happy to set goals and allow multistakeholder partnerships to carry them out –most recently evident in the UN Secretary General’s July 2019 partnership agreement with the corporate-dominated World Economic Forum that commits to accelerating the implementation of the 2030 Agenda for Sustainable Development. [FAO recently also signed an agreement with DANONE]. Multistakeholderism is also strongly supported by the development aid of prominent Northern donor governments.
36. Finance in particular is emerging as a key vehicle for expansion of multistakeholderism and the systematic undermining of the HR system. The narrative that private investment is necessary has led to many initiatives from G20 and other fora for blended public-private finance and accompanying governance models. Many of these do not even have any mechanisms for social participation. […and there is pitifully scanty evidence the such investment has been of any scale].
37. There is also a question as to how the rise of reactionary nationalist governments will shape the future of multistakeholderism. On the one hand, governments such as Trump’s are in favor of weak, non-regulatory approaches for the private sector. Yet they are also opposed to any form (even soft-law) forms of international cooperation and regulation so are unlikely to be actively promoting multistakeholderism either. So far, the evidence seems to be that if they are private-led (corporate-dominated) partnerships then the US will leave them alone; if they have government involvement they will be undermined!
38. In other words, the trend is towards even less accountable multistakeholder processes. With corporate power unchecked, no matter the nationalist or globalist tendencies of many governments, multistakeholderism is unlikely to disappear even if it may not make a revival until there is an electoral swing back towards more classic neoliberal governments.
Are there alternatives?
39. So what options are there for critics of multistakeholderism? Clearly a simple return to the past multilateral framework is not an option, given that its weaknesses created the vacuum in which multistakeholderism emerged. Are there new and better ways to do global governance? Could public interest civil society set up its own accountable, non-corporate MSIs? Are there different models that can move beyond simple state-participation? What would be needed?
40. There is a strong argument that inventing a parallel process is not the answer given the difficult issues of accountability embedded in all forms of multistakeholder approaches. Rather what is needed is a reinvigoration of multilateralism and of democracy, one in which popular power is prioritized over the power of corporations. This will not only need changes in democratic processes, but also remaking the nature of the corporation so it is governed by criteria other than the primacy of shareholder value and is, further, made legally accountable to the communities and environments in which it operates. There are different ways forward on this –states enforcing existing HR standards, jointly or individually; transforming the legal basis of corporations so that they become accountable to those most affected by their operations rather than to shareholders; and/or turning corporations into publicly owned and operated entities.
41. Another interesting model at the local level is a worker/claim holder-driven multistakeholder process designed by workers and claim holders that puts pressure on duty bearers in order to force changes. It would be claim holder groups that will design a process involving the different parties that will address problems and find solutions. It is not a multistakeholder process, but nevertheless shows what is possible when the power within decision-making structures is balanced away from corporations and towards affected communities.
Claudio Schuftan, Ho Chi Minh City
Your comments are welcome at schuftan@gmail.com
All Readers up to 500+ are available at www.claudioschuftan.com
Postscript/Marginalia
I recommend the following additional reading:
Power in Global Nutrition Governance
https://brill.com/view/journals/gg/25/2/article-p277_8.xml#d4093647e111 or
https://www.researchgate.net/publication/333739251_Power_in_Global_Nutrition_Governance