Aug 152017
 
 August 15, 2017

In a new report that builds on a publicly-available database of transnational, standard-setting initiatives regulating corporate conduct, research from the Duke Human Rights Center at the Kenan Institute for Ethics and MSI Integrity suggests voluntary initiatives that connect governments, NGOs, and private companies may not have the institutional elements required to effectively enforce their own standards related to responsible conduct, including respect for human rights.

These multi-stakeholder initiatives, also known as MSIs, aim to improve company or government compliance with a voluntary set of standards for responsible conduct, which can include human rights, environmental, and anti-corruption norms. These standards often outline company or government responsibilities to respect the rights of an identifiable stakeholder group, such as workers, farmers, or communities living in an area affected by business operations.

However, an analysis by the Duke Human Rights Center and MSI Integrity shows that only 14 percent of organizations surveyed for the new database involve any members of the populations they are intended to benefit or protect in their decision-making bodies. Additionally, only half the MSIs involve affected communities in any activities at all. The ramifications of this means that, in the process of attempting to improve corporate conduct, people with the most at stake often end up being the most marginalized.

“Before we conducted this study, many scholars assumed that all these MSIs look good on paper and the real question concerns what they are doing in practice,” said Suzanne Katzenstein, Research Scholar and Project Director at the Duke Human Rights Center. “But even on paper, there’s reason to be troubled.”

Part of the problem, Katzenstein noted, is a lack of transparency. Although 78 percent of MSIs have some form of sanctioning provision to hold members accountable if they don’t live up to standards, it’s difficult to know when the use of sanctions is warranted. This is because one in four MSIs does not require documentation of its evaluations. Of MSIs that do document corporate compliance, 63 percent do not make their evaluations publicly available, making it difficult for external actors to assess if an initiative has used its sanctioning mechanism sufficiently or appropriately.

Although the premise of many MSIs is to facilitate meaningful and relatively equal participation by different types of stakeholders to address a particular issue, 40 percent of MSIs in the database had highly imbalanced representation of stakeholder groups – meaning that one stakeholder group outnumbered any other in the initiative’s highest decision-making body by a ratio of two-to-one or greater. In these instances, governments, private companies or NGOs that have more representation in the initiative’s decision-making body may overpower the voices of other groups and guide the initiative’s agenda towards a particular group’s interests. In three MSIs, industry representatives outnumbered other stakeholders on the initiative’s highest decision-making body by a ratio of four-to-one: ICTI Care Process, Program for Endorsement of Forest Certification, and Roundtable on Sustainable Palm Oil.

“The innovation of MSIs is that they bring together a diverse set of actors to hold companies and sometimes governments accountable,” Katzenstein said. “But when they’re dominated by one kind of stakeholder, outcomes can become skewed. Although both practitioners and academics have pointed to the need to fine-tune MSIs, this research suggests there is a need to re-think more seriously how to engage and improve MSIs.”

Data used in the report was collected by a Kenan service-learning class, Business and Human Rights Advocacy Lab, in the spring of 2015 and 2016. The 2015 class worked on piloting the research methodology and the 2016 class implemented the final methodology to collect the data. Students also conducted short case studies on the MSIs they researched.

Visit the MSI Database to see the full report. MSIs in the database engage with over 50 national governments and regulate over 9,000 companies – including Fortune Global 500 businesses with combined annual revenues of more than $5.4 trillion dollars.