Karaki, K. 2017. Don’t expect perfection but progress! Multi-stakeholder initiatives to foster responsible business conduct. ECDPM Talking Points Blog, 28 September 2017.
Private sector engagement for sustainable development has become a key concept among development community practitioners and a cross-cutting issue, as underlined by the Sustainable Development Goals (SDGs). The key focus is not anymore on why policymakers should engage the private sector in development but rather how to do it and make it work in practice.
In this context, European actors have placed a great emphasis on the responsibilisation of global value chains – which represent 70% of global trade today, leading to the adoption of the responsible business conduct (RBC) agenda, as initiated by the OECD. This agenda, fueled by the interests of the public, private and civil society sectors, has developed into several regulations and policies. These include among other things the UN Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises, African and European and EU member states’ guidelines, EU Directive on non-financial reporting, or the UK Modern Slavery Act. It also fostered the creation of tools (e.g. Human Rights Impact Assessment) designed by and/or for the private sector – often with the support of civil society organisations (CSOs).
Although there might be questions on the coherence and harmonisation of all these initiatives, the RBC agenda has produced some significant results. A key one is that the UN Guiding Principles on Business and Human Rights is now a recognised international framework that applies to all parties, whether public or private.
While these developments are encouraging, the implementation of the RBC agenda on the ground remains particularly slow. A representative of the UN Working Group on Business and Human Rights once defined it as a “drop of water in the ocean”, leading to the following questions: what are the challenges for the implementation of these guidelines and regulations? How can policymakers go further to foster effectively the RBC agenda, thus filling the gap between policy and practice?
Policymakers are exploring alternative ways – beyond legislation – to encourage the implementation of the RBC agenda notably by providing incentives for business to comply with its guidelines. These may include, amongst other things, responsible business procurement policies and the operationalisation documents of RBC policy guidelines. But they are also increasingly supporting sectoral Multi-Stakeholder Initiatives (MSIs), which are flourishing in Europe.
Sectoral MSIs, such as multi-stakeholder initiatives and platforms aiming to address sustainability issues related to a specific sector, have attracted significant attention, as witnessed by the recent initiatives, for example, in the textile sector in Germany’s Partnership for Sustainable Textile or the Netherlands’ Sustainable Garment and Textile Agreement. This approach to responsible business conduct is promoted as an alternative to the traditional binding and non-binding guidelines instruments, with two particular advantages.
First of all, MSIs can foster dialogue and cooperation between key stakeholders in the industry. Secondly, they reflect and integrate better the interests of the key players, be it from the public, private or civil society sectors, when addressing sectoral issues. This is crucial to ultimately achieve an outcome that is both desirable and feasible for all actors around the table. This process also shifts the focus from a do-or-die type of approach to one of constructive partnerships and continuous improvement.
Policymakers use MSIs to learn about businesses, and CSOs opportunities and constraints in addressing specific issues which, in turn, can feed in their own policies. This may result in turn in (appropriate) binding and/or non-binding regulations to scale up responsible business practice effectively at the sectoral level while leaving room for CSO and business ownership and constructive engagement. The actors from the private sector, including SMEs, who tend to favour non-binding approaches, use the MSIs to share information and experience about specific issues, thus building knowledge and capacities; and in some instances benefit, as a group, from a better leverage to deal with sustainability issues with their suppliers. Finally, CSOs use MSIs as a platform to influence and push businesses to go the extra mile in terms of sustainability both in their capacity as a watchdog and as capacity-building support organisations.
While MSIs can be a highly relevant avenue to foster the Responsible Business Conduct agenda, they are a complex and resource-consuming process to support and maintain. At a recent event in Paris, a representative from the German Partnership for Sustainable Textile, for example, acknowledged the difficulties of satisfying all stakeholders’ interests and priorities; and raised concerns over the lack of a level playing field where German textile businesses have to implement responsible practice, while other EU member states’ businesses do less.
This, in turn, raises at least four issues. First, there is the need to better understand the pros and cons of sectoral MSIs in relation to legislation, to assess when such approach becomes desirable and feasible. Secondly, there is also a need to draw lessons learned from sectoral MSI that have worked (or not) and to look at the underlying policy implications that could help MSIs become more effective in the future. Thirdly, we need to understand better how EU Member States’ sectoral MSIs connect and align with each other, and how these then relate to the EU level – if such development is desirable. Last but not least, it is also important to clarify how competition law can allow sector-wide sustainability commitments, as this will become a serious obstacle to the implementation of the UNGPs and the SDGs. These are hence some of the key issues that need to be addressed to better understand and work around the complexity that characterises sectoral MSIs, and to make them work in practice.
ECDPM intends to contribute and support initiatives focused on responsible business conduct and MSIs, by providing independent and objective policy analysis, advice and dialogue facilitation.
The author would like to acknowledge Sabine de Bruijn from the International Labour Organisation for reviewing this blog.
The views expressed here are those of the author and not necessarily those of ECDPM.
In addition to structural support by ECDPM’s institutional partners: The Netherlands, Belgium, Estonia, Finland, Ireland, Luxembourg, Sweden, Switzerland, Denmark and Austria, this publication also benefits from funding by UK aid from the Department for international Development (DFID), United Kingdom.