Sectoral multi-stakeholder initiatives at EU level: quo vadis?
Multi-stakeholder initiatives (MSIs) bring together actors such as businesses and business associations, trade unions, government and NGOs to define joint goals and measures to make global value chains more sustainable and inclusive. Just in the last 14 months, the Dutch government has actively committed to several sectoral responsible business conduct (RBC) agreements. So far, agreements have been signed in the areas of garment, gold, banking, forestry and vegetable protein. In the same vein, Germany has put in place a multi-stakeholder Partnership for Sustainable Textiles and the German Initiative on Sustainable Cocoa.
This fits with the new European Consensus on Development, which puts partnerships at the heart of the EU’s approach to the implementation of the 2030 Agenda and its Sustainable Development Goals (SDGs). The support to MSIs is also in line with the Council Conclusions on the EU and Global Value Chains (GVCs), adopted by EU Member States in May 2016, which emphasise that “the EU and its Member States can leverage their position to make Global Value Chains more sustainable and inclusive in particular in those markets in which the poorest make their living”. As part of this agenda, the Council Conclusions refer to promoting multi-stakeholder approaches in the EU and partner countries at all levels and invite the European Commission to support such initiatives.
Regardless of the Council Conclusions, however, a variety of stakeholders, including some EU Member States, find that too little is currently done at the EU level to promote the RBC agenda and facilitate MSIs. While recognising that some efforts have been made in the last few years – for example, the EU Directive on Non-Financial Reporting – they claim, as I heard in several meetings, that the Commission is rather ‘inactive’ when it comes to RBC. The EU Action Plan on CSR/RBC, which has long been promised by the Commission but has not yet been issued, is a case in point. The Commission is specifically accused of failing to facilitate MSIs lesson-sharing among the EU Member States to scale up MSIs to the EU level, and/or to contribute to a more enabling environment for MSIs to flourish.
This inertia may be due to the fact that traditionally EU institutions are more geared towards policy-making – as are many national governments by the way; there is also pressure to spend allocated funds accompanied by ad hoc public consultations rather than engaging in the complex process of long-term multi-stakeholder cooperation. Also, by its very nature, Responsible Business Conduct in global value chains relates to the domain of different Directorates-Generals of the European Commission, hence making the need for leadership, ownership and coordination even more difficult to fulfil.
But beyond these institutional explanatory factors, is there an actual added value and need to promote Responsible Business Conduct through multi-stakeholder initiatives at EU level? Those pushing for a stronger EU involvement highlight three main reasons for doing so:
EU initiatives bring national ones to scale: they have the potential to allow over 500 million customers in the EU to gain easier access to products stemming from better working conditions and less environmental damage. EU export markets also benefit. Furthermore, joining forces at EU level can provide more leverage to influence suppliers to improve production practices, and encourage and support source-country governments to set the conditions.
A European rather than a national approach creates a more extensive level playing field avoiding a comparative advantage for companies from Member States that are not engaged in MSIs. It also makes it easier for multinationals to engage, as they are often operating across EU borders.
EU institutions are well placed to promote and facilitate the sharing of lessons from national and local MSIs.
Having said that, others see an equal number of reasons for a wait-and-see EU approach: it is too early to assess the effectiveness of most existing multi-stakeholder initiatives in supporting the RBC agenda. The German Partnership for Sustainable Textiles was launched in October 2014, and the businesses that joined it only recently produced their first tangible action plan for 2017. The oldest Dutch sectoral multi-stakeholder initiative is one year old, and companies have just submitted their action plans to the initiative’s secretariat for scrutiny and potential joint follow-up action. Over time, results will depend on the set-up, the level of ambition and the actual implementation efforts of its participants. Some initiatives have already been criticised for the lack of enforcement mechanisms and transparency.
Some argue that MSIs can be a useful tool to accompany due diligence legislation, but they should not substitute it. According to this logic, as it stands, the recently agreed Dutch MSI in the gold sector is a welcomed support to the implementation of the EU Conflict Minerals Regulation, while the Dutch MSIs on Garments and Textiles with no due diligence legislation, is not. Others disagree, arguing that MSIs can also flourish without due diligence legislation.
One other issue is cost. Facilitation of MSIs requires resources and some question whether they provide good value for EU taxpayers' money.
While EU policy documents have embraced the concept of multi-stakeholder partnerships for the implementation of the SDGs, it is still unclear to what extent and how it will promote MSIs at the EU level. Actors involved should explore, weigh and debate the pros and cons and, importantly, put their conclusions into action.
See also Karim Karaki’s blog ‘Don’t expect perfection but progress! Multi-stakeholder initiatives to foster responsible business conduct
The views expressed here are those of the author and not necessarily those of ECDPM.