Mapping the Landscape of Multi-Stakeholder Initiatives – Few MSIs Are Equipped to Address Governance Gaps

The business world can’t ignore human rights
July 5, 2017

Over the past 30 years of globalization, it has become increasingly evident that, in many parts of the world, local governments are either unwilling or unable to protect their own people or the planet. This has created governance gaps, which a number of governments, companies, and civil society groups are seeking to address. Increasingly they have recognized the need to work together to tackle common environmental and social challenges, developing a range of global governance models in a world without effective global norms. On parallel tracks they have formed Multi-Stakeholder Initiatives (MSIs) to combat global warming, corruption, child and forced labor, and a range of other environmental and human rights challenges. There now are various types of MSIs and definitions of what the term “MSI” means, as well as great public interest in how MSIs operate.  

In an effort to catalogue some of these developments, the Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) and the Duke Human Rights Center at the Kenan Institute for Ethics, with the support of the Miller & Chevalier law firm, have published the first detailed directory of transnational standard-setting Multi-Stakeholder Initiatives. This directory currently comprises 45 MSIs that the researchers identified as transnational and standard-setting for corruption, human rights, or environmental challenges.  

The study usefully pools information about each of these MSIs in order to “encourage research and critical reflection into the roles, functions, and effectiveness of MSIs.” This is a commendable pursuit that brings greater visibility to an oversight model that is increasingly common but poorly understood. Scholars are only beginning to investigate factors that may affect whether MSIs succeed, such as their organizational design. The initiative’s mapping effort reveals that only a handful of MSIs have the necessary organizational design and mechanisms in place to define and enforce standards.

Insights from the database

The research team has written explicitly that their directory “does not evaluate, rate, or rank MSIs, nor does it assess the impact or effectiveness of MSIs.” They focus on seven different data categories: (1) compliance evaluations, (2) external complaints mechanisms, (3) references to international law, (4) engagement with affected populations, (5) public reporting, (6) sanctions, and (7) standards.

 MSIs must have defined environmental or human rights standards to be included in the database. However, only 35 of the 45 MSIs make any reference to relevant international law. Only 39 of these MSIs assess compliance with whatever standard they have adopted.  Strangely, the “compliance evaluations” category collapses “assessments,” “audits,” and “verification,” even though these are very different creatures. It would be better for this new guide to catalogue monitoring and verification elements separately because not many MSIs actually verify how companies are remedying identified shortcomings. 

The project also shows that only about half of the MSIs engage with individuals whom they aim to help or who will be impacted by their work, and only about a third possess an external complaints mechanism.  Most strikingly, only 18 of these MSIs commit to public reporting, which is arguably the most important condition for ensuring public accountability.

The presentation of this data implies that more activity across the seven data categories automatically leads to better results. To date, only six MSIs have activities across all seven data categories: Fair Wear Foundation, Forest Stewardship Council, Marine Stewardship Council. Rainforest Alliance, Roundtable on Sustainable Biomaterials and the Roundtable on Sustainable Palm Oil. But it is unclear that these are the most effective MSIs.

So what does this mean?  

First, it is important to understand that the database has major limitations, most of which the researchers themselves acknowledge (see here). 

1.    The project is unable to assess the quality of the organizational features that it tracks. It therefore remains unclear whether, for example, a complaints mechanism actually resolves conflicts or if it is a provision that exists on paper only. The researchers also rightly point out that it is beyond the project to assess the rigor or impact of the MSI standard. Whether an MSI effectively addresses a governance gap is not assessed.

2.    The assessments were made based on publicly available information only. However, the small budgets of most MSIs certainly affect their ability to communicate. Some MSIs may simply not have the resources to keep public records of all aspects of their work. Moreover, informal processes and networks may be more useful for the culture of these MSIs than formal and documented structures. The chosen research methodology cannot capture the importance of collaboration among often highly heterogeneous stakeholders.

3.    The chosen data categories were selected based on expert consultations. Yet whether these are truly the critical data points that are relevant for the success of MSIs requires further research. The directory also presents the seven data categories as if they are equally important, an unproven assumption. Some categories are also quite crude and encompass either too much or too little specific information. Whether the resulting information is sufficiently detailed to serve researchers (one target audience of the database) remains to be seen.

Because organizations that call themselves MSIs are mushrooming, further research is necessary to make distinctions among them and identify the few MSIs that deserve support. Despite its limitations, this project shows that the universe of MSIs that have the building blocks in place to have a meaningful impact remains very small.  

The website of the project claims that the 45 MSIs under review engage over 50 national governments and regulate over 9,000 companies, including more than 65 Fortune Global 500 businesses with combined annual revenues of over $5.4 trillion dollars. The potential impact of these existing MSIs should be sufficient reason to fine-tune our understanding of MSIs and support their organizational improvement.


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