|Business Responsibility for Sustainable Development (UNRISD, 2000, 62 p.)|
|V. Moving Forward|
The growing popularity of voluntary initiatives derives partly from a widespread perception that nation states have become weaker, lack capacity to implement so-called command and control regulations and, at any rate, should be freeing up rather than controlling the market. The pendulum swing away from stricter forms of regulation is evident not only at the level of some national governments, but also in the international arena. It was symbolized to some extent by the demise of the United Nations Centre on Transnational Corporations (UNCTC) in the early 1990s, and reinforced in 1999 when the Secretary-General proposed to representatives of big business gathered at the World Economic Forum in Davos a compact in which the United Nations would support the idea of an international trade and investment regime largely free of social and environmental clauses. In return he called on the business community to take voluntary initiatives to uphold human rights and labour and environmental standards (Annan, 1999).
Research on issues of corporate environmental and social responsibility suggests - as does the very heated global debate on this issue - that it may be too early to declare international trade and investment rmes off-limits to further social and environmental standards. While there are certainly some corporations and sectors of business that may be prepared to heed the call for greater responsibility or corporate citizenship, there are a great many more that will respond weakly, if at all.
There are important benefits that can derive from voluntary initiatives, but, in some contexts, there may also be a considerable downside, most notably perhaps for countries of the South. The way in which voluntary initiatives are being promoted raises several important concerns in relation to the challenge of promoting sustainable development, some of which were noted earlier:
· Voluntary initiatives are often drawn up without regard to principles of transparency, independent verification and worker/community participation, as well as core international standards to protect labour, the environment and human rights. As pointed out by the NGO Taskforce on Business and Industry (ToBI),42 these types of closed agreements often result in noncompliance, double standards, inadequate targets or standards, or greenwashing (ToBI, 1997).
42 ToBI is an international collaborative network of NGOs established in 1996 with the original purpose of preparing an independent assessment of corporate conduct, responsibility and accountability for the five-year review of the Earth Summit in 1997.
· Voluntary initiatives have mainly been adopted in the richer industrialized countries. Their apparent success in a number of countries has been contingent on certain institutional conditions associated, for example, with the growth of green or ethical markets, pressures associated with the NGO sector and the relative autonomy and power of certain state institutions. Such conditions are often absent in many developing countries where consumer power may be relatively weak, state regulatory authorities may lack independence, as well as basic enforcement and monitoring capacity, essential laws related to disclosure and freedom of information may not be in place or enforced, and the NGO movement may be relatively weak or absorbed in service-delivery activities (Hanks, 1999; UNRISD and UNA, 1998).
· It is often assumed that voluntary initiatives should and can be adopted across very different product sectors. With globalization and the increasing global reach of TNCs and changing forms of corporate organizational structures, extensive and complex product or commodity chains have developed in many sectors (Gereffi et al., 1994). Participating in these chains are very different types of actors, with very different capacities to respond to environmental and social concerns and subject to very different pressures, opportunities and constraints (von Moltke et al., 1998). The feasibility of adopting voluntary initiatives across the board and their capacity to translate into improved corporate environmental and social performance can vary considerably in different sectoral contexts.
· Some of the major voluntary initiatives associated with the promotion of corporate environmental and social responsibility in the South have been essentially designed by Northern actors. Corporate interests, often acting through business and industry associations, are becoming increasingly influential in international decision-making processes associated with the design of environmental and social standards. Business-NGO partnerships, which attempt to modify the way corporations operate in the South, involve primarily Northern NGOs. Some Northern NGOs claim to speak on behalf of Southern interests, but fail to effectively involve Southern NGOs in their decision-making and consultation processes (Murphy and Bendell, 1999).
· Historically, progress associated with corporate social and environmental responsibility has been driven, to a large extent, by state regulation, trade union activism and collective bargaining. Increasing reliance on voluntary initiatives may be undermining these drivers of corporate responsibility. Such initiatives are often presented as effective alternatives to state regulation, when in fact their success in many industrialized countries has often involved an important regulatory component (Porter and van der Linde, 1995). Furthermore, the NGO sector, which is promoting voluntary initiatives, sometimes minimizes the involvement of trade unions or even attempts to substitute for them in dealings with TNCs. There are concerns that the task of defining and assessing workers rights is shifting away from states and unions to companies, auditors and NGOs. Indeed, some companies appear to have adopted codes of conduct as part of strategy to minimize and weaken the role of trade unions preferring to offer a paternalistic package than to have a recognized negotiating body to deal with (Gallin, 1999b).
· Voluntary initiatives associated, for example, with codes of conduct, environmental certification and eco-labelling, may have certain negative developmental implications in terms of acting as a non-tariff trade barrier and restricting Southern access to Northern markets and the ability of smaller companies to compete (UNCTAD, 1999; Zarrilli et al., 1997). In practice, it is often larger and (managerially) more sophisticated companies in developing countries that can meet their norms. In certain product chains, smaller firms are being squeezed out given the difficulties they encounter in complying with environmental standards (UNCTAD and SGS, 1998).