Corporate Responsibility & Accountability

Background

The accountability problem

As a prelude to the turning millennium, protests in Seattle at the meeting of the World Trade Organization focused public attention on increasing concerns about economic globalization and the expanding reach and influence of multinational corporations. As the power of the transnational private sector is increasing, so is degradation of the environment, the gap between rich and poor, and the pressure on local communities to weaken their environmental and social regulations and reduce social services in order to mould their economies to the demands of affluent consumers in the industrialized countries.

Rather than develop a more effective global monitoring and regulatory system to ensure accountability of TNCs, the trend is towards greater deregulation, encouragement of trade liberalization and privatization, and protection of corporate rights. A particular trend is promotion of the argument that corporations can regulate their own behavior through voluntary initiatives and unmonitored codes of conduct. While civil society groups are increasingly mobilizing to advocate greater accountability, there tends to be more emphasis on criticism than advocacy of effective and appropriate accountability mechanisms.

Between 1996 and 2002, ISF's Corporate Accountability program worked primarily through coordination of the NGO Taskforce on Business & Industry (ToBI), an international coalition of environmentalists, consumer protection advocates, development and human rights organizations, a coalition that ISF helped found.

Presenting its collaborative statement and report (Minding Our Business) at the 5th Session of the UN Commission on Sustainable Develpment (CSD), producing the NGO position paper on "Responsible Entrepreneurship" (translated into Arabic, Chinese, French, Russian, and Spanish) at the 6th Session of CSD, ToBI and its trade union allies (ICFTU) convinced the Commission in 1998 to adopt a UN Resolution to develop a multi-stakeholder dialogue to review the voluntary initiatives and agreements that were being put forward, especially by industry groups, as the preferred alternative to regulatory solutions. Rather than simply accept the current assumptions about "voluntary" solutions, the Review would provide a critical examination of corporate efforts to determine of what works vs. what is just words.

On the other hand, ToBI campaigners recognized that words are also the basis of laws and policies as well as speeches and claims. In the context of the UN, to develop and institutionalize this new monitoring mechanism, we would have to use a qualitative different language from the typical environmental or social justice campaign. Rather, we would have to communicate our ideas and priorities using the language of international diplomacy -- a language of global negotiation, of give and take, but also the foundation language for international agreements and law. While perhaps a bit "soft" for many anti-globalization activists, we were attempting to put into place practical institutional mechanisms to bring greater clarity and honesty into the UN's debates about corporate social responsibility and company claims about their contributions to environmental protection, poverty alleviation and human rights.

ISF wrote a paper, "Responsible Actions or Public Relations?" which addressed some of the issues involved with voluntary initiatives for the UN Environment Programme's journal Industry and Environment, Vol. 21, No.21-2 (Jan-June) 1998.

In the spring of 1998, at the CSD's 6th Session, the Commission decided that exploratory work on ToBI's proposed Review would become a key item of their future work. A multi-stakeholder steering group was created, involving representatives of the CSD Bureau, ToBI, the International Confederation of Trade Unions, and the International Chamber of Commerce, which met over a course of two years. This adoption by the CSD Bureau of an NGO-initiated proposal was a notable and rare achievement within the NGO community, who have struggled for years to simply be able to speak at these sessions. The adoption of the ToBI Review proposal was a new success in NGOs efforts to establish a strong and independent critical voice at the United Nations -- where many countries and interest groups would prefer to see us remain passive observers.

In July 1998, ToBI members met in Amsterdam to follow up on this success and to develop our future strategy. In addition to the decision to expand our efforts beyond the CSD to include the OECD (particularly in their review of the OECD Guidelines on Multinational Enteprises), members of the ToBI articulated a set of practical expectations to apply to the "VIA Review" process.

One immediate result was a three-day experts meeting (March 10-12, 1999) held in Toronto, sponored by the UN and Canadian government. The result of this meeting was presented at the 7th Session of the CSD in the Report of the Secretary-General on the Initial Results of the Review of Voluntary Initiatives.

Unfortunately, in 2000, the International Chamber of Commerce managed to derail what would have been a useful accountability tool for monitoring corporate claims about their commitments to sustainability.

Over the course of the seven years in which ToBI was active, its members played a key role in advancing the cause of corporate accountability within the international policy debate, engaging and encouraging government representatives among a range of counties participating in the institutions of the UN Commission on Sustainable Development, the Organization for Economic Cooperation and Development (OECD), and UN Environment Program.

At the World Summit on Sustainable Development, one of ToBI's key objectives was achieved -- to see the United Nations recognize corporate responsibility and accountability as essential elements of sustainable development. In turn, many new and old civil society organizations had also come to raise corporate accountability as a critical priority to be included in all serious efforts to promote sustainable development. As new coalitions, networks and campaigns emerged, ToBI has now retired into the background, its members moving on to new struggles.

With new and changing organizations and campaigns addressing this issue, ToBI retired into the background. Today ISF's corporate accountability work has now been integrated as an important part of our Sustainable Production and Consumption Program.

 

 

 

 

 

 

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