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December 14, 2020

Rethinking MSIs: Rethinking Corporate Accountability

Posted by Fola Adeleke

A version of this contribution was originally published by Afronomics Law on December 11, 2020.

Earlier this month, investigative journalists disclosed that Indian garment factories responsible for the supply to global supermarket chains such as Marks & Spencer, Tesco, and Ralph Lauren were exploiting their workers. Some of the allegations include poor wages, 22-hour work shifts with no toilet or water breaks. These conditions exist despite the existence of a local law, the Indian Factories Act, which sets out working conditions for workers in this industry. More importantly, the brands that use these suppliers in India are all part of the Ethical Trading Initiative (ETI) that was set up in 1998 shortly after the sweatshop conditions that engulfed major brands such as Nike and Gap in the 1990s.

The ETI is part of a trend known as multi-stakeholder initiatives (MSIs). MSI involve a “collaboration among various public and private actors—such as corporations, governments, CSOs, and rights holders—that have a stake in an issue.” These MSIs set global voluntary industry standards for its members to follow and are often punted as addressing issues of public concern such as human rights violations in specific industries. These MSIs are geared towards establishing a governance model to tackle a gap “where a state either cannot, or will not, fulfill its duty to protect its citizens against human rights violations by companies.” The stated aim of the ETI is to improve working conditions in global supply chains by developing effective approaches to implementing the Base Code of labour practice developed by the initiative.

Despite the increasing popularity of MSIs, it is clear that self-regulation through this governance model is not the answer to driving corporate accountability for matters of public concern such as human rights protection. In a report released in July 2020 by MSI Integrity, a non-profit originally dedicated to understanding the human rights impact and value of MSIs, it was found that MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims’ with access to remedy. The report showed that we need to rethink the role of MSIs and the presence of an MSI in an industry should not be a substitute for public regulation.

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October 9, 2020

Rethinking MSIs: Restructuring MSIs to Improve Social Compliance in Supply Industries

Posted by Zobaida Khan

After the devastating and avoidable collapse of the Rana Plaza in 2013 in Bangladesh, two innovative multi-stakeholder initiatives (MSIs) emerged: the Alliance for Bangladesh Worker Safety (“Alliance”) and the Bangladesh Accord on Building and Fire Safety (“Accord”).

They engaged a diverse group of regulatory actors (local suppliers/producers, foreign buyers, the International Labor Organization, the national government, and activist networks), regulatory mechanisms (for operating, financing and monitoring safety inspections), and detailed standards or rules in order to ensure factory safety for garment workers. Moving beyond voluntary codes of conduct and “Do No Harm” policies, these MSIs introduced significant institutional changes in corporate responsibility. They included stronger sourcing policy, improved safety of factory premises, and public reporting of corporate compliance. Indeed, unlike traditional international standard-setting MSIs, the Accord’s terms were legally binding between brands and trade unions. This is the first time an MSI allowed legal enforcement of its provisions and obligations in a transnational labor regulatory setting. Although the terms of both programs have ended, these MSIs attempted to address the regulatory deficiencies created or overlooked by the national government and the supplier factories.

Yet, with continued evidence of a race to the bottom for wages and working conditions in supplier factories, brands offering cut-rate sourcing prices, and recent reports on the costs to the jobs, health and work entitlements of millions of laborers due to COVID-19-related supply contract cancellations, academic and policy debates are focusing on MSIs’ structural and functional effectiveness and the possibility of restructuring these to deliver social justice oriented results:

  1. How could MSIs be more inclusive in their formation?

  2. How could MSIs lead to long-lasting influence on corporate sourcing policies and improvement of work conditions and entitlements?

Although these issues appear separate, I argue that to properly address diverse compliance challenges in supply chains, there needs to be a coherent and connected restructuring of MSIs that both strengthens their participatory mechanisms and influences the transformation of our liberal market system’s dominant business model.

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July 23, 2020

Rethinking MSIs: Binding Brands to Create Change

Posted by Christie Miedema, Campaign and Outreach Coordinator, Clean Clothes Campaign

When the COVID19 pandemic hit, garment brands and retailers around the world cancelled their orders. What was to them a logical risk and cost reducing measure, meant destitution for millions of garment workers around the world. Public outcry over corporate behavior led a range of brands to quickly mend their ways. However, the question remains why public outcry was even needed. Brands have spent years promoting programs they claim guarantee protection for their workers. So why couldn’t they rely on those?

In the 1970s and 1980s garment brands started to outsource production abroad. This was a step that seemed to have only advantages: lower prices, lax labor regulation, less risk. Reduced to a mere client of garment factories elsewhere in the world, garment brands and retailers could wash their hands of any responsibility for workers – or so they thought.

Enter the rules, but set and monitored by whom?


Following a series of exposés in the 1990s documenting horrific conditions in sweatshops, brands took action to curate codes of conduct and imposed them on supplier factories. This progressed to the emergence of a social auditing industry to oversee suppliers’ compliance, as well as social compliance initiatives to synchronize and oversee these codes, often in the form of voluntary, multi-stakeholder initiatives (MSIs). This all prompts the question: given the tools brands have created to regulate working conditions in the garment industry, why are workers being left to suffer during the pandemic?

The answer lies within the mechanism of these voluntary MSIs. Behind the façade of battling exploitation, MSIs have become little more than a fig leaf for fashion; a tool enabling brands to dictate the rules, while shielding the industry against responsibility and criticism, rather than protecting the workers.

MSIs, which come in different shades of brand-friendliness and ambition, have certainly played a role in normalizing ideas of supply chain responsibility, as well as facilitating discussions between brands, unions, NGOs and other stakeholders. However, as a recent report on supply chain transparency published by the Transparency Pledge Coalition has shown, many MSIs are no longer taking the lead in moving the more unwilling brands towards stronger politics, but are instead surpassed left and right by members who voluntarily go beyond what the MSIs prescribe. Only one MSI was willing to take the challenge of the Transparency Pledge coalition to actually take the lead and make transparency a membership requirement. Another recent report shows that a “soft measure” such as due diligence reporting, remains wanting. And although MSIs’ complaint mechanisms still remain useful avenues for workers and labor rights activists to appeal to if a member brand is unresponsive to resolve a case of labor rights violations, which continues to be tried again and again, the same limitations apply: the outcome is not binding.

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