There is, broadly speaking, an international consensus that
the voluntary approach to corporate social responsibility is the best
way forward. But for how much longer? In recent weeks pressure groups
have challenged three key planks in the international framework of
voluntary initiatives to promote responsible corporate behaviour.
The fragile consensus to eschew further regulation reached in the
European Union’s multi-stakeholder forum has been rudely shattered by
non-governmental organizations insisting that, in their view, this is
out of the question (see page five).
That creates a ticklish problem for the European Commission, which has
promised to publish a second white paper this year, outlining a policy
that was to have been informed by the forum’s deliberations. Do not
expect this document to appear on schedule.
Then there is
the Global Compact. Its officials have always been extremely sensitive
to any suggestion that signatories should in any way be called to
account for failing to match up to the ten principles it enshrines, but
disillusionment in some quarters has now reached such a pitch that
influential groups in civil society think it should be scrapped (see page eight).
Finally, there are the Organization for Economic Co-operation and
Development guidelines for multinational enterprises. The process for
handling complaints brought against companies barely matches up to the
principles of visibility, accessibility, accountability and
transparency that the OECD says should inform the process, at least in
the UK. And the UK by no means has the worst record in this regard (see page nine).
The Compact and the EU multistakeholder forum can at least claim
teething problems – both are in their infancy. The OECD guidelines,
which have been around since the 1970s and undergone revisions, cannot.
NGOs like to whinge. But consultants are now voicing similar concerns
and, crucially, so are some companies. It is frustrating to join an
exclusive club only to discover that membership is in fact open to
anyone who can sign their name, and that there is no mechanism for
expelling those who break club rules. This seems to be the case with
the Global Compact.
The danger is that frustration will
turn to disillusionment. To avoid this happening, there is an urgent
need for more effective, and more transparent, mechanisms to police
voluntary initiatives. To those who say that this goes against the
spirit of voluntarism, the best response is that it is preferable to
regulation. The paradox of the voluntary approach is that it cannot be
said to have failed until it can be shown to be working.
