by Rhodri C. Williams
The march of the voluntary guidelines continues, it seems, with new approaches geared to address gaps in earlier efforts to urge corporate self-control. As Peter Spiro noted some time back in Opinio Juris (and Chris Huggins pointed out in these pages), the promotion of “soft” voluntary standards as a means of getting at some very hard human rights violations is still seen with skepticism in many quarters.
Nevertheless, Mark Taylor makes an engaging case for such standards in a recent Open Democracy piece on the role of natural resource extraction in fueling conflict. The article highlights the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas, a standard adopted by the Organization for Economic Cooperation and Development (OECD) in May 2011 and subsequently regulated in the US through new regulations issued by the Securities and Exchange Commission (SEC) under the Dodd-Frank Wall Street Reform Act.
Taylor notes several key insights that have emerged in the wake of older certification schemes such as the Kimberly Process for conflict diamonds. These include the manner in which both illicit inflows into conflict areas (such as small arms) and outflows (such as natural resources) have become incorporated into global market flows, as well as the extent to which vulnerable local populations may be just as dependent on extraction activities for their survival as warlords are for their arms budget. In light of such factors, Taylor argues that considerable advantages may be derived from focusing on business actors rather than states:
Like the Kimberly Process, or even UN sanctions, the Guidance seeks to exclude certain commodities from global trade flows. But there the similarity ends. Instead of obligating states, the Guidance places the responsibility on business to manage their supply chains. Instead of relying on a certification regime hobbled by a lack of state capacity, the Guidance deploys the concept of business due diligence, the practice of self-investigation and risk management in a business activity. And instead of targeting a commodity based on its association with rebel groups – a definition that has plagued the Kimberly Process, for example preventing it from taking action where abuses are committed by state armed forces, as in the case of Zimbabwe – the Guidance in effect focuses on the problems of conflict financing and human rights abuse associated with mineral extraction, regardless of whether the perpetrator is a state or non-state armed group.
In effect, the Guidance places the onus on businesses to show they are not financing conflict or contributing to human rights abuse through their sourcing of minerals. And nothing in the Guidance prevents states from regulating this responsibility to conduct due diligence, which is precisely what the US has done with the conflict minerals provision of Dodd-Frank, a measure the EU is now considering.
The combined reliance on traditional state regulation and more novel forms of corporate self-regulation is promising though not, as Taylor points out, unproblematic. However, even at this early stage, there may be timely lessons that could be drawn by the UN Food and Agricultural Organization (FAO) in its current efforts to develop a set of ‘demand side’ standards regulating the conduct of actors participating in large-scale land investments in developing countries. This process should be facilitated by the fact that the FAO has already launched a set of ‘supply side’ guidelines for countries that are the object of such investment. While the latter clearly addressed state authorities disposing over targeted land, the former will need to take into account the role of both state and powerful non-state actors whose investments are driving the global land-rush.
Finally, in a timely reminder that such policies and safeguards are often only as effective as the advocates that monitor their application, Inclusive Development International issued a press release announcing a complaint before the Asian Development Bank’s Compliance Review Panel. The complaint alleges a violation of the Bank’s involuntary settlement policies with regard to communities affected by an ADB-funded railway rehabilitation project in Cambodia (on which, see Natalie Bugalski’s guest postings here and here). As such, it recalls the ongoing controversy in Cambodia over the World Bank’s attempts to act on a finding by its own Inspection Panel of a violation of its Resettlement Policy.
Risk calculation and blood sugar – Can CSR arguments get a handle on the global land-rush?
by Rhodri C. Williams
The nearly 18 months that have passed since David Pred wrote in this blog about industrial sugarcane production and land-grabbing in Cambodia have been dramatic ones in the area of corporate social responsibility (CSR).
Perhaps most notably, the tragic and entirely predictable collapse of the Rana Plaza garment factory in Dhaka, Bangladesh last May galvanized a process of negotiating binding arbitration agreements between corporations and labor unions with participation by the International Labor Organization (ILO). The resulting “Accord on Fire and Building Safety in Bangladesh” was described by Peter Spiro in Opinio Juris as “a signal episode in the continuing evolution of global corporate regulation”:
For better and for worse, the Rana Plaza disaster also generated competing models, with a group of North American retailers unveiling a non-legally binding alternative to the mainly European ‘Accord’ in July. While critics alleged that the latter plan amounted to an attempt by large corporations such as Walmart to co-opt the global CSR movement, US corporations condemned the Accord as rigid, insensitive to the realities of the global textiles market, and (perhaps most tellingly), a potential floodgate for litigation.
These developments indicate that the protracted debate over effective social regulation of global markets (beautifully summarised in this essay by Richard M. Locke) has lurched forward, but is far from over. While experts have raised technical concerns about the arbitration procedures espoused in the Accord, it has nevertheless clearly introduced a new paradigm, planting a new, binding standard in a field dominated by voluntary codes of conduct. However, the competing North American initiative demonstrates the persistence of non-binding commitments that rely on states to regulate the conditions of production, rather than giving workers recourse to the corporations that sit astride global production chains.
Meanwhile, the debate over large-scale acquisition of land in developing countries by foreign states and corporations – the ‘global land rush’ – has rumbled on. In particular light of the extent to which corporations have been actors in the land rush, early indications that the land tenure governance debate would converge with the broader CSR debate appear to have been more than borne out.
Most notably, the UN Food and Agriculture Organization (FAO) recently adopted a well-received set of “Voluntary Guidelines on the Responsible Governance of Tenure“. Though these are frequently referred to generically as ‘land grab guidelines’, they actually focus on the ‘supply side’, setting out duties of care for the authorities that dispose over land subject to investment (for more on the Guidelines, see this dedicated edition of the Land Tenure Journal). Meanwhile, a corresponding set of ‘demand side’ due diligence guidelines for investors – the “Principles for Responsible Agricultural Investments” is currently slated for adoption in 2014.
A similar pattern has emerged in advocacy with, for instance, the Rights and Resource Initiative (RRI) recently having reframed the ‘supply side’ question of State neglect of local tenure rights as a ‘demand side’ problem of corporate risk:
Meanwhile, more concerted efforts are being put into gauging the genuine scale of the problem, most notably through the development of a Land Matrix, a public online database of land deals. However, getting a handle on the scale of the problem, with its often murky and frequently unreported (or reported but unconsumnated) deals remains difficult. Nevertheless, two recent and overlapping insights have involved the extent to which the land rush has penetrated – and destabilized – South-East Asia and the role of the sugar industry and sugarcane in driving large scale land investment.
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Tagged Bangladesh, Cambodia, CSR, EU, FAO, Guatemala, IDI, ILO, land-grabbing, land-rush, natural resources, Oxfam, RRI, sugar