In 1998, the then UK Secretary of State for International Development, Clare Short, did the same with UK companies, unions, and NGOs, which led to the creation of the Ethical Trading Initiative, it adds.
“Reflecting on a decade of research and analysis in the field, the report concludes that this grand experiment has failed,” says a statement by MSI Integrity.
“Voluntary regulation, even when it involves civil society organisations, is insufficient for detecting corporate human rights abuses, holding corporations to account for harm, or providing access to remedy.
“While MSIs can play important roles in building trust and generating dialogue, they are not a substitute for public regulation. Effective government regulation and enforcement is needed to supplement voluntary initiatives at local, national, and international levels.”
The report says many MSIs set weak or narrow standards that overlook the root causes of abuses, employ inadequate mechanisms to detect abuses and uphold their standards, and do not offer access to effective remedy.
Almost a third of the 40 MSIs examined in the study did not have any grievance mechanisms for workers or communities to directly report abuses or resolve complaints.
Of those that did, nearly all failed to meet the internationally recognised criteria for effective access to remedy established by the United Nations Guiding Principles on Business and Human Rights.
The report identifies several lessons to be learned. These include that the workers, communities and individuals directly affected by a business need to be at the centre of initiatives that aim to improve their lives and livelihoods, rather than the top-down approaches used by MSIs.
“As long as company decisions continue to be made by managers or board members who are divorced from experiences on the ground, and who are legally obligated to prioritise the interests and profits of shareholders, businesses will continue to run the unacceptable risk of making decisions that harm people and the planet,” said Amelia Evans, executive director of MSI Integrity.
“It is time to reimagine the corporate structure, and to demand business models that centre workers and communities in their ownership and governance.”
