Will we reach a European consensus on CSR?
by Emily Trevorrow, BITC commentator on stakeholder engagement
Businesses following the EU debate on regulation of CSR are likely to feel thoroughly confused by the progress, or lack thereof, made in the last five years. Hopes of achieving a consensus through the European Multistakeholder Forum for CSR appear all but lost and it is anyone’s guess as to where the debate will go next.
Underlying the debate is the more disappointing issue of the breakdown in process. Multistakeholder dialogues are widely used as a tool for bringing businesses and NGOs together on issues of responsible business practice: one can only hope that those active stakeholders in this process will not be discouraged from participating in future forums.
The European Multistakeholder Forum for CSR was established by the European Union in 2002, it ran for 20 months, involving stakeholders representing non-governmental organisations, trade unions and businesses. The intention of the Forum was to develop a common understanding among stakeholders on a European framework for corporate social responsibility.
Common debate throughout the work of the Multistakeholder Forum related to the level of regulation to be applied to a framework, with NGOs pushing for regulatory measures and businesses rejecting the increased red tape and reduced competitiveness that regulation would bring.
After many meetings, much effort from all engaged and long stints of silence, a ‘European Alliance for Corporate Social Responsibility’ was announced in March 2006 by the Commission as an ‘output’ from the Multistakeholder Forum. The Alliance invites European enterprises of all sizes to voluntarily express their support to bring existing and new CSR initiatives under one umbrella.
Commission Vice-President Günter Verheugen, responsible for enterprise and industry policy said: “The Commission has opted for a voluntary approach which is more effective and less bureaucratic. Since CSR is about voluntary business behaviour, we can only encourage it if we work with business.”
However, NGOs under the umbrella of the European Coalition for Corporate Justice (which includes Friends of the Earth, Amnesty International, Social Platform, Oxfam etc) rejected this as an outcome of the work of the Multistakeholder Forum. They claim the Commission had sided entirely with the business agenda effectively ignoring their input to the dialogue. As a result NGOs have pulled out of the Multistakeholder Forum, boycotting the latest meeting in December 2006, and running an alternative event the day before entitled ‘Towards a regulatory approach to CSR’.
The business community, on the whole, is welcoming the Business Alliance which, at least, demonstrates recognition from the Commission of the importance of responsible business practice. And through its proposed programme of CSR ‘Laboratories’ provides businesses with a platform to demonstrate their progress in this field to a European audience. However, the lack of funding or resource for the Alliance from the Commission raises further questions of how deep this commitment runs. The opinion of the European Coalition for Corporate Justice is that in the absence of mandatory criteria the Alliance will have limited impact on improving corporate accountability.
Having separated onto different paths, the NGOs and businesses now face significant challenges. The businesses must demonstrate that a voluntary approach can be effective, and in doing so address the substantive issues that NGOs say should be legislated. The NGOs, must consider whether their absence in the forum will have an impact or isolate them and damage their cause. If they conclude the latter they may seek ways to positively re-engage on the work now being done rather than being critics on the sideline.
The root cause of this breakdown can be speculated upon, but the differing expectations of the participants at the outset of the process must have been a significant factor. Whether a consensus will ever be reached between these stakeholders is immaterial, an effective and genuine stakeholder process will manage expectations and demonstrate transparency in the response to all its participants. These two fundamental principles were missing in this case leaving the reputation of the EU and the concept of the multistakeholder dialogue damaged.
