GSO Commentary — CSR and the WTO

CSR and the WTO: Towards a Fairer Globalization or ‘Misguided Virtue’?

Geneva, Switzerland

Summary of the Panel Discussion

The Geneva Social Observatory convened a panel discussion on corporate social responsibility (CSR) and trade to stimulate a broadened information exchange and participatory dialogue on how CSR can contribute to equitable trade liberalization and development.

Katherine Hagen, the session’s moderator and Managing Director of the GSO, proceeded by asking each participant to describe their work with CSR.  The panelists’ experiences were diverse and ranged from involvement with the EU’s Multi-stakeholder Forum, to sector-specific programs of the Fair Labor Association, to national and community-based initiatives, to work with the UN’s Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Congo.  They also illustrated the special challenges faced by enterprises operating in countries where many of society’s basic needs are not being met.  In Pakistan, for example, the private sector has recently played an active role in a wide-ranging effort to reform the police system.

In discussing how a linkage between CSR and the WTO might ultimately evolve, panelists weighed in on the question of how effective voluntary standards for corporate behavior have been.  There was concurrence that such mechanisms have often been effective – especially in certain sectors – but little agreement over what to do when “good deeds,” as one panelist put it, “aren’t enough.”  Panelists also acknowledged that regulation, per se, was not necessarily undesirable, even to the private sector.  Indeed, to the extent that regulation is associated with market stability, it may be the preferred way to go.

Responding to the calls that some have made for international standardization, panelists singled out the OECD Guidelines for Multinational Enterprises from the plethora of codes and other private initiatives that currently exist.  The Guidelines contain implementation structures even though their language is vague in places.  Relatively speaking, they are more democratically legitimate, too, having been agreed by the representatives of OECD Member States.

Finally, there was much discussion of the fact that CSR in developing countries poses an entirely different series of challenges for all stakeholders, particularly where legal regimes are deficient and democracy doesn’t exist.  Because CSR is a business-led approach, these challenges can be particularly acute for public authorities.  Where to go next?  The emphasis in the EU’s Stakeholder Forums was on removing practical barriers to delivery of CSR.  Some panelists, on the other hand, contended that the emphasis now should be on promoting better coordinating mechanisms between WTO and the UN’s various specialized agencies, e.g. the ILO and UNEP/CBD, i.e. more coherence.   Some said that more, sectorally focused dialogue would be critical to these processes.  Others felt that the time for constructive dialogue had passed and that action was needed to ensure corporate accountability.  All agreed that CSR was never going to solve all the problems associated with poor governance and poverty.

Panelists included: Tricia Feeney – the Director of  Rights and Accountability in Development, and previously with Amnesty International and Oxfam; Auret van Heerden – Executive Director of the Fair Labor Association; Dwight Justice – an ICFTU specialist on multinational enterprises; Hugh Pullen – a representative of the Trade Directorate of the European Commission; Fasihal Karim Siddiqi, Hinopak Motors Ltd. and Employers Federation of Pakistan, and; Michael Stopford  – Head of Global Public Affairs and Government Relations at Syngenta.