Seeking a ‘Smart Mix’: Multi-Stakeholder Initiatives and Mandatory Human Rights Due Diligence

Who’s behind it? – Geneva Center for Business & Human Rights | NYU Stern Center for Business and Human Rights (2021)

How can it help? – This white paper finds that multi-stakeholder initiatives (MSIs) are critical for the protection of labor rights in supply chains across the world, and makes recommendations to ensure they are effectively involved in helping governments craft human rights legislation. 

The paper asserts that strong MSIs – those that bring together civil society groups, labor unions and companies to set and enforce labor standards in supply chains – are critical for the implementation of mHRDD by governments around the world. It insists that these MSIs should serve as an essential substantive resource to national governments and supranational bodies, like the European Union, that have the power to set and enforce adequate labor standards, and the responsibility to do so. The paper recommends that governments pursuing mHRDD legislation turn to MSIs to inform and provide guidance on legislative requirements. Without this guidance, workers in global supply chains will remain highly vulnerable.

Recognizing that not all MSIs are created equal, the paper identifies a “typology” of five requirements that all MSIs should follow. It concludes that MSIs that abide by all five requirements should be seen as a reliable resource for governments and policymakers:

1. Governance: The governing bodies of MSIs should reflect all relevant stakeholders—civil society, labor and companies—and give each of them equal decision-making power.
2. Standards: All standards and benchmarks set by MSIs should accord with international law and be informed by relevant industry-specific technical expertise.
3. Monitoring: All benchmark metrics set by MSIs must be established with independent monitoring mechanisms in place to ensure compliance.
4. Penalties: Rules and benchmarks set by MSIs must be mandatory and sanctions must be enforceable for violations, with an escalating scale of penalties, all the way up to expulsion.
5. Transparency: MSIs must demand a reasonable degree of transparency from companies to ensure they are accountable to the public.