Ever since Kathy Lee Gifford cried on national television while her husband Frank Gifford handed out $100 bills to random workers in a sweatshop producing garments for Kathy’s clothing line, “corporate social responsibility” has been all the rage. 

“CSR” has become a huge cottage industry – especially in Europe – with scores of corporations adopting “corporate codes of conduct” and establishing “CSR compliance” departments.  Other companies outsource “social audits” of their and contractors’ factories to “third party” auditors including giant transnational accounting firms.  CSR is the subject of several dozen annual conferences worldwide, and there is a not-so-small library of monthly magazines, annual corporate CSR reports, academic and how-to books, and a score of websites on the subject.

ISO jumps in

In June 2004, the International Standards Organization (ISO) jumped into the CSR arena, initiating a multi-year process to set consensus guidelines on “social responsibility” for corporations and other organizations.  In March 2005, work formally began to create ISO 26000, to be published in 2008, under the leadership of a “twinned” secretariat of the Brazilian and Swedish organizations, one each from the developing and developed worlds. 

More than 225 “CSR experts” from 43 ISO member countries (including 21 developing countries) and 24 liaison organizations attended the March meeting in Brazil.  This virtually guarantees that ISO 26000 will be developed, despite the opposition of some ISO members.  ISO’s avowed objective: “Provide practical guidance related to operationalizing social responsibility, identifying and engaging with stakeholders, and enhancing credibility of reports and claims made about social responsibility.”

Will it matter?

The question is whether the ISO’s voluntary guidelines – 26000 is explicitly not a certification standard – will have any real social impact.  The world is already awash in competing codes of conduct, auditing protocols, non-profit and for-profit auditors, and multiple certification schemes.  Will 26000 make any difference on the factory floors of the global economy where brutal, sweatshop conditions exist in all countries, including the United States? 

Very little tangible progress has been made in the last decade with “operationalizing” corporate social responsibility beyond glossy annual reports.  This is true even in the sports shoe and garment industries where some companies have been dragged, kicking and screaming all the way, to the forefront of the CSR world by publicity scandals and relentless consumer pressure. 

What has been accomplished is a higher level of disclosure.  Nike Inc., for instances, has publicly released the names of its 500-plus supplier factories.   Now specific plants’ actual conditions can be evaluated.  Gap Inc. also has released candid reports detailing the continuing violations of workers’ rights and workplace safety in its global supply chain, despite its best efforts to the contrary. 

But scores of companies in just the shoe and garment industries – let alone in the world economy – have made only the most nominal efforts at corporate social responsibility.  Wal-Mart, the poster child of global sweatshop production, is emblematic of Fortune 500 companies with secret, in-house auditing of its code of conduct that invariably finds “substantial compliance,” followed by declarations of being socially responsible.  The inescapable conclusion is that the dominant variety of CSR is little more than an elaborate public relations exercise.  

Barriers to real responsibility

The obstacle to making any significant, broad-based progress in improving factory health and safety conditions, not to mention wages, hours, harassment and discrimination in the global economy, is not a lack of guidelines, or management CSR command-and-control systems, or certification schemes.  The real obstacles are:

Lack of political will by corporations to refrain from taking advantage of vulnerable countries and desperate workers whose super-exploitation fattens the bottom line and meets financial analysts’ “quarterly expectations.”

Lack of political will, and perhaps lack of genuine options, on the part of governments in the developing world (heavily in debt, totally dependent on foreign investment, and straight-jacketed by international financial institutions) to enforce existing regulations and establish new ones.

Lack of resources (financial, informational and political) of sweatshop workers – the only ones with a permanent, unalterable commitment to corporate social responsibility – to know what their rights are, to know how to protect themselves on the job, and to be able to “operationalize” such knowledge.

Proposed ISO guidelines will not overcome matters of will and resources.  To the extent that the ISO guidelines can standardize an “upward harmonization” of competing guidelines, codes of conduct, auditing and reporting protocols already in existence, that would be a welcome development.  It is encouraging that the ISO has signed a Memorandum of Understanding with the International Labor Organization (ILO) to incorporate the ILO’s conventions and declarations into the ISO 26000 Social Responsibility Guidelines. 

But even if the ISO guidelines resist the temptation (and substantial corporate pressure) to establish only the “lowest common denominator” of standards, the question of actual implementation on the factory floor remains.  No corporation, of course, will be required to adopt or implement the guidelines.

Essential guideline components

If the ISO guidelines are to have any relevancy at all, two elements are essential: transparency and worker participation.  The guidelines must require public reporting of any CSR system’s auditing procedures, results and corrective actions, and they must identify the specific enterprises and activities evaluated by the guidelines. 

Second, there must be a feasible, effective means for workers in the audited enterprises, or their representatives in non-governmental organizations, to contest errors or misrepresentations in CSR audits and reports. 

Without these minimum components, the ISO 26000 Guidelines will not address, let alone remedy, the real obstacles to implementing meaningful CSR regimes on the factory floor.  Much larger efforts are needed to generate and sustain the political will and material resources that governments, employers and workers need to actually protect workplace health and safety in a global economy where there is a mad “race to the bottom” in all areas but short-term financial results.

An ISO SR Guideline that combines setting a high bar of standards with “sunshine” provisions for transparency, and feasible mechanisms for worker participation and verification could make a useful contribution. 

Otherwise, the ISO SR Guidelines will become just another small hut in the global cottage industry known as corporate social responsibility.