A human rights reckoning for multi-stakeholder initiatives
by David Pred and Natalie Bugalski
The UK government body charged with enforcing the OECD’s standards on responsible business conduct called out the sugar industry’s sustainability association last month for admitting a company responsible for gross human rights abuses.
It reminded us of the old Groucho Marx line, “I wouldn’t want to belong to a club that would have me as a member.” Of course, we would never expect any company to be so self-deprecating, but they may look at the behavior of other members of the associations they join and wonder what it says about the club.
The statement from the UK National Contact Point for the OECD Guidelines on Multinational Enterprises came after a two-year examination of a complaint that we filed with the body against Bonsucro, an industry-dominated multi-stakeholder association with a mission “to promote sustainable sugarcane production around the world.” Our organization, Inclusive Development International, filed the complaint along with our Cambodian partners on behalf of more than 700 displaced farming families.
The complaint alleged that the sugar association violated the OECD Guidelines by failing to hold its member Mitr Phol accountable after the Thai sugar giant grabbed the families’ land and left them homeless and destitute. Indeed, it was just months after the forced evictions took place that Mitr Phol was admitted as a member of Bonsucro.
We first tried making use of Bonsucro’s own grievance resolution process. Instead of dealing with our complaint, Mitr Phol withdrew its membership, but was quietly readmitted a few years later. Bonsucro even honored the company with a Sustainability Award in 2015, despite the fact that just two weeks earlier the Thai National Human Rights Commission issued a scathing report finding that the company was responsible for serious human rights violations in Cambodia that had not been remediated. Mitr Phol was also showcased as a “leading member” at Bonsucro’s 2019 annual conference in Thailand, which was organized courtesy of a paid sponsorship by…you guessed it — Mitr Phol.
We see a lot of examples of greenwashing in our work fighting for corporate accountability, but this one was a real doozy — and we felt it needed to be challenged.
So we were pleased when the UK National Contact Point found that the London-based association is bound by the OECD’s standards on responsible business conduct and does not operate in a human rights vacuum, despite Bonsucro’s concerted efforts to argue that the standards do not apply to them. Its final statement on the case, published in January 2022, has important ramifications not just for Bonsucro, but also for other industry sustainability schemes.
The NCP found that Bonsucro breached its human rights due diligence responsibilities under the OECD Guidelines on Multinational Enterprises by admitting Mitr Phol.
“As a global multi-stakeholder non-profit organisation that exists to promote sustainable sugarcane, Bonsucro should have ensured that it did adequate due diligence before admitting members to its organisation to retain its credibility,” the NCP stated.
Bonsucro tried to argue that it fulfils its due diligence responsibilities by requiring its members to complete a self-assessment and by promising to abide by Bonsucro’s Code of Conduct, which includes a nebulous principle of ‘continuous improvement.’ But the UK NCP noted Bonsucro’s failure to provide any “information pertaining to their minimum benchmark of admittance in relation to human rights within their onboarding process.”
The UK NCP also concluded that Bonsucro breached the Guidelines by failing to use its leverage when it re-admitted Mitr Phol to the multi-stakeholder initiative in 2015. As a membership organization, the NCP held that Bonsucro does indeed have leverage over its members and should have used it to ensure that Mitr Phol had taken steps to redress the harms it caused to the Cambodian families before accepting it as a member.
Multi-stakeholder initiatives like Bonsucro that offer sustainability certification to members that meet their standards have become increasingly prominent as the public demands ethical sourcing in consumer goods. But far too often — because their standards are weak and the auditing of companies is even weaker — these schemes do little more than provide window dressing for corporate misconduct.
That’s why it is so important that the UK NCP has affirmed that these industry bodies are subject to international business and human rights expectations and will be held to account when they abuse the public trust and fail to demand that their members adhere to even the most basic standards of ethical conduct.
All multi-stakeholder initiatives should be paying attention to this case and reflecting on their own policies and practices regarding the admission of rights-abusing corporate actors into their clubs. The credibility of the “sustainably sourced” label is on the line.
David Pred and Natalie Bugalski are the co-founders and directors of Inclusive Development International.
