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17 Sep 2020

Judy Gearhart

Commentary: MSIs and the Search to Cure the Global Governance Gap

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MSIs, at least those focused on the impact of global supply chains, were only set up to address the symptoms, not the cause of these plagues. Most failed to recognize how MNCs were actually fueling corruption and employer abuse by constantly demanding lower prices and faster production times. Thus, the global governance gap grew wider as MNCs diversified their supply chains and effectively played one producer country against the other...

MSIs focused on supply-chain monitoring—as distinct from MSIs engaging the public sector—have been largely silent or disengaged on advocacy for legal reforms and rule of law, often turning a blind eye as member MNCs’ suppliers pursue multi-year legal battles against whistle-blowers or worker organizers...

Not Fit for Purpose could have distinguished more among distinct MSI approaches, e.g. supply-chain versus public governance-focused MSIs... The report is very helpful though, especially in identifying patterns and quantifying how the majority of MSIs fall short on models of good governance...

Given the extent to which they have become embedded in multilateral and government efforts, MSIs may be around for a long time. So it’s worth calling out reforms needed. MSIs should be seen as a first-wave experiment in partially addressing the global governance gap. To see them as a cure, however, is to lose sight of the need to advance legal reforms and address the ways MNCs continue to create the very problems the supply-chain MSIs purport to fix.

Potentially the greatest contribution of MSIs has been to get MNCs to acknowledge they needed to address the problems in their supply chains and to reveal (through multiple failures) how ineffective voluntary compliance programs are...

In short, if we are going to close the global governance gap, we need to support initiatives that advance effective legal remedies and models of good governance.