Governance and decision making CORPORATE POWER IS ENTRENCHED – OVERREPRESENTATION OF BUSINESS ACTORS IN DECISION MAKING The business sector tends to be disproportionately represented in certification schemes’ governing bodies, giving it an outsized role in decision making.1 When the performance standards for certification schemes are being developed and implemented, the market interests of influential corporations tend to carry more weight than the interests of Indigenous and local communities, consumers and other stakeholders, or the need to address the relevant social and/or environmental issues in the most effective way possible.2 This is in part also due to the fact that standards are continuously being adapted into complex sets of principles in order to apply them in very different contexts. It is difficult for civil society to keep up with or match the amount of lobbying done by multinational corporations, which have extensive resources to dedicate to preserving their interests.3 As a result, the recent MSI Integrity report Not Fit-for-Purpose concludes that multi-stakeholder initiatives (including certification schemes) ‘entrench power in favor of corporations – the entities they seek to regulate’,4 whereas people and the environment, not corporations, should be at the heart of governance.
Furthermore, larger and more powerful actors, such as agribusiness corporations and global traders, are often in a position to dictate standards to smaller and less powerful producers, which may end up being excluded from certification schemes altogether if they cannot afford the investment necessary for the certification process. This has been found to be the case for soya5 and for independent palm oil smallholders.6 That said, there are also schemes – especially within the Fair Trade movement – that have been created intentionally to enable positive participation of marginalized producers in global trade,7 and some schemes are making efforts to address corporate dominance. An example is the RSPO’s Smallholder Support Fund, which aims to improve participation of smallholders by, for example, providing assistance with the costs of certification.8
FAILURE OF SCHEMES TO ADHERE TO BEST PRACTICE STANDARDS The ISEAL Alliance aims to strengthen sustainability standards and provides a standard requirements framework for certification schemes. Its membership is open to all multistakeholder sustainability standards and accreditation bodies that demonstrate their ability to meet the ISEAL Codes of Good Practice and accompanying requirements, which emphasise transparency, openness and broad stakeholder consultation and dialogue.9 ISEAL Code Compliant membership can be considered an indicator of scheme strength, but with ISEAL being governed by its members and not independently auditing member compliance,10 the extent to which they actually adhere to the Codes is not always clear. Certification schemes can also apply to be ISEAL Community Members (formerly ‘subscribers’), rather than Code Compliant members, but that only requires them to commit to the
5 Elgert, L. (2012) p.296 1
MSI Integrity (2020) p.66
2 Marin-Burgos, V., Clancy, J. S., & Lovett, J. C. (2014) 3 Changing Markets Foundation (2018) pp.19-20, MSI Integrity (2020) p.66 4 MSI Integrity (2020) p.66
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6 OECD (2016), Rietberg, P., & Slingerland, M. (2016) 7 Commerce Équitable France et al. (2020) 8 RSPO, Introduction RSSF [Website] 9 ISEAL Alliance (2014); see also ISEAL Alliance, ISEAL membership [Website] 10 ISEAL Alliance (2018)
Chapter 2: Key aspects that determine certification schemes’ effectiveness and credibility
