ISO (C)SR Standard: Implications from a market access perspective Tom Rotherham International Institute for Sustainable Development (IISD)

Which requirements have a greater impact on market access ? 50% of Coffee Market Standard 146 WTO Members Technical Regulation 20,000+ suppliers States vs. Companies: Impact on Market Access

Only some CSR standards have trade impacts TYPES OF STANDARDS Capacity Building tools Develop trust through stakeholder-based processes Define social expectations Facilitate commercial relationships Market-based approaches involve capturing power of those market actors that value CSR CSR becomes a specification that consumers, investors, workers, buyers, …, integrate into their purchasing decisions Any commercial relationship that depends on communication of specifications – especially at a distance – can benefit from the development of standards KEY FACTOR is demonstration of compliance

Economic benefits ~ trade impacts PreferencesMateriality Public GoodProductivity Economic Rewards – Value Creation price premium preferred supplier market access e.g. reduced ins. liability profitability access to credit/finance Codified information Standards

Role of International Standards 1. Solve or avoid the problems caused by proliferation of standards 2. Harmonization  replace existing standards  obviate the need for national/other standards  framework for technical equivalence

Proliferation: Effects Experimentation and innovation Confusion in the marketplace Dilution of value of individual initiatives Distraction from regulatory framework Barriers to market entry difficulty identifying relevant standard diverse / inconsistent requirements multiple audits

Prior to the release of this Code of Conduct, the companies used their own respective codes of conduct, and suppliers were subject to multiple, independent vendor audits based on different criteria. HP facilitated this collaboration for the adoption of a single, global Electronics Industry Code of Conduct. The code reflects the participating companies' commitment to leadership in the area of corporate social responsibility and will potentially reduce inefficiency and duplication, and make performance easier to audit and verify. - HP press release, 21 October 2004 Electronics Industry Code of Conduct - Dell, HP, IBM, others…

Proliferation: Causes WSSD policy shift towards market-based approaches Fundamental difference between types of standards  objectives: b.a.u  baseline  aspirational  targets: internal; supply-chain; final consumer Proliferation of bodies that can develop standards Lack of cooperation between “standards users” Difficult to assess quality of one vs. another Some benefits to proliferation (“good” & “evil”) necessary vs. unnecessary proliferation ??

CSR Standardization in ISO Been considering the issue for 3 years Originated in the Consumer Policy Committee (unusual) Set up a multi-stakeholder Advisory Group to advise Held a public conference in Stockholm, June 2004 Decided to develop a CSR guideline standard General focus will be on guidance to promote general understanding and implementation of three pillars Strong focus on role of stakeholder engagement Links to existing international agreements and instruments no certification – yet… Work already started – first formal meeting of WG in March 2005

Implications of ISO (C)SR standards from a market access perspective not a specification standard = no conformity  cannot replace standards/codes with certification component  cannot become market access requirement\ will create link with international conventions / agreements  consistent with other codes (not like ISO 14001) could be a template for other national/sectoral standards  technical equivalence  why would anyone change what they are already doing ? is presently trying to be all things to all people  less likely to solve specific problems unless experts agree on focus Proliferation of bodies that can develop standards Most important influence likely to be long-term: create an international forum where all stakeholders can work together to develop international CSR standards

Does the future lie with governments ? PreferencesMateriality Public GoodProductivity Economic Rewards – Value Creation tax incentives public procurement access to resources subsidies market access e.g. reduced ins. liability profitability access to credit/finance Codified information Standards