ISO (C)SR Standard: Implications from a market access perspective

Tom RotherhamInternational 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 impactsTYPES 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

Preferences Materiality

Public Good Productivity

Economic Rewards – Value Creation

• price premium

• preferred supplier

• market access

• e.g. reduced ins. liability

• profitability

• access to credit/finance

Codified informationStandards Standards

Role of International Standards1. 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 ?

Preferences Materiality

Public Good Productivity

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 informationStandards Standards