Hard laws or voluntary guidelines?

Do voluntary guidelines for firms and governments represent regulatory failure or a defensible form of principled pragmatism?


This Thursday -- ahead of the G8 meeting -- President Obama meets four African heads of state on food security issues. Major UN agency the FAO has just adopted voluntary guidelines on the responsible governance of tenure / access rights for resources key to national food security (land, forests and fisheries). Debates on the upsurge in foreign investor interest in African agricultural land range widely between accounts championing a new era of farming productivity (new capital, unlocked potential) and critiques of unscrupulous land grabs (companies displacing communities, biofuels displacing basic foods, etc).


This post dodges these difficult debates to focus on another one: by being voluntary, do such guidelines represent an unjustifiable 'turn to ethics' in efforts to ensure responsible business conduct? Do they represent a retreat from harder, binding legal norms, a defeatism that erects broad voluntary frameworks when what is needed is a treaty with corresponding national-level legislation? The new FAO guidelines, like others of this sort, have followed some years of multi-stakeholder negotiations that have included private sector representatives (see for example here). Do such processes and their outcomes -- as their critics would maintain -- represent a triumph for commercial interests at the expense of the public interest?


The argument against

Critics of corporate voluntarism and self-regulation tend to argue that this approach obscures formal legal accountability and obstructs or displaces the development of binding legal norms; diverts what should be legal issues into merely ethical ones; and makes us feel like we are doing something about the governance gap. The argument is that such guidelines provide illusory accountability while reducing the demand and momentum for change, so that even no regulation is better than the pretence of regulation provided by voluntary guidelines. The FAO guidelines are mainly directed at governments (to provide the basis of national policies and laws) not corporates; however, there is an argument that voluntarism risks undermining efforts to promote accountability by business, and by shifting the onus to corporates such initiatives may deflect responsibility from public authorities while shifting regulatory power to private sector actors.


The argument for

These arguments deserve to be taken seriously. However, those disappointed that a three-year long process yields voluntary guidelines rather than treaty obligations overlook some key arguments:

* Promoting voluntary adoption of norms does not mean business remains immune from substantive values and strategic pressures;
* Not all the orderings that count or work are those legislated from above; legislating is not necessarily more important or effective an activity than persuading businesses in ways that engage their own interests; what matters is not whether a scheme is voluntary or mandatory, but its capacity to engender behavoural change;
* Voluntary frameworks do not necessarily retard the evolution of binding norms and can prepare the way for formal rules. Historically, many legal rules resulted from the state codifying what was preceding industry practice adopted by consensus and which had the advantage of bringing the industry along with it;
* The process of arriving at such guidelines in consultation with business and others can help build cultural resources and expectations -- assets that any later binding rules will rely on for more ready compliance;
* Voluntary codes are incomplete and fallible -- but so is formal state regulation. Moreover, the UN / Ruggie process on business and human rights showed fairly convincingly that focussing only on efforts to secure a binding treaty can generate far more resistance, delaying things for decades and undermining / distracting from interim reform efforts that involve synergies between binding and non-binding measures; Ruggie suggested that such guidelines can provide a platform for generating cumulative and sustainable progress without closing off the possibility of further development of laws. Christine Parker (2002) has noted how law can often be desparately short of techniques to stimulate business capacity for virtue. Even if one had a fully-developed treaty obliging states to regulate (in this case) access to land and other resources so as to foster local food security, the mere existence of such a treaty would not have that effect.

The FAO guidelines arguably represent part of a process: high global oil prices, among other things, continue to drive bio-fuels demand, while the 2011 Arab Spring uprisings were a reminder of the political effect of high urban food prices. Along with rapid urbanisation in Asia and elsewhere, these forces will continue to mean strong commercial and sovereign interest in African food production resources. Last week's guidelines may be disappointing to critics of perceived land grabs in Africa. But by attempting to condition the terms on which governments transact on such resources, they arguably represent significant progress in steadily raising the standard of what counts as reasonable conduct when local food security, livelihoods and cultural relations to land are at stake.

Jo