Mediation as Informal Problem-Solving: OECD and Implementation of Multinational Corporate Social Responsibility Guidelines

Tuesday, March 1, 2011

Keynote Address: Mediators Beyond Borders Conference

Los Angeles, California

Lawrence Susskind gives MBB KeynoteSeveral months before the officially scheduled meeting in Kyoto where almost 200 countries met to discuss a proposed amendment to the Convention on Climate Change, about 15 of the official country negotiators plus 10 or so representatives of major NGOs were invited to an informal meeting to talk about the draft protocol that had been prepared by the Chair of the session.

Prior to that session, a series of background papers was prepared by independent experts on key issues of concern to the attendees. The topics of these papers emerged from confidential conversations that took place between the invitees and the facilitation team managed by the Consensus Building Institute, a not-for-profit mediation organization based in Cambridge, Massachusetts. All invitees received these papers prior to the informal meeting.

The participants attended in their personal capacity, not in their official capacity. Thus, the session was held over a long weekend in a very beautiful European location. Everyone’s expenses were paid by an American-based foundation so no one had to ask their country to cover their expenses. Even the chair attended in his personal not his official capacity.
The end result was a booklet with agreed upon alternative language for some of the most controversial elements of the proposed Protocol. The facilitation team published the booklet with a bright cover and no one’s name on it. It was sent to all official national delegations prior to the formal negotiating session in Kyoto. It was easy to spot the many copies of the booklet on the desks of the participants because of its brightly colored cover.

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In Alberta, Canada, anyone unhappy with the regulatory decisions of the province’s Environmental Agency can challenge those actions by bringing a complaint to the Alberta Environmental Appeals Board (EAB). Indeed, under Canadian Law this is the only way to challenge a governmental decision. One must ask for a formal hearing before a politically-appointed appeals boards (something like an Administrative Law Judge in the United States).

It costs quite a bit to mount formal hearing before the EAB. And, there are only a handful of members of the Board. Anyone bringing a complaint would do well to bring a lawyer to represent them. The appeals process is quite formal and the Agency is required to appear.

Some years ago, the EAB approached the Consensus Building Institute to ask whether there might be a way to mediate the increasing number of cases being brought before them. After several years of experimentation and training, EAB institutionalized a mediation option that has, for the past few years, allowed 80% of all complaints to be resolved through informal conversations, mediated by trained members of the EAB, that often take place in the location where the issue arose (rather than in the Provincial capital). Alberta has saved time and money in the process.

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As illustrated in the above examples, informal problem solving, added as an extra step to formally-mandated policy-making or administrative procedures, can help to generate agreements that might otherwise have eluded the parties. Trained mediators have important roles to play in these problem-solving sessions. Indeed, I would argue that mediation is best understood as informal problem-solving, and as such it represents an enormous opportunity for Mediators Beyond Borders (MBB) and its many members. I’m going to use my time today to talk about the latest instance of mediation as informal-problem solving that is being used by the OECD’s to implement its Guidelines for Multinational Enterprises more effectively.

The OECD, the Organization for Economic Co-operation and Development, is a fifty-year old organization with 34 member countries and eight affiliated countries whose activities account for more than 85% of foreign direct investment worldwide. All member countries have committed to follow a set of Guidelines that encourage responsible business conduct, including human rights, labor, environmental, consumer protection, information disclosure, and anti-corruption standards. Each member country has created a National Contact Point (NCP) responsible for investigating any allegations that multinational enterprises operating in their countries, or through their subsidiaries or partners anywhere in the world, are violating the Guidelines.

For the past ten years, NCPs have investigated hundreds of complaints – rejecting some, but issuing findings in many that call on particular companies to cease certain practices or to remedy specific instances in which the Guidelines have been violated.

The OECD is currently in the middle of a ten-year review of the Guidelines. CBI is working with them to expand the use of mediation and conciliation to address complaints about Guideline violations. At the request of three NCPs, CBI recently completed a Mediation Manual spelling out when and how informal problem-solving might best be added to the repertoire of all NCPs. Not surprisingly, certain issues that experienced mediators know well, have arisen:

  • Some NCPs were unsure about the role of non-government neutrals in the informal problem-solving process. They needed to understand how their roles as official government representatives with a mandate for examination of complaints would dovetail with the role of external neutrals.
  • Some NCPs wondered about how effective mediation could be in situations where the debate among the parties is quite contentious.
  • Finally, some were unsure how to manage potential tradeoffs between informal problem solving and the formal complaint investigations that they are used to pursuing.

In spite of these concerns, a few NCPs have used mediation to address some complaints. These experiments underline the potential benefits of using a professional neutral as a mediator. A number of NCPs now understand that by hiring a mediator they do not relinquish decision-making authority to an outsider, but only add an informal problem-solving step to a process that may still require a complete formal investigation as well. Since a formal investigation could be required, it is usually inappropriate for an NCP itself to facilitate the informal problem-solving process.

Many of the NCPs were initially unsure how mediation could proceed in the absence of trust. They now understand that a mediator helps to build trust and that informal problem solving can proceed while that is happening as long as the process can be managed effectively.

Most NCPs are still trying to figure out when and how to add informal problem solving to their investigative efforts. The ten-year Guideline review may well make this clear. In the same way that NCPs must carry out their formal investigations while parallel legal proceedings are underway, informal problem solving can occur while the formal Guideline review process continues. CBI has strongly recommended that NCPs add early assessment and convening steps to their formal procedures to clarify who should be at the table and what the agenda needs to cover.

It is worth noting that there is actually a long list of multilaterals – like the global and regional development banks – moving to expand their use of informal problem solving as a ways of handling complaints of all kinds. This is creating new opportunities for members of Mediators Beyond Borders around the world.

The various global NGOs that regularly monitor OECD from the standpoint of those concerned about business, environment, labor and human rights have been enthusiastic about the prospects of adding informal problem solving to the process of Guideline enforcement. These NGOs have, at times, been disappointed with the limited impact of NCP review on corporate action. They see informal problem solving as one way of increasing the chances that positive changes will actually occur. They are much more likely to be implemented if agreements are worked out through mediation. Informal problem solving is also a way to bring additional stakeholder representatives into the problem solving discussions in ways that rarely occur in the context of the NCPs’ formal investigations.

I would suggest that Mediators Beyond Borders strongly consider framing what its members do in terms of informal problem solving rather than mediation. It is easier for non-experts to understand what is being proposed. In addition, governmental bodies will have an easier time accepting the offer of help as an add-on rather than as a reformulation of what they usually do. Third, informality is appealing to those (often non-governmental) interests who put off by the formality of administrative or legal hearings. Most of all, the idea of problem-solving is especially appealing to those who want to avoid the win-lose approach to managing conflict.

Photo by Steve Goldsmith.