Responsibility Deals

A light but effective touch – was the final report of the Conservative Party Working Group on Responsible Business (March 2008).  Following up on the initial 2007 paper of the Working Group it developed the idea of ‘Responsibility Deals’, a new generation of voluntary agreements.

The Working Group scoped the ‘Responsibility Deal’ concept as follows:
  • Participants in Responsibility Deals would be drawn from business and business-representative bodies, NGOs and the voluntary sector, academic institutions, regulators, government bodies and investors
  • Part of a redefined government role in business should be to convene and manage such partnerships as an objective broker and arbiter
  • Relevant government departments would also be participants in Responsibility Deals
  • Aim would be…reward for positive environmental and social behaviour [and] broker a way forward …that aimed to be predominantly non-regulatory
  • Important that Responsibility Deals be driven at Secretary of State level …Deals need to be chaired under the direct supervision of a Secretary of State
  • Participation would not be mandatory, it would reflect poorly on any party – corporate or otherwise – that did not participate when invited to do so
  • On a particular issue a regulator can design a credible voluntary index for measuring specific business performance in conjunction with a range of stakeholders
  • Business involvement should not be overcomplicated, since this would increase costs and the likelihood of non-participation
  • Business and trade associations could play a key role, provided that they can demonstrate over time that their efforts make a difference to their members
  • …other collaborative deals have focused on both dialogue and process over even-handed outcomes  …shifting the focus to outcomes…
  • Each Deal would have an annual review process
  • Random audits of the performance of any of the participants could be carried out by an appropriate regulator to verify performance
  • Participation, of lack thereof, in Responsibility Deals would be governed by the principle of “engage or explain” for companies… Investors and NGOS…would be encouraged to create pressure on laggard businesses as they see fit, including those that choose not to participate… we believe it is likely most major business players will want to participate in them.
  • A focus on encouraging participation by smaller companies would be vital
  • Further study is required as to whether Responsibility Deals can work on extremely sensitive issues such as UK business corruption overseas
  • Responsibility Deals would also need to avoid duplication of existing efforts and initiatives
At the launch of the 2008 Working Group Report David Cameron (Leader of the opposition) announced the development of the Conservative’s first Responsibility Deals through a Commission on Waste and Voluntary Agreements (still to report), as well as a Public Health Commission, headed by Dave Lewis of Unilever.
Business in the Community submitted a detail response to the Commission on Waste and Voluntary Agreements in December 2008 highlighting the barriers that UK/EU competition law may currently present.
The Public Health Commission published its final report on 1 July 2009.  This highlighted (pg 19):
“One of the problems of encouraging co-operation among businesses to achieve social goals is the approach taken by the competition authorities to any evidence or suggestion of cartels or collusion.  What business requires is a clear steer from Government that co-operation to address health issues can take place in a carefully regulated forum.
Recommendation 6.4: Government attention must be given to competition issues that arise from actual and potential industry voluntary agreements. Where businesses can work together to deliver health improvements, Government should find a way of providing a safe haven for companies to discuss solutions that would otherwise risk contravening competition law.”
It is worth noting that the Conservative working group suggested in the context of encouraging participation in voluntary benchmarking initiatives (e.g. The Corporate Health and Safety Performance Index – CHaSPI) that:
“A reward for taking part in CHaSPI could be more lenient requirements on reporting to the Health and Safety Executive. Subject to audits from the HSE, if companies do well in CHaSPI they can be offered fewer site inspections as an incentive, saving time and money.”
In the wider context of Private Voluntary Initiatives (PVIs) – e.g. The Ethical Trading Initiative, the Extractive Industries Transparency Initiative and the Kimberley Process – the working group suggested:
  • Commission a biannual review of the progress of PVIs and lessons learned
  • Help build new PVIs by assisting British firms to build bridges in both sourcing and customer markets (e.g. Government’s relationships
    with other administrations could be useful for the private sector in developing relations for PVIs in the markets from which
    companies source).
  • Develop new mechanisms to provide incentives for companies to join PVIs (e.g. using state procurement contracts, providing favoured access on trade missions to PVI participants and by putting pressure on international financial institutions to add PVI-like requirements as a condition of finance provision).