Abstract
Tethered Fates by Shareen Hertel provides a compelling critique of the role of stakeholder involvement in global business activities. The perspectives she shares build on previous research on responsible business, as the roles of community-based stakeholders have often been absent from many of the studies looking at the impacts and responsibilities of multinational enterprises. As such, this volume is an important contribution to scholarship on responsible practices for global businesses.
The author provides a historical overview of the development of stakeholder consultations starting from the 1980s. Additionally, she carries out a global analysis of contemporary stakeholder consultation processes by analyzing information from a large database. The concentration of stakeholder consultations in the extractive industries is highlighted as well as the limited use of such consultations for light manufacturing, in which businesses often have less sunk costs in production sites. Furthermore, Hertel gives rich, qualitative accounts of the experiences of two communities that house factories that are part of textile and apparel sector value chains. The two cases selected are similar communities in the Dominican Republic, only 30 kilometers apart; however, the cases represent two different business models and approaches to corporate responsibility. One factory has been developed through an international worker-led campaign to support living wages, and it currently pays three times the national minimum wage. The other is owned by a global corporation and pays the minimum wage, while also engaging in local philanthropy projects. These cases highlight differences between globally led corporate responsibility projects and a worker-driven approach.
Hertel problematizes the fact that while stakeholder dialogue is supposed to be central to addressing business and human rights challenges, in reality, community members are not often included in identifying risks or in identifying ways in which companies can add social value to the communities where they operate. She argues that business models need to build in the costs for developing and implementing better processes for taking responsibility for providing remedy to people harmed directly or indirectly by businesses’ practices. Although corporate responsibility to remedy abuses has become a global norm, Hertel contends that actions being taken are not adequate. She writes that expecting community members to spend unpaid time to attend consultations that provide unclear benefits is part of the problem. She also describes how consultations are often organized at times and places that are convenient for companies but may not be easy for community members to attend. Another key challenge identified is an imbalance of power between companies, governments, and community members. She explains how too often the main beneficiaries of consultations are the companies conducting them, particularly in terms of maintaining their public image and constraining communities’ demands.
Bringing together the lessons from the multiple sources of quantitative and qualitative data she has studied, Hertel develops a set of policy implications designed to make stakeholder consultation more effective. A factor she highlights is the difference in the power and ability of consulting and research organizations to have their messages heard as civil society stakeholders compared to individuals and grassroots community organizations. She also highlights the importance of considering community stakeholders’ messages related to preventing future harm, not just seeking their input into how to remedy situations once harm has occurred. Considering light manufacturing for global supply chains, she emphasizes the challenges given that contemporary production is often fast-paced and globally mobile, which can be at odds with having slow, deliberative consultation processes.
Hertel also identifies problems with government involvement in companies’ engagement with stakeholders. One issue is that government participants in international multi-stakeholder initiatives are more likely to be from corporations’ home countries as opposed to the countries where global supply chain manufacturing processes take place. A second issue is that local governments facilitating consultations may be more aligned with supporting the interests of investors in their regions rather than the communities that may be impacted.
To bring greater weight to many of the problems presented, Hertel proposes that participation in stakeholder consultation is an instrumental right, which can make other rights, such as the right to work or the right to housing, possible to achieve. This framing is intended to give governments more responsibility for ensuring effective consultation. Hertel writes that for stakeholder dialogue to be effective, it needs to engage a wider range of people, and processes need to inclusively involve community members by giving them opportunities to share the problems they have and to be involved in setting consultations’ scope, terms, and goals.
Overall, the author successfully brings together diverse sources of data to present a rich and compelling narrative that draws attention to the underexplored experiences of stakeholders connected to the activities of global businesses. It would have been interesting to see a deeper exploration of the roles and perspectives of companies and government actors; nonetheless, the firsthand perspectives of community stakeholders that are shared in this book provide valuable insights into the experiences of people living in places connected to global production networks. The findings and recommendations in Tethered Fates can provide practical guidance to practitioners and can set an agenda for future research on how international businesses engage with local communities.