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WEF's Global Redesign Initiative: Because Who Needs Democracy and Accountability Anyway?
An Examination of the World Economic Forum's Push for Multi-Stakeholder Governance and its Implications for Democracy, Accountability, and the Rule of Law
The World Economic Forum's Global Redesign Initiative (GRI) presents a clear representation of how corporations and other elites perceive the future of governance. The initiative suggests relegating intergovernmental decision-making to the margins, and instead establishing a multi-stakeholder governance system. However, this approach raises important questions about the impact on democracy, accountability, and the rule of law.
During the GRI program, spanning 18 months, the WEF took the initiative to establish 40 Global Agenda Councils and industry-sector bodies. These groups comprised a diverse mix of individuals from the corporate, academic, government, entertainment, religious, civil society, and academic spheres. The fruits of their labour culminated in a 600-page report outlining various thematic proposals, policy essays, and organizing principles that serve as the foundation of WEF's multi-stakeholder governance system.
The WEF's multi-stakeholder governance proposal doesn't even need the approval or disapproval of any intergovernmental body. So, without any action from those pesky intergovernmental organizations, we can just sit back and watch as multi-stakeholder governance (MSG) slowly but surely takes over from boring old multilateralism. How convenient!
This report also boasts about WEF’s three decades of hosting an annual series of exclusive global and regional multi-stakeholder conferences for the elite. In the past 20 years, multi-stakeholder consultations have become trendy in the intergovernmental arena as a fancy umbrella framework for bringing together diverse constituencies to develop common approaches to contemporary global challenges and to present challenging development projects.
Oh, and let's not forget about Agenda 21 at the Earth Summit in Rio, way back in 1992, where nine exclusive "non-state" groups, known as "Maine Groups" in UN lingo, were recognized. These groups were privileged enough to engage officially on their behalf or as part of a multi-stakeholder group with the Rio process and subsequently at the Commission on Sustainable Development and the High Level Political Forum. How very exclusive!
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During the past two decades, various programmatic multi-stakeholder governance initiatives have emerged, such as the Marine Stewardship Council, the Forest Stewardship Council, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, and the Kimberley Process on diamonds mined in conflict areas. However, the success of each of these sector-focused organizations varies widely, as they have different participants from corporations, governments, and civil society, diverse procedures to set their terms of reference, and distinct rules for decision-making and policy adoption.
The success of these organizations is about as clear as mud. The Kimberley Process might have solved its original problem, but it's currently tearing itself apart. The Global Fund has thrown a lot of money at global health, but it's also undermined the World Health Organization's credibility. The Forest Stewardship Council has made some progress in the timber market, but it's having a hard time keeping its governance structure from falling apart. And the UN Secretary-General's Partnership Facility is aligned with the Millennium Development Goals, but it doesn't have any intergovernmental oversight to keep it in check.
“Numerous past initiatives stand to demonstrate that multistakeholder cooperation – bringing together representatives of government, civil society, the private sector, religious organizations, academia, and media – may take a range of different forms and contribute to global governance and problem-solving in various ways: [they can] help to broaden discussion and identify global public needs… introduce the element of global issue interest into intergovernmental negotiations, alongside the traditional national interest… help to overcome stalemate in highly conflict-ridden policy arenas… and gather and disseminate knowledge by bringing together actors with different views on and approaches to issues.” — summarized in 2007 by a government-led multi-stakeholder study on global governance
In international relations, everyone seems to be jumping on the MSG bandwagon these days. The Organization for Economic Co-operation and Development (OECD) wants them to implement the Sustainable Development Goals (SDGs) because, you know, why not add another acronym to the mix? The UN Security Council wants public–private partnerships (PPPs) in war zones because nothing says peace like a little corporate profit. Developed countries expect MSGs to provide the $100 billion per year for climate-related issues because it's not like they could just use their own resources to solve the problem. The United Nations Framework Convention on Climate Change (UNFCCC) looks to MSGs as the magical solution to implementing an intergovernmental convention. The UN Secretary-General sponsors UN–business partnerships to provide energy for all because we all know corporations have always had the best interests of the planet at heart. And let's not forget about developing and developed countries calling on MSGs to solve “technical” problems with the flow of capital to developing countries—because who needs international finance regulations when you have a multi-stakeholder governance system?
The WEF proposes to transform prior attempts at multi-stakeholder engagement into a "multi-stakeholder governance" system. However, it is not alone in this effort, as various UN bodies have also recommended institutionalizing global public–private partnerships. The terms "multi-stakeholder" and "partnership" are often used loosely, blurring the lines between multi-stakeholder consultation and multi-stakeholder governance. Strong divergences of views are between governments and citizens regarding the nature of MSGs. Some view MSGs as near angels capable of delivering everything, while others see them as inherently dangerous because profitability or business efficiency should not be a necessary condition for "solving" a global crisis.
While MSGs can offer valuable input and recommendations to governments, it is important to distinguish between their role in advocacy and expertise-sharing and their potential overreach into becoming a multi-stakeholder governance system that seeks to tackle global issues unilaterally. The latter scenario can be problematic and even dangerous, as it risks undermining the authority of democratically elected governments and prioritizing private interests over the public good.
The incompetence of governments working together has led to some civil society organizations (CSOs) choosing to cut out the middlemen and negotiate directly with the big fish multinational corporations (MNCs) that impact their issue. When these talks lead to a joint program, the CSOs then establish institutional governance systems to put the outcome into effect.
The bigwigs of these CSOs, along with esteemed academics, understand these partnerships may require making deals with the devil, but they feel like they have no other choice if they want to get anything done besides working with governments and the UN system. Sadly, the rapid rise of multi-stakeholder governance arrangements has gained legitimacy without any serious consideration of the democratic and political ramifications of these institutions.
When a new MSG claims to take the lead on global issues, grassroots communities and the wider public are understandably skeptical and anxious. This is because they recognize the power imbalance in partnering with MNCs and the various governance structures used by multi-stakeholder groups. They also understand that any deal with MNCs has the potential to undermine governments and the international system as leaders in global governance. This discomfort stems from the lack of democracy and transparency in the workings of MSGs.
From the WEF perspective, this development is actually a positive outcome. The first transformative step proposed in the GRI report is to “redefine the international system as constituting a wider, multifaceted system of global cooperation in which intergovernmental legal frameworks and institutions are embedded as a core, but not the sole and sometimes not the most crucial, component.”
Well, it appears to me that Klaus Schwab and his crew at the World Economic Forum are too busy perfecting their great reset plans to bother with pesky things like accountability and responsibility for their MSGs. Maybe they're hoping that their infamous catchphrase "you'll own nothing, and you'll be happy" applies to governance as well.
WEF'S MULTI-STAKEHOLDERISM: A NEW FORM OF GLOBAL GOVERNANCE?
Let's take a moment to admire Klaus Schwab's enlightened views on global democracy. According to the World Economic Forum (WEF), multi-stakeholderism revolves around the sacred corporation, with all stakeholders being mere constituents associated with the company. As Klaus Schwab himself stated in 1971 and repeated in the WEF's 40th-anniversary book in 2010, the "management of the modern enterprise must serve all stakeholders (die Interessenten), acting as their trustee charged with achieving the long-term sustained growth and prosperity of the company."
The graphic accompanying the concept depicts the company at the center, surrounded by ovals labeled "shareholders (owners)", "creditors", "customers", "national economy", "government and society," "suppliers", and "collaborators".
What's important to note here are the three critical elements that define WEF's understanding of multi-stakeholderism. Firstly, not all stakeholders are treated equally. Secondly, the corporation is placed at the center of the process. And thirdly, the list of multi-stakeholders is dominated by those with commercial connections to the company, such as customers, suppliers, creditors, owners, and national economies. All other potential stakeholders are grouped together as "government and society." Interestingly, there is no mention of democracy in Schwab's approach to multi-stakeholder activities.
It seems like the WEF wants to play global government, huh? According to the WEF's proposal, the existing system of nation-states is fundamentally different from their framework, which puts MNCs at the center of power. The selection of key multinational executives for a multi-stakeholder governance arrangement would be done by the initiating organization or by self-selection of leading firms interested in managing a global challenge with other constituents. This "flexible" governance system could be used to replace governments when a core group of MNC executives decide they could be more effective in addressing a global challenge in their own terms. It's like the boardroom taking over the UN.
LETTING THE ELITE PLAY WITHOUT WAITING FOR THE REST OF US
The WEF proposes to transform the annual Davos and regional multistakeholder meetings, as well as experimental forms of multistakeholder governance, into a new form of global governance. The idea is that multi-stakeholder groups, PPPs, or coalitions of the willing and able, as the GRI report calls them, should take the lead in solving global issues without waiting for the intergovernmental system to reach consensus. In this system, MNCs, countries, civil society bodies, academic institutions, and parts of the UN that share a common approach can act without the need for universal agreement. The official intergovernmental system can then either defer to these joint partnerships, provide de facto recognition to a multi-stakeholder process, or legalize the outcomes of a PPP after the fact.
What is left unsaid is that leaving governance to self-selected and potentially self-interested elite bodies also risks undermining public acceptance and democracy.
As the GRI project directors explain:
“While experimentation with individual public—private and multistakeholder partnerships has flourished over the past decade, including in many international organizations, they continue to play an incremental, even experimental, role in the international system rather than a systematic one. For this to change, policymaking processes and institutional structures themselves will need to be adapted and perhaps even fundamentally repositioned with this in mind.”
The UN, scholars, civil society, and social movements have all raised criticisms of the new global governance proposal. These concerns include eight cutting-edge issues related to multi-stakeholder global governance groups:
How are actors selected or excluded?
How do MSGs address power imbalances between actors?
Who selects the organizations and individuals to represent each participant category?
What are the appropriate standards, if any, to select institutional participants for each category?
Defining the problem/scope of a given MSG
Where does the money come from, and where does it go?
What is the decision-making process within the multi-stakeholder group?
What are its external obligations?
1. HOW ARE ACTORS SELECTED OR EXCLUDED?
Multilateralism is a system where the nation-state takes center stage as the key player. Only governments can vote, designate representatives for official meetings, and submit conventions for ratification by their parliaments. In contrast, in a multi-stakeholder setup, the selection of key actors becomes a murky issue. There is no equivalent system in multilateralism, where governments are the sole formal decision-makers for selecting the appropriate category of actors to solve a global crisis.
Participant categories in existing MSGs include governments (at the national, regional, and municipal levels), CSOs (at the international, regional and national levels), academics, gender-based or other rights groups (such as women’s rights organizations or Lesbian, Gay, Bisexual and Transgender (LGBT) rights movements), investors (from insurance firms to individuals with retirement accounts), manufacturing and servicing firms (such as MNCs, or micro-small-, or medium-sized enterprises), indigenous peoples, labour organizations, other Rio Major Group categories and other non-state actors relevant in some way to given global problem (e.g., educators, senior citizens, or nearby residents and communities).
Each MSG tackles a distinct issue, resulting in a significant variation in the selection of institutional categories of participants. Currently, the selection process is inclined towards those with a vested interest in the outcome and other stakeholder categories that are likely to support the approach of the MSG sponsor. As a result, stakeholder categories that are less cooperative with the sponsors or that will be adversely impacted by the expected outcome of the MSG are typically excluded from the outset of the process.
2. HOW DO MSGS ADDRESS POWER IMBALANCES BETWEEN ACTORS?
In a multi-stakeholder governance system, not all categories of actors are on equal footing. State, non-state, and corporate actors have differing capacities to finance their participation in MSGs, varying levels of negotiation power, distinct technical skills, and unequal abilities to implement or obstruct the outcome of an MSG process. Moreover, these actors compete for leadership roles within the system.
The WEF's new governance proposals place the state as just one of the many players, without necessarily being the most dominant one. In multilateral forums, there is a recognition that decision-making participants need to be balanced in terms of geography, gender, and political power. However, defining a balanced group becomes more complicated in a multi-stakeholder process. Should geography, gender, and access to resources for effective participation be balanced within each category or across the entire participation in a particular MSG?
The asymmetries of power between nation-states have been partially addressed by the multilateral system over the past few decades through structural developments. Creating a new system of global governance that is seen as legitimate will require credible solutions to balance the inherent differences in resources and power. This process will likely take many decades to devise.
3. WHO SELECTS THE ORGANIZATIONS AND INDIVIDUALS TO REPRESENT EACH PARTICIPANT CATEGORY?
In the context of multilateralism, the process for designating an individual as an ambassador or representative at an international conference is well-defined. However, in a multi-stakeholder governance system, representatives are typically not designated by their corporate board, NGO board of directors, or university trustees to act on behalf of their respective institutions. Instead, they are usually selected through an informal process by the sponsoring organization. This selection process becomes even more complex due to the vast number of individual organizations that could potentially "represent" a given category.
The third issue at hand concerns the authority to choose or endorse individual organizations, corporations, and institutions for each category of multi-stakeholder governance member. Currently, various political institutions are responsible for this task, ranging from MNC consortiums and university-affiliated institutes to intergovernmental organizations and the UN secretariat. Additionally, there are cases where multi-stakeholder consultative groups have evolved into self-selected governance organizations. The selection process can vary greatly depending on the specific multi-stakeholder arrangement.
The WEF is responsible for selecting the individuals and organizations that are invited to participate in its next generation of Global Agenda Councils. The original 40 councils have now grown to 69 operating Global Agenda Councils, six meta-councils, and 11 regionally focused councils. Thus, WEF has the authority to select the participants for all of these councils.
4. WHAT ARE THE APPROPRIATE STANDARDS, IF ANY, TO SELECT INSTITUTIONAL PARTICIPANTS FOR EACH CATEGORY?
When selecting organizations to participate in global governance or work with the UN system, it is important to consider appropriate criteria for legitimacy and credibility. While MNCs and CSOs are not without their flaws, they routinely employ criteria such as supply contract requirements, due diligence for mergers, and risk assessments for business partners. These same or similar criteria could be used to ensure that organizations selected for global governance arrangements are legitimate and trustworthy. However, the criteria must also be inclusive, transparent, and responsive to the needs of all stakeholders, including those who are marginalized or underrepresented.
Possible criteria for selecting legitimate organizations to participate in a global governance system or to work with the UN system may include their adherence to the UN Charter, compliance with widely accepted UN principles like the Universal Declaration of Human Rights and the Sustainable Development Goals (SDGs), and absence of financial or moral indictments or working against Security Council decisions.
5. DEFINING THE PROBLEM/SCOPE OF A GIVEN MSG
The initial stage of a political process is typically centered on the framing of a global issue. This involves extensive negotiations by governments to determine the specific language used to describe the issue. Depending on the circumstances, these negotiations may result in a lengthy resolution that reflects a multitude of viewpoints, or an ambiguous phrase that leaves room for future discussions and negotiations on complex issues.
The outcomes described above stem from the fact that having control over how a problem is defined can either provide an advantage or create a limitation on the potential results of the effort. Additionally, it can establish a clear understanding, either explicitly or implicitly, of the responsibilities and expectations of those involved in achieving the outcome.
It is evident that any group can define an issue within their own unique frame of reference. However, the World Economic Forum suggests that in the case of critical global issues emerging on the international political stage, a multi-stakeholder group can be swiftly established to assume responsibility for defining the matter, removing it from the purview of the multilateral process. This group may opt to limit the scope of the issue at the behest of leading multinational corporations, or alternatively, they may shape the issue in a manner that makes a market-based solution appear to be the most favorable outcome from the outset.
6. WHERE DOES THE MONEY COME FROM, AND WHERE DOES IT GO?
The sixth thorny issue that any multi-stakeholder group (MSG) must contend with relates to the all-important topic of cash flow! This means determining which institution or participant will foot the bill for financing the group, as well as which one will cough up the dough to put their recommendations into action. By "cash," we mean everything from direct payments to institutional resources, loaned organizational capacities, and even money management. Essentially, this involves reconciling the disparities in access to cash between participants, while also navigating the tricky waters of political expectations for both internally generated resources (i.e., what the wealthier participants want to fund) and externally supplied resources (i.e., what monies can be expected from government agencies, foundations, or corporate underwriting). Fun times, huh?
When it comes to tackling significant issues, substantial amounts of capital, expertise, and political dedication are necessary. To establish a fundamental sense of legitimacy, it is imperative to have clear and well-implemented transparency and accounting principles in place, as well as a defined set of criteria for measuring the various types of "cash" required to support the operations of the MSG and implement its recommendations. Without these fundamental elements, the success of the group's efforts may be compromised.
7. WHAT IS THE DECISION-MAKING PROCESS WITHIN THE MULTI-STAKEHOLDER GROUP?
The UN system has established comprehensive guidelines for voting procedures, ensuring that smaller or weaker nations can engage in discussions on issues with a sense of fairness. Furthermore, there are established protocols for resolving procedural disputes. These rules have evolved over 300 years of international law, defining the responsibilities, obligations, and liabilities of governments. However, the introduction of a multi-stakeholder system disrupts this history. There are currently no universally recognized standards that govern the internal decision-making processes of MSGs, nor are there any established guidelines for clarifying the obligations, responsibilities, and liabilities of these new "governors."
The million-dollar question: what becomes of a state's responsibilities when a multi-stakeholder group swoops in to take charge of a global issue? Do corporations and civil society suddenly inherit some obligations and liabilities that were once reserved solely for nation-states? Most multi-stakeholder governance groups operate under a shroud of secrecy, with little clarity regarding their decision-making processes. Take the Global Agenda Councils, for instance—their agendas aren't even made public, let alone their outcomes. It's all very hush-hush.
8. WHAT ARE ITS EXTERNAL OBLIGATIONS?
Multilateralism typically results in a negotiated agreement that includes instructions for an international body to implement, as well as a funding mechanism to ensure the necessary resources are available. Alternatively, governments may commit to independent actions to implement the agreement. In most cases, there are clear procedures for reporting back to the capital on the outcome of the agreement, securing funding from national budgets, and obtaining endorsement from the parliamentary process if needed.
Multi-stakeholder governance is where nobody is obligated to commit resources to actually carry out the work. And as for transparency, forget about it! Who requires clarity on how deliberations and outcomes are shared with the public, or how much each governing actor is obligated to consult their supposed constituencies? And don't even get me started on the public's opportunity to challenge the MSG's proposals or the role the group might play in coercing governments and other actors to implement their recommendations. This opt-in/opt-out approach is the crux of the WEF's version of global governance, after all.
WHO NEEDS RULES WHEN YOU CAN MAKE THEM UP AS YOU GO?
When it comes to global governance, there are no established guidelines or even a clear understanding of who is responsible, obligated, or liable under international law. It's a whole new ballgame, where these multi-stakeholder groups are basically making up their own rules as they go, without even paying lip service to procedural guidelines. And to make matters worse, a good chunk of GRI's multi-stakeholder governance proposals can be put into action without any need for intergovernmental approval. It's a free-for-all out there, folks!
The multi-stakeholder governance proposals put forward by the World Economic Forum serve as a timely call to reassess the existing rules of engagement in international affairs. This should prompt a wider range of social groups, especially those disproportionately impacted by globalization, to reconsider their perspectives on the workings of global governance.
Following the conclusion of World War II, the world's most influential governments established the UN Security Council with exclusive seats for themselves, as well as the Bretton Woods Institutions with distinctive voting privileges. In 1948, the UN General Assembly adopted the Universal Declaration of Human Rights, outlining standards to limit how states ought to treat their citizens and articulating what citizens are entitled to expect from their governments.
The World Economic Forum, led by powerful corporate actors, has put forward a proposal for a new global governance system. This echoes the post-WWII situation, where powerful actors used their influence to establish themselves in key governance roles. However, governments are being sidelined by this proposal, while civil society organizations and other non-state groups are only selectively invited to participate. It is crucial for governments and civil society to have a say in writing the rules of engagement with multinational corporations and limiting the negative impact of globalization.
In conclusion, the issue of global governance and the role of different actors in shaping it is a complex and contentious one. The emergence of multi-stakeholder governance proposals, particularly those put forward by the World Economic Forum, raises important questions about accountability, transparency, and legitimacy in global decision-making. While such proposals may offer innovative solutions to global problems, they also risk sidelining the traditional role of nation-states and civil society organizations in governance processes. It is imperative that all actors, including governments, non-state constituency groups, and MNCs, engage in a constructive dialogue and work towards a more equitable and just system of global governance that addresses the pressing challenges facing humanity.
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