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Michael Kourabas headshot

Coal and the Role of Multi-Stakeholderism


When the U.N. Human Rights Council announced, in June 2011, that it was endorsing the U.N. Guiding Principles on Business and Human Rights (UNGPs), the Office of the High Commissioner for Human Rights had this to say:  “The Guiding Principles are the product of six years of research ... involving governments, companies, business associations, civil society, affected individuals and groups, investors and others around the world.”

The OHCHR went on to note that the UNGPs were “based on 47 consultations and site visits in more than 20 countries; an online consultation that attracted thousands of visitors from 120 countries; and voluminous research and submissions from experts from all over the world.”  In other words, without this kind of extensive collaboration across sectors, countries and industries, the UNGPs may not have been born.

Perhaps because of the UNGPs’ success, multi-stakeholderism is often highlighted as an essential ingredient in the continued progress of the business and human rights (BHR) movement. For example: in February, vice-chair of the U.N. Working Group on Business and Human Rights, Michael Addo, called attention to the importance of multi-stakeholder consultations in the development of National Action Plans; just last week, at an American Bar Association’s Section on International Law panel, Addo again took pains to stress the crucial role of multi-stakeholder participation in the promotion of the rule of law in the BHR context; and the OHCHR recently called for multi-stakeholder consultations in an effort to close the BHR justice gap.

Not surprising, right? After all, presidents get elected by promising to transcend partisanship and bring rival caucuses together. There’s little doubt that multi-stakeholderism is crucial to elements of the BHR movement, but is this type of collaboration always the best strategy? Or, more to the point, is it even realistic? A look at the  behavior of the major stakeholders in the coal industry is illustrative and sobering.

Take the recent coal-related chemical spill in West Virginia, for instance. On Jan. 9, a leak was discovered at a Freedom Industries chemical plant, spilling roughly 10,000 gallons of crude MCHM -- a chemical used in the coal production process -- into West Virginia’s Elk River, and effectively cutting off water to 300,000 residents. The spill and its effects have been well documented -- not least in Evan Osnos’ tour de force, “Chemical Valley,” in the April 7 New Yorker -- and virtually every detail about why the spill occurred and the state’s response once it was discovered suggests that, in some instances, multi-stakeholderism is merely aspirational.

One problem in West Virginia was the embarrassing lack of regulation pertaining to the chemical and coal industries.  Osnos points out that, although “[t]here are more than eighty thousand chemicals available for use in America, unless they are expected to be consumed, their effects on humans are not often tested, a principle known in the industry as ‘innocent until proven guilty.” This, of course, was a failure of every level of government.

Even less surprising is that Freedom Industries, perhaps just rolling the dice but more likely making a calculated determination that there was little downside risk, decided not to file mandatory leak-prevention plans with the Department of Environmental Protection (DEP). Yet, though state inspectors made periodic visits -- “as in April, 2010, when a neighbor complained of a licorice smell that ‘leaves a bad taste in your mouth’ -- the plant was never fined.” This was a failure of both private industry and government.

More disturbing still is that in West Virginia, even when companies were self-reporting, the DEP remained utterly ineffectual. Osnos again:  “In 2008, the Charleston Gazette discovered that in a nearly five-year period coal companies had self-reported around twenty-five thousand violations of the Clean Water Act, but the D.E.P. had not reviewed the reports or issued a fine.”  This appears to have been another epic failure of government.

The problems in Chemical Valley also extended to lobbyists. In most states, including West Virginia, important pollution standards may be set by elected officials, which is problematic even in a vacuum.  In coal country, where most elected officials are lining their pockets with soot-covered dollars, the problem is compounded. As Evan Hansen, an environmental consultant, put it in the Osnos piece:  “In the past 10 or 15 years, [the lobbyists have] systematically weakened virtually all the major water-quality standards that apply to the coal industry.” This, to me, is a failure of our society.

The West Virginia story is one of manifold failures -- the Osnos piece doesn’t suggest any potential protagonists -- and it is hard to imagine multi-stakeholder consultations surviving in the smog of the back-rooms that set the stage for the eventual spill, or making a difference in the impotence of the state's response. As Michelle Nijhuis pointed out in her must-read National Geographic piece, “Can Coal Ever Be Clean?” (spoiler: it can’t), even when individual companies make strides toward making coal cleaner, the failure of government to pass meaningful legislation on the subject -- a result of all the money on the other side -- can bring the whole thing crashing down.

Nijhuis highlights the example of American Electric Power (AEP), which a few years ago captured and stored more than 37,000 metric tons of pure carbon dioxide from its coal-fueled power plants, and the company planned to scale-up the project to eventually capture a quarter of the plant’s emissions. The scale-up would cost upwards of $300 million, and the U.S. Department of Energy had agreed to match AEP’s investment. For all this to work, however, AEP needed to be able to charge its customers for the CO2 storage (customers currently pay nothing for the emissions); yet, “when climate change legislation collapsed in the Senate, state utility regulators told the company that it could not charge its customers for a technology not yet required by law.”

The point, I suppose, is that multi-stakeholderism only really works when all parties are genuinely committed to accomplishing the same goal (as they were with the UNGPs).  Yet, how often is that really the case? It certainly wasn’t the case in West Virginia and doesn't appear to be the case with respect to any aspect of the environmental movement.  When putting together the so-called “spill bill” to govern the types of storage tanks that leaked in Chemical Valley, for instance, West Virginia Gov. Earl Ray Tomblin arranged meetings for the designated “stakeholders,” which included the local Chamber of Commerce, the Oil and Gas Association and the Coal Association but excluded civil society and environmental groups. While a seat at the table would have been nice, it is hard to imagine even Walter Berglund moving the needle.

To be sure, multi-stakeholderism is an admirable goal.  But if environmental groups have a chance to make a real difference -- something we’re in dire need of right now -- without inviting business into the conversation, they’d be well advised to just go for it.

Image credit: Flickr/jenorton

Michael Kourabas headshot

Trained as a lawyer, I now focus on legal business development, corporate social responsibility (CSR), and business & human rights. My past experience includes work on complex commercial litigation, international human rights advocacy, education policy, pro bono legal representation, and analysis of CSR challenges in both the private and public sectors.

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