Toward SuSTainabiliTy: The roleS and limiTaTionS of ... - Resolve

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Chapter 1: Setting the Context 15model depends on its fitness for purpose—thatis, does the model meet the assurance needsof the intended audience at the least cost andbureaucracy? End users of a standards systemoften influence the type of assurance required; themore direct the message to consumers, the moreformal the assurance model required. 17New tools, such as risk-based modeling, areemerging as a means of reducing the assuranceburden. In risk-based modeling, risk assessmentis introduced at a number of stages in the certificationprocess as a tool to first identify thepotential risks of noncompliance and then assesswhere those risks are most likely to occur. Theresults of the risk assessment can be used toguide more-efficient sampling at different pointsin the assurance process, from determining thefrequency and intensity of audits to the auditorchoosing which aspects of standards complianceto pursue in greater depth. 18Some standards systems are also consideringoptions for rebalancing the cost-to-benefit ratio,often by increasing the benefits of certification toparticipating enterprises. For example, standardssystems could encourage auditors to engagein capacity building during audits. This is oftencounseled against, given the potential conflict ofinterest of an auditor as both advisor and assessor.But in these cases, the auditor plays the roleof “extension agent” for enterprises that mightnot otherwise have access to technical support. 19It is worth noting that certification is only oneroute toward standards-compliant practices.Becoming certified is a choice made by individualenterprises, typically for market recognition andreward, assessment of their performance, a roadmapfor improvement, or a strategy for managingrisk. However, enterprises can be fully compliantwith a standard and choose not to certify. Interms of impacts, there is very little differencebetween a standards-compliant enterprise thatis certified and a standards-compliant enterprisethat is not, apart from the potential financial ormarket incentives for the certified enterprise tostay compliant over time. Similarly, standards canbe used as a framework for capacity building oras implementation criteria for meeting certainregulatory requirements.Going forward, it would be useful to betterunderstand the range of existing models of assurance,their relative strengths, weaknesses, andlimitations, and stakeholder expectations aboutwhich models are appropriate for what purposes.In managing these expectations, a significanteducation component is required. Standards systemsneed to have a clearer and more rigorousunderstanding of the levels of assurance that canbe delivered through their respective assurancemodels, based on their use of risk analysis andsampling methodologies. End users of standardssystems need to understand that certificationis not a guarantee of 100 percent compliance,and that it is more important to understand howthe standards system responds to instances ofnoncompliance. The ISEAL Alliance is facilitatingthe development of an Assurance Code of GoodPractice, to be published in 2012, that will start toaddress these issues.Auditor Competence andIntegrity ChallengesGiven the diversity of socio-cultural and environmentalcontexts in which auditors operate,combined with relatively high levels of subjectivityin the auditing process, the ability of auditorsto make consistent assessments is essential. Ina recent ISEAL Alliance survey on priorities foran Assurance Code of Good Practice, respondentsranked auditor competence as the mostsignificant challenge to be addressed. 20 Despitestandards systems having recognized and workedfor years to address this issue, auditor competenceremains one of the most significant challenges to17 www.isealalliance.org/online-community/resources/background-research-for-the-assurance-code-project18 Ibid.19 Ibid.20 www.isealalliance.org/our-work/our-codes-of-goodpractice/assurance-codeToward Sustainability: The Roles and Limitations of Certification
Chapter 1: Setting the Context 16the integrity and credibility of voluntary standardsand certification. 21In the auditing of social and environmental performance,it is usually not sufficient that auditorshave completed the required training courses,have the requisite knowledge about the standardand the sector, and know how to carry out anaudit; auditors also need skills in stakeholder consultationand interviewing. Certification bodiesare often able to identify early on who will makea good auditor based on the “soft” skills that theindividual possesses. These personal attributescan make the difference between a good auditorand a great one. 22Among the key challenges faced by standardssystems in ensuring competent auditors is thevariability of the contexts to which the standardis applied. Given that many of these standardsare intended to apply globally but need to takeinto account local social customs and norms aswell as ecological realities, it is not surprising thatauditors have a hard time being consistent in theirinterpretations of the standard. This has as muchto do with the process in place to develop localinterpretations of standards as it does with thecompetence of auditors.In addition, comparatively few certification bodiesare based in developing countries, where a lotof certification takes place. In some cases, thereare not enough auditors who have a good understandingof local social and ecological contexts.Another challenge is that the volume of work insome countries is quite limited (particularly wherestandards systems have only recently expanded),so it is difficult to retain qualified auditors. Thus,certification bodies may not invest adequately inauditor training and professional developmentuntil the quantity of work and income justifiesthe investment (personal communication, ISEALmembers).A final key issue relating to auditor competenceinvolves integrity and conflicts of interest. In eventhe most rigorous assurance system, involvingthird-party assessments, auditors may becometoo friendly with their clients, or they may havefinancial incentives for maintaining the certificationstatus of the client. Outright fraud andcorruption, though infrequent, is also a risk.Experts in the field have a relatively good understandingof what is required to ensure thatauditors have both integrity and competence.It involves identifying individuals with the rightcombination of skills, knowledge, and personalattributes and supporting them with adequatetraining, professional development, oversight,and work. The challenge lies in transforming thisvision to reality. Most standards systems do nothave the economies of scale to support auditorsin these ways, as it can be prohibitively expensive.It may be useful for standards systems to exploreopportunities for coordination, such as the deliveryof joint training programs or shared auditorregistration, which starts to get at the efficienciesthat scale can bring (personal communication,ISEAL members).Governance ChallengesStakeholder engagement is a core tenet in manysocial and environmental standards systems, withstakeholders playing central roles in standardsdevelopment and governance. While this driveslegitimacy (Cashore, 2002) and buy-in, it can alsomake the standards system bureaucratic and slowto respond (Cashore, et al., 2004).Standards systemshave been accused of not being responsiveto changing market needs and, more importantly,have seen other sustainability tools innovate andevolve faster to meet changing expectations.The challenge for standards systems is that theyare required to combine stakeholder-driven processessuch as standard setting with operatinga business. The limitations of this model arisewhen stakeholders put their own interests firstin considering decisions related to the running21 www.isealalliance.org/online-community/resources/background-research-for-the-assurance-code-project22 Ibid.Toward Sustainability: The Roles and Limitations of Certification
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