KANBrief 3/16
Since its foundation in 1946, the International Standards Organization (ISO) has, by its own account, developed over 20,000 standards. The majority of these are technical in nature. In recent years however, the number of international standards projects on social and welfare topics has steadily increased. This trend is extremely controversial, for a number of reasons.
Standardization work is important in order to ensure that technical products and services supplied throughout the world are of comparable quality. Technical standards also enable products to be designed to be as safe as possible both for consumers and for commercial users.
ISO charts new waters
ISO is an independent, private-sector, non-governmental organization. This already precludes it from developing standards on topics of social and welfare policy – topics that lie within the authority of the legislator, the accident insurance institutions or the social partners. Despite this, ISO has for many years now been developing standards on these topics that clearly fall within the spheres of general welfare, social and collective bargaining policy and have nothing whatsoever to do with traditional technical standardization.
Examples include ISO standards initiatives concerning social responsibility of organizations, human resource management, OSH management systems, risk management, anti-bribery management systems, and compliance. Recently, efforts were even made to formulate the principle of "halal", i.e. "permitted under Islamic religious law", in an ISO standard. The majority of industry associations have regularly and vehemently opposed standardization activity of this kind. Their aim is to prevent such standards from being created, particularly when they fall within the scope of collective bargaining policy, and are therefore wholly unsuited to creation by ISO.
A topical example: corporate governance
A further attempt by a standards organization to influence corporate policy is the proposal that an ISO committee be formed for the subject of "corporate governance". The justification for this proposal, which is currently at the enquiry stage, is highly questionable. Firstly, besides national codes, a range of principles in the area of corporate governance exist at European and international level (such as the OECD Principles of Corporate Governance and the OECD Guidelines on Corporate Governance of State-Owned Enterprises) that are already adhered to by companies. A "consolidation of the available guidance, recommendations, and requirements" by ISO, as stated in the proposal, is certainly not needed.
Unnecessary pressure for certification
For the most part, industry takes a critical view of the unchecked growth in standardization projects concerning social and welfare policy, not least because the standards concerned are primarily management system standards; standards that are not geared to the interests of the companies should not be developed in the first place. Past experience has also shown that it is difficult to correct a course that has been embarked upon in error during the development of ISO standards.
ISO standards of this kind can be expected to generate considerable pressure for certification. The associated additional bureaucratic overhead for the enterprises and their customers and suppliers considerably outweighs the anticipated benefits. This is particularly true for small and medium-sized enterprises, for which certification is extremely resource-intensive and beyond their capabilities.
The argument that companies are under no obligation to implement an ISO standard misses the intended and generally de-facto impact of these documents in reality. Observance of ISO standards is generally expected or required for the awarding of public contracts, particularly from direct suppliers. This effectively forces enterprises and their suppliers to implement ISO standards and submit to certification. Where technical standards are concerned, this has a positive effect upon product quality and competition. For standardization in the area of social and welfare policy, the effect upon the company can be catastrophic.
Eckhard Metze
metze@kan.de
Head of the employers' liaison office at the KAN Secretariat
Deputy Chairperson of the DIN Standards Committee for Organizational Processes