A/HRC/4/35 page 24 80. Supply chain assurance faces the greatest credibility challenges. Global brands and retailers, among others, have developed supplier codes to compensate for weak or unenforced standards in some countries, because global social expectations require them to demonstrate adherence to minimum standards. However, without independent external assurance of some sort these systems lack credibility, especially for companies with questionable performance records. Standards for supply chain auditing are highly variable. Among the most trusted are the brand certification and SA8000 factory certification systems of the Fair Labor Association (FLA), both of which involve multi-stakeholder governance structures. Similar to the hybrid initiatives discussed in the previous section, the credibility of voluntary accountability mechanisms is enhanced by processes involving participation, transparency, and review, which these two systems embody.66 81. For several reasons, the initiatives described in this section have not reached all types of companies. First, because many of the tools were developed for large national and transnational firms, they are not directly suitable for small- and medium-sized enterprises. Existing tools need to be adapted or new ones developed. Second, as noted, large developing country firms are just beginning to be drawn into this arena. Third, a more serious omission may be major state-owned enterprises based in some emerging economies: with few exceptions, they have not yet voluntarily associated themselves with such initiatives, nor is it well understood when the rules of State attribution apply to their human rights performance.67 Finally, as is true of all voluntary - and many statutory initiatives - determined laggards find ways to avoid scrutiny. This problem is not unique to human rights, nor is it unprecedented in history. But once a tipping point is reached, societies somehow manage to mitigate if not eliminate the problem. The trick is getting to the tipping point - a goal to which this mandate is dedicated. 66 A test of this proposition is currently under way. The Business Social Compliance Initiative, a European network of retailers, industry and importing companies, has formed a strategic alliance with SA8000 and become an “organizational stakeholder” in GRI. That ought to generate credibility benefits. At the same time, the world’s four largest supermarket chains, Wal-Mart, Tesco, Carrefour, and Metro are launching their own initiative with no external stakeholder involvement and, to date, no transparency. The proposition would predict difficulties ahead. During a recent US court case against Wal-Mart for alleged labour violations in the factories of overseas suppliers, a company attorney stated that its supplier code of conduct “creates certain rights for Wal-Mart. It does not create certain rights and obligations on behalf of Wal-Mart”. While the claim may be legally correct, it leaves unanswered the question of just what promises to workers and consumers the company’s code is intended to convey, and how the public can be assured that the promise is being kept. (Josh Gerstein, “Novel Legal Challenge to Wal-Mart Appears to be Faltering on Coast”, http://www.nysun.com/article/45009). 67 See note 6, above.