This article examines the role of business, through the World Gold Council, in the evolution of the Conflict‐free Gold Standard (CFGS). Using document analysis of meeting minutes, augmented by interviews with key participants, it is demonstrated that through the use of structural and discursive power, mining firms were able to socialise other actors (governments and NGOs) into accepting a business‐friendly standard. During the consultation process, the standard was weakened sufficiently as to allow business to continue to pursue opportunities in conflict zones. It is argued that the CFGS does little to address the issue of mine site conflict, but instead serves as a mechanism to reassure gold investors and consumers. The paper concludes that the Conflict‐free Gold Standard, like many private governance initiatives, is unlikely to address the issue it purports to. And, that, firms’ contribution to global governance should be cautiously viewed in this light.
- It should not be assumed that the presence of voluntary governance initiatives and firm codes of conduct equate to improved governance of industries. The private governance initiative explored in this paper, the Conflict‐free Gold Standard certifies very little and instead serves as a mechanism to reassure gold investors and consumers. The claims of firm‐led governance and the robustness of private governance initiatives should be critically examined by policy makers, and firms’ contribution to global governance should be cautiously viewed in this light.
- The inability to address local level issues remains a challenge to private governance initiatives developed at the global or regional level. Firm‐led governance, developed by large MNCs at the global level is unlikely to meet the needs of local communities and should be supported by strong local or national regulation. Policy makers' approach to global, firm‐led governance should be to ask whether this addresses local issues, and how it might be amended to better do so.
- The introduction of legislation in larger jurisdictions (such as the EU and US) can encourage firms to replicate their approach globally. Done well, this may lead to a race to the top, or the spread of higher standards in jurisdictions where there is non‐existent national regulation.
- The development of the Conflict‐free Gold Standard and the decision by the industry body to place conflict gold on the political agenda may in fact invite the kind of response the industry is seemingly trying to avoid. That is, by stating their product is conflict‐free, the gold industry may have provided a discursive opening for governments, consumers and NGOs to hold the industry to account by demanding a more rigorous standard. This is one way in which policy makers can improve voluntary standards and hold firms to account.