A view from the United Nations
July - August 2004
The UN Global Compact: A big red herring disguised in UN blue?
By Vicente García-Delgado, CIVICUS UN Representative (New York)
In his recent article “Precarious ‘Partnerships’: Six problems of the Global Compact between business and the UN,” Jens Martens of World Economy, Ecology & Development declares: www.globalpolicy.org.
“NGOs believe in a strong United Nations, fully funded by governments, which maintains the integrity of international environmental and social agreements and seeks to hold corporations accountable in a legal framework. Yet we also believe in a UN that avoids excessive and undue corporate influence, and which holds commercial interests accountable to human rights, labor and environmental principles…”
I wanted to start this column with a strong and clear profession of support for the United Nations. NGOs and civil society organizations working within the UN System, including CIVICUS, are among the staunchest supporters of the United Nations, its Charter and the Universal Declaration of Human Rights. It is precisely out of this deep sense of loyalty that I feel driven to write about the Global Compact in a spirit of constructive criticism.
And even if I don’t speak for anybody else, including CIVICUS, I believe my reflections about the Global Compact are well within the mainstream thinking of many other civil society representatives at the UN who are concerned about the apparent ascendancy of the neo-liberal ideology in the United Nations to the detriment of the principles and the spirit of the world organization.
The Global Compact www.unglobalcompact.org/Portal/Default.asp is a 1999 initiative of Secretary General Kofi Annan aiming to encourage corporations voluntarily to become more responsible corporate citizens. Large multinational corporations have embraced the Global Compact, pledging to promote voluntary initiatives toward “responsible corporate citizenship,” but refusing to abide by any enforcement provisions.
Civil society’s skepticism about the Global Compact precedes the Compact itself and it appears to be raising , The Alliance for a Corporate-Free UN www.earthrights.org/pubs/UNCompact.pdf (supported by organizations such as Third World Network, the Institute for Policy Studies (USA), Focus on the Global South (Thailand), and Women’s Environment and Development Organization (USA) among others) has warned from the inception of the Global Compact that “the United Nations is selling-out to the interests of major corporations and a ‘blue-washing’ of companies that violate international standards. As examples, NGOs refer to participating companies such as Nestlé, Shell, Nike, Rio Tinto and BP. Critics view the [Global] Compact as an obstacle to progress on corporate accountability, rather than an instrument to promote corporate commitments to environmental sustainability, social protection and human rights.” (Martens, J, op cit).
SustainAbility to Global Compact: Gear up!
In October 2003, the Global Compact Office asked SustainAbility www.sustainability.com, a highly respected corporation with substantial expertise in issues regarding corporate social responsibility, to “evaluate the extent to which CR [corporate responsibility] initiatives are helping drive the transition to more sustainable forms of development.”
On 24 June 2004, SustainAbility issued its report, fittingly entitled “Gearing Up”. In the Report’s Executive Summary (Caption, p 2) SustainAbility states: www.sustainability.com/publications/gearing-up.asp
“Despite achieving impressive momentum [?], the corporate responsibility (CR) movement is bumping up against real limits. Most company initiatives are too peripheral from core business, too isolated from one another, and too disconnected from wider systems to make much of a collective impact…”
This is rather polite, diplomatic language, but the message is clear: “there are real limits” to what voluntary corporate behavior can do to advance the responsibility and accountability of corporations. Voluntary initiatives for corporate responsibility are simply not enough.
Corporate CEOs, or their Board of Directors, or large mutual funds and institutional and other investors (with a few honorable exceptions) “still don’t get it.” They don’t get that it is in their own interest truly to embrace the principles of sustainability and vigorously to mainstream this new priority throughout the corporate organizations they control. Irresponsible investors exercise tremendous pressure on corporate management to maximize profits in a highly competitive market. They are concerned exclusively with short-term profit results.
Board of Directors and CEOs are under great pressure by the immediate demands of their shareholders. As a result, CR initiatives are the “poor cousins” of corporate governance, ready to be preempted, if not pushed aside, because sales, deals and contracts are too important to be put at risk by mere CR concerns.
Civil Society to Global Compact: Walk the walk
For a variety of reasons, there is a substantial degree of reservation among many in civil society at the UN regarding the presumed “constructive engagement” of large multinational corporations through the Global Compact. The Global Compact needs to clean-up its act and to show some real progress toward its mission before it can gain its own credibility. Summits and further professions of faith no longer do. The Global Compact Office needs to show real teeth and some expulsions may be in order (SustainAbility’s report suggests that some Global Compact participant corporations might have engaged in lobbying for lower social and labor standards.) Appropriate monitoring mechanisms must gear up. The Global Compact needs to refocus corporate members on the ultimate reason for their presence at the UN: their active participation and contribution toward a sustainable world for all.
Often times civil society is accused of lacking in alternatives. Here is a simple one: let the Global Compact set up its own MDG (UN Millennium Development Goals) fund for 2004 and subsequent years until 2015, and let Global Compact companies compete among each other as to who is contributing the most.
I can see the headlines: “Global Compact raises $25 billion for MDGs; funds to help poor nations achieve UN Millennium goals.”
This is probably a) a cheaper alternative to the advertising and “infomercials” billions spent annually by LMCs in their defensive efforts to portray themselves as “greener than green, bluer than blue”; b) a small percentage of the companies’ annual advertising budgets world-wide, and c), a far more effective strategy to changing public perceptions about their true commitment to the principles they pledged to support when they joined the Global Compact.
It could happen. It’d be great if it did. But don’t hold your breath just yet.
Next:: “Too close for comfort”. Civil society at the UN is apprehensive about incorporating the Global Compact in the newly proposed UN Office of Constituency Engagement and Partnerships.
In solidarity, CIVICUS UN Representative (New York)
Vicente García-Delgado
Please send your comments to CIVICUSUN@aol.com
