Global Policy Forum

By Michael Doyle, Assistant Secretary-General
& Georg Kell, Executive Head of Global Compact

12 February 2002

CorpWatch
P.O. Box 29344
San Francisco, CA 94129

Dear Messrs. Karliner, Bruno and members of the Alliance for a Corporate-Free UN,

Thank you for your letter 29 January 2002 to the Secretary-General regarding the Global Compact. We have noted your concerns and appreciate this opportunity to bring CorpWatch up to date on developments with the Global Compact. We would also like to correct certain inaccuracies in your representation of the Global Compact. We will be posting both your letter and our response on the Global Compact website for wider dissemination, and would request you to kindly do the same on the CorpWatch website.

The Global Compact is a unique collaborative initiative. It has a positive and forward-looking agenda -- to enlist business to help solve the complex challenges facing our world. Endorsing the nine principles of the Global Compact signifies the acceptance of universal values and also responsibility for action. Since it was launched by the Secretary-General at the World Economic Forum in 1999, the Global Compact has received backing from leading multilateral bodies, institutions and hundreds of companies of all sizes from North and South. Importantly, the General Assembly of the United Nations passed a resolution in Fall 2001, co-sponsored by more than 70 countries from North and South, in support of the goals of the Global Compact.

The Global Compact is now being taken up in more than thirty countries. Contrary to conventional wisdom, the highest degree of take-up has not been in industrialised but in developing countries especially Brazil and India. This is an important and significant development. Visionary corporate leaders from the South are rising to the challenge of the Global Compact and beginning to reshape traditional views and expectations of the role of the private sector in their countries. Their continued involvement and leadership will be crucial to the further development of the Global Compact.

We are continually looking for ways to improve the functioning of the Global Compact. Towards this the Secretary-General recently appointed an Advisory Committee of Eminent Persons to the Global Compact. This body comprises leading business, NGOs, academics and trade unions with considerable experience and diverse constituencies. We have also received a great deal of constructive feedback and engagement from civil society organisations world-wide. NGOs are now actively involved in the Global Compact in virtually all these countries. They are beginning to make it their own by helping set the terms for local debate, assist in implementation, and monitor progress. This is an exciting development and we look forward to supporting it.

We also welcome CorpWatch's engagement on the Global Compact. However, your analysis appears to be based on certain fundamental misunderstandings and inaccuracies that we would like to clarify. The credibility of any organisation depends on its integrity and truthfulness. We would request you to note the following points so as not to reproduce further misunderstanding:

Firstly, there appears to be a persistent misunderstanding of the aims, purpose and practices of the Global Compact in CorpWatch's material. Your recent publication, Greenwash, illustrates this. Your analysis is based on the assumption that the Compact assesses performances of companies in the social and environmental fields. This view is wrong. The Compact is an entirely voluntary initiative to advance nine universal principles in the areas of human rights, labor and the environment. The Compact seeks to utilize three distinct instruments to promote the principles: learning networks, inter-disciplinary dialogue, and partnership projects in support of UN goals, especially developmental ones. This approach is fully consistent with the purpose and methods of the United Nations. In fact, stimulating cooperation and collective action among different societal actors in service of universal principles is intrinsic to the mission of the UN system.

Secondly, the Global Compact calls upon companies to take a stand on human rights, labor rights, and the environment. Although necessary and welcome, a declaration in support of the principles is not sufficient. That is why we do not publicly identify companies simply for registering their intent. Concrete action is required and those measures must be open to public scrutiny.

More than 44 participating companies have both registered their commitment to the principles and provided a public submission to the Learning Forum during its experimental pilot phase. (This was reviewed and reported on at an international conference in London and described in detail on our website.) These companies have fulfilled our two requirements for participation in the Global Compact and have been publicly identified on our Web site since 7 January, 2002. This information was available on our website well before the publication of your recent letter and report. We would urge you to check your facts more diligently in the future.

Thirdly, with regard to the UN logo, we have strict guidelines on its use that we make clear to all seeking to use it. We have no control, however, over an image of a decomposed globe, which is not copyright protected.

Fourthly, we feel that the pilot phase was both illuminating and useful, we would be the first to acknowledge the challenges of establishing a global learning forum. It is an ambitious enterprise and a new one for our small office, which relies on a handful of staff to manage our global operations in over 30 countries. In the course of the pilot phase we have grappled with differences in sectors, industries, language, culture and the capacities of small and medium sized companies, especially from developing countries. We have studied the process of preparing case studies and simplified our approach to prompt a larger volume of submissions from participating Compact companies. We have consulted labour and civil society organizations and academic experts from several countries and featured some of their commentary on our Web site, such as the instructive note on business analysis and methodology composed by Professor Richard Locke of MIT. These efforts are continuing and we are confident that over time this approach will bring about significant changes. Beyond the Learning Forum, we are reinforcing our capacities to expand our policy dialogues, which have proven widely popular, and most recently have focused on business in zones of conflict.

All of these measures are undertaken with the knowledge that the Global Compact is just one of many movements in the burgeoning realm of corporate citizenship. The Compact in no way supplants or seeks to be a substitute for other approaches, including government backed regulatory regimes or other mechanisms of corporate governance and monitoring. Our partnership arrangement with the Global Reporting Initiative illustrates our commitment to the compatibility of the Compact with other innovative efforts to address similar challenges.

The Compact is continuously evolving. It is an ambitious initiative that relies on goodwill and sincere action. We encourage constructive engagement and look forward to the positive contributions CorpWatch can make to this process.

In the meantime, we would request that you post this response on your website as we will post it on ours. We would also be happy to help with further information to avoid unintended inaccuracies and promote clearer understanding in the future.

Sincerely,

Michael Doyle, Assistant Secretary-General
Georg Kell, Executive Head of Global Compact

Read the Alliance for a Corporate-Free UN's letter to Kofi Annan
Read the Alliance's response to this letter

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