Global Policy Forum

NGO Panel on Corporate Accountability

Speakers

Felicity Hill - Women's International League for Peace and Freedom (chair)

James Paul - Global Policy Forum

Kenny Bruno - CorpWatch

Lisa Hayes - Health Action International

Phyllis Bennis - Institute for Policy Studies

Quick Facts

The Global Compact with Corporations was launched July 2000 by UN Secretary General Kofi Annan. The Compact contains nine principles under three headings: Human Rights, Labour and Enviroment. Around 250 companies have signed up to this voluntary agreement including: Nike, Shell, Dupont, Rio Tinto, Volvo, BP Amoco, Bayer. A number of NGOs also signed up as supporters including the International Confederation of Free Trade Unions, Amnesty International, Human Rights Watch and Lawyers Committee for Human Rights. A number of business associations also signed on as supporters including the International Chamber of Commerce, World Business Council on Sustainable Development.

Many NGOs believe the Global Compact with Corporations is fundamentally flawed and that it endangers the integrity of the United Nations.

The Secretary General had undertaken this partnership before consultations with or approval from the General Assembly. After the fact, the 55th General Assembly negotiated an extremely controversial resolution entitled Towards Global Partnerships which was passed in the final hours of the GA session in December 2000. This resolution calls upon the SG to seek the views of all member states on ways and means to improve cooperation between the UN and all relevant partners , in particular the private sector, and calls upon the SG to seek the views of all relevant partners, in particular the private sector, on how to enhance their cooperation with the United Nations. The SG will submit a report to the next General Assembly on this matter. NGOs are encouraged to send their submissions to Secretary General Kofi Annan, United Nations, New York, NY 10017

Felicity Hill (WILPF) www.reachingcriticalwill.org

Welcome, thanks for joining us for a discussion about an issue that is proving quite controversial throughout the UN system. The Global Compact with Corporations has sparked a rigorous debate about the appropriate relationship between non-profit public institutions like the United Nations and the for-profit corporate sector. What are the costs and benefits to the UN forging closer "partnerships" with the corporate sector? What are the rules and modalities governing the activities of corporations within the United Nations? Will the Compact with Corporations ensure the upholding of international labour, environmental and human rights standards on the part of Corporations? Our panel today will address these questions.

As many of you know, the Global Compact with Corporations was launched by Secretary General Kofi Annan in July of 2000 although the idea was first floated by the Secretary General in a speech at the annual shindig for the corporate sector at Davos, Switzerland. Because 'we the people' do not get an invitation to places like Davos, we feel that it's crucial that 'we the people' are involved in these debates and have the facts and arguments. My organisation, the Women's International League for Peace and Freedom has serious reservations about the Global Compact. We worry that the rhetoric and verbal overtures to the NGO community are become more profuse and flowery, but our access to the United Nations is becoming more and more limited, and that simultaneous to this, the Corporate Sector are gaining more access to our international decision makers. WILPF also questions the tactics of this venture - we feel it sent a very bad signal at a very crucial time. Was it tactically the right or strongest move for the UN to put forth this relatively weak compact when the peoples of the world, and many governments in fact, were questioning globalisation and the antics of corporations like never before. My organisation is not alone in thinking that the UN should have taken up a stronger position because it has been under this roof that international laws and consensus agreements have been reached on wage, labour, environment and development conditions. They must not be relegated to the voluntary pile.

James Paul, our first speaker is the Executive Director of the Global Policy Forum. The Global Policy Forum website is an excellent source of information about decision making at the United Nations. www.globalpolicy.org

The Global Policy Forum has just published a paper with the Heinrich Boll Stiftung and the World Economy , Ecology and Development Association (WEED) entitled Making Corporations Accountable: A Background Paper for the United Nations Financing for Development Process. This paper goes into some detail about a number of voluntary codes, the Business Charter for Sustainable Development, the International Code of Marketing for Breast Milk Products, the MacBride Principles just to name a few. So the Global Compact is certainly not the only thing the UN has done on setting voluntary principles. But the Compact does embody a classically vague statement of principles that does not provide rules for specific situations or complaint procedures of any kind. Nor does it include any form of systematic monitoring. Instead the UN officers corporations an opportunity to exhibit their code-related "best practices" on a special website www.globalcompact.org. This allows the companies to demonstrate adherence by carefully-selected examples only. Corporations signing up are able to claim the legitimacy of a wide-ranging code under the prestigious United Nations, while only having to adhere to it symbolically.

The road to the Global Compact from 1992 onwards has been documented by Ellen Paine, her article is on our website. 1992 is a significant year - the closure of the UN's Center of Transnational Corporations marked the ascendancy of neoliberalism at the UN. Through this lens there is only one way to see development. Through this lens, state and state-like institutions simply don't work, the private sector is the only solution. And private philanthropists are now funding different UN projects, indicating an increased reliance on the private sector. Secretary General Kofi Annan quickly established relations with the private sector when he assumed his post, in particular with the International Chamber of Commerce. The ICC has been a major player in the Global Compact, ensuring that it remained toothless. It was at that level that the agreement was struck.

Kenny Bruno, our next speaker is a long time social justice and environmental activist, currently with the Transnational Resource and Action Center and CorpWatch, check out their website at www.corpwatch.org

While a few of our fellow NGOs have supported the Global Compact, there are a large number of groups that have serious reservations and have asked the Secretary General to suspend and reconsider the program.

Our specific concerns include:

1. Wrong relationship

Partnership is the wrong kind of relationship, certainly the UN should engage and dialogue with the private sector. Sometimes we have been accused of saying there should be no engagement, no dialogue, and that accusation in unfounded. We engage with corporations constantly, it's the nature of that engagement that we are discussing here. Partnerships should be between entities that share goals – the UN and corporations do not. Even though the Global Compact has toned down the partnership language, Kofi Anna still uses this term (as does the website) as a general approach to the corporate - UN relationship.

2. Wrong Companies

Known violators of human rights norms like Shell and Nike are part of the Global Compact and that, to us, is just plain wrong, despite various attempts at rationalization by the Secretary General's office. These companies are not merely violators, but leaders in advancing the ugliest sides of globalization, the side that has provoked such intense backlash. Moreover, they are unrepentant about their role. A major player in the Global Compact is the ICC, which has also played a strong role in weakening UN agreements.

3. Wrong Image

If we look at it for a moment from the corporate point of view, clearly the partnership with the UN fits in to a public relations strategy of wrapping themselves in the UN flag and saying we understand about human rights and we're doing something about it. They get the benefit of the "mutual image transfer." The UN on the other hand, gets the downside – an association with companies that are loathed by millions. In the extreme example, a company might get to use the UN logo. This would not, I repeat NOT happen with the Global Compact, but it is possible under the UN Guidelines.

4. No monitoring or enforcement.

The Secretary General's office has said that it does not have the capacity or mandate for the monitoring and enforcement, and the ICC has made it clear that this condition is a pre-requisite for business participation. So this reduces the Global Compact to what they call a "learning model," whereby best practices are publicized, and hopefully, over time push out bad practices. The problem is that the companies will define best practices. No independent body sets the standard or holds a company to it. Moreover, best practices may not be good enough to save the planet, we need something more fundamental, and we could not fool ourselves by thinking that today's best practices by BP in oil drilling will do anything to mitigate global warming.

5. Ideology

In the speeches promoting the Global Compact, the Secretary General has made it clear that he fundamentally supports the form of globalization as it exists today – open markets and free trade. The Global Compact is essentially a legitimizing project for corporate globalization, by integrating human rights, labour rights and environmental protection. But many citizen movements do not accept the current version of globalization, even if it were to given a human face. Many don't agree that we need more globalization, not less, as the Secretary General has put it. And these groups come from the north and south and represent millions of people. So it is not right for the Secretary General to take sides in this very live debate, in favor of the WTO and corporations. The compact managers have said that critics of the Compact are enemies of "openness," as if support of WTO trading regime is the definition of openness.

Our Alliance for A Corporate-Free UN has about 30 active members, with about 50 – 200 groups having signed one or more of our letters to Kofi Annan and UN agency heads. The Steering Committee includes Third World Network, TWI, FOCUS, CEO, IPS, Ibase, WEDO and IBFAN. Of the large environmental groups, Friends of the Earth International and Greenpeace International have been active.

We are supporters of the UN. We want to see a stronger, not a weaker UN. But we feel that the partnerships with business threaten to compromise the mission and integrity of the world body. We note that public support for the UN is wide, but rather shallow, and may evaporate if it is seen as yet another institution fronting for corporate globalization. We don't want to see Seattle-like demonstrations against the UN. We want it see it, someday, as a counterbalance to a weaker, smaller, subservient WTO. We want to see someday a UN that monitors and regulates TNCs, rather than allowing them undue influence in its affairs.

Lisa Hayes, our next speaker, is the Communications Director of the European office of Health Action International, www.haiweb.org a non profit global network of health, development and consumer and other public interest groups in more than 70 countries working for a more rational use of medicinal drugs. She will speak about Industry's Growing Influence at the WHO.

Clik here to find a complete report on Lisa Hayes valuable intervention.

Phyllis Bennis, our next speaker is the author of Calling the Shots: How Washington Dominates Today's UN which is on sale at the UN bookshop. She is a fellow at the Institute for Policy Studies in Washington DC. www.ips-dc.org

The growing power of corporations has been met by a growing challenge to that power. Countries of the South, excluded by the processes of the WTO and other institutions formed an alliance with people in the street and brought the WTO ministerial meeting to a halt.

The period of extreme domination by the United States in the UN, and the non-payment of dues cannot be overestimated when it comes to the Global Compact. The UN has experienced real financial crisis, being unable to pay southern countries for peacekeeping efforts. It's not surprising that other financial sources, like those of Ted Turner are more and more welcome. Lets note that Ted Turners first gift was not to the UN itself, indeed the UN does not have the ability to make decisions on how to spend that money. Instead UN agencies can compete for funds from a foundation. With his first gift, Ted Turner made it clear that he was not getting the United States off the hook, however with the second gift, he did overtly state that he wanted to encourage agreement on the issue US dues negotiated in the 5th Committee and then again in the US Congress. Let us be clear that only two thirds of what is owed will be paid under this new agreement to which Congress attached 22 conditions. One of those conditions was that the UN must be friendlier to the private sector.

The founders of the UN did not anticipate that the IMF and the World Bank would be equal to the UN but that these entities were Special Agencies of the UN, in other words, under the authority of the UN.

It's not all bad news. We need a transparent and democratic United Nations, one that involves civil society and on some issues, like the International Criminal Court we wee NGOs, states and the UN collaborating for results despite the wishes of the United States. The Sub Commission on Human Rights strongly critiqued the WTO recently and elaborated on the threat to human security as a result of macroeconomic policies. The UNDP launched what they called the Global Sustainable Development Facility which was another initiative to "partner" with the business community. It met a huge backlash and was dropped to be replaced by a Civil Society Advisory Board. These are models and examples to build on.

The UN is at risk, it is losing credibility through blue washing and the threat of the privatisation of decision making. We want to redeem the legacy of the UN. Instead of relying on large gifts from people like Ted Turner, or from partnerships with business, we want the UN to be addressing the issue of why there are billionaires in a world with increasing poverty.

Contacting the Panelists

Felicity Hill, Women's International League for Peace and Freedom UN Office 777 UN Plaza, New York, NY 10017 Ph: 1 212 682 1265 Fax: 1 212 286 8211. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

James A. Paul, Global Policy Forum 777 UN Plaza, New York, NY 10017 Ph. 1 212 557 3161 Fax: 1 212 557 3165. Email: james.paul@globalpolicy

Kenny Bruno, Transnational Resource & Action Center & CorpWatch, PO Box 29344 San Francisco, CA 94129 USA Tel: 415-561-6568 Fax: 415-561-6493. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Lisa Hayes, Communications Director, HAI Europe Jacob van Lennepkade 334-T, 1053 NJ Amsterdam The Netherlands Tel: 31-20 683 3684 Fax: 31-20 685 5002. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Phyllis Bennis, Institute for Policy Studies, 733 15th St NW, Suite 1020 Washington DC, 20005. Phone: (202) 234-9382 Fax: (202) 387-7915. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it