Global Policy Forum

By C. Gerald Fraser

Cynics and skeptics, as well as visionaries and true believers are these days giving United Nation Secretary General Kofi Annan's Global Compact an airing. Two years ago, at the World Economic Forum's annual meeting in Davos, Switzerland, Kofi Annan, proposed that "the business leaders gathered in Davos, and we, the United Nations initiate a global compact of shared values and principles, which will give a human face to the global market."

Since then the idea of a connection between multinational corporations and the UN has been intellectually scrutinized, most often by a variety of nongovernmental organizations (NGOs), governments, and corporations. Some say a partnership between the UN and the private sector--primarily multinational corporations--for its own sake is useless. Others say a UN-private sector partnership is inevitable. Recently, the German Mission to the UN and the German-based Friedrich Naumann Foundation sponsored a day-long seminar: "Global Partnerships--The United Nations and the Private Sector: Concepts for International Cooperation."

Morning and afternoon sessions took place in a spacious, multi-windowed conference room on a high floor of the German Mission with a luncheon in the UN's Delegates Dining Room. Several dozen diplomats and representatives of corporations and NGOs attended. Germany's UN ambassador, Dieter Kastrup, opened the discussion saying that although "non-state actors have become an important factor on the domestic as well as the international scene,"there is no agreement yet on how civil society and the private sector fit into the UN's work. Outside of the UN, Kastrup said, the NGO community cautions against opening up the UN to the private sector. And governments, he said, see the security and welfare of their people as their responsibilities. Germany, he said, believes that the fact of partnerships in UN work has to be accepted.

Speaking for the Naumann Foundation, Walter Klitz said a partnership cannot replace good government, but the UN is the "global knowledge center" that can enable a partnership to work effectively. The foundation maintains an office in Washington and Klitz is the Resident Representative.

In support of the Global Compact, the Netherlands' UN ambassador, Dirk Jan van den Berg, told the audience that the private sector should be included in certain UN issues because international corporations have no borders, they do have know-how, their support is valuable, and they can be a source of funds. The Global Compact tries to convince companies to adopt UN values and it will induce companies to invest in developing countries, he said.

Another UN diplomat, the chair of the Group of 77, Ambassador Bagher Asadi of Iran, said the UN-private sector partnership "has been on the rise" for some time. The most advanced example of this, he said, has been Unicef's relations with a variety of corporations. (Later, it was noted that these relationships are usually short term and for specific projects.) The ambassador's concerns included the question of sovereignty within a developing country, the substituting of private sector money for official development assistance, and the usually profit-centered private sector's raison d'íªtre for partnering. "Where to strike the balance?" the ambassador asked.

During a question and answer session, a panelist, Phyllis Bennis of the Institute for Policy Studies, in Washington, said "the point is what is the basis of the partnership? I don't believe corporations and the UN share values."

During an afternoon panel, spokesman for the Daimler Chrysler Corporation, Norbert Otten, cited his corporation's work on a poverty and environment program in the Amazon. There, new methods of agricultural reforestation were "explored." Out of that exploration came a "small site manufacturing head rests, back rests of driver's seats and other automotive parts all made out of natural fibers," Otten said. "We don't believe corporate responsibility should be dictated," he added, "but we do believe that partnerships, public-private partnerships with relevant parties such as governments and NGOs will be vital for our future success."

The Global Compact has to be assessed, said Clarence Diaz, in view of two occurrences. One is the shift from development through aid to development through trade and investment. The other is a global market created by the spread of economic globalization. Such globalization removed barriers to global trade and investment, inspired deregulation, privatization, tax reduction, and less government money for social welfare programs and basic services.

Diaz, of the International Center of Law and Development in New York, said the issue is: "In what aspects of the UN's work and for what purposes is the private sector to be involved." Corporations can provide services, technical know-how and expertise in development, humanitarian assistance, natural disaster management and other UN operational activities, he said. Globally, they can carry and disseminate UN values. But, he cautioned, if corporations are viewed as a source of funding and development financing "One must heed the caveat that 'he who pays the piper calls the tune'." Diaz also said some corporate lobbyists would like to bring the private sector into UN decision-making processes, "and here the battle lines are drawn rather sharply."

Diaz believed that private sector, or global market principles and values clash with global values as expressed in the UN Charter: development, gender equity, protection of the environment, human rights, and peace, broadly conceived. "The manner in which economic globalization has been achieved so far raises serious concerns in respect of the global values of the UN, he said. "For the Global Compact to work," Diaz said. "it must be binding. It must also address transparency, participation by UN member governments, NGOs, trade unions, and professional organizations; monitoring by an independent UN entity; a grievance procedure; and universality, no one should be outside the compact."

From the UN viewpoint, what has to be negotiated, Diaz said, is in what aspects of UN work to bring in the private sector, with what privileges and responsibilities, with what safeguards, and how to bring in what partners. Naeem Sarfraz, chairman of the Human Rights Institute of Pakistan, said "The final test for global values is a very simple one--apply the same values in Asia, Africa, etc., as you apply in America and Europe. For human rights use the Universal Declaration for guidance and for the environment use the World Bank's standards."