Global Policy Forum

By Marwaan Macan-Markar

In his quest to make transnational companies responsible corporate citizens, UN Secretary-General Kofi Annan threw them a challenge in July, inviting them to be partners in a Global Compact. And already, says a ranking UN official, a number of companies have responded to that invitation. They have expressed interest in upholding the universal principles identified in the Compact, including the promotion of human rights and labour rights in all their investments. ''Many concrete activities are taking shape,'' affirms Georg Kell, a senior officer in the Executive Office of the Secretary-General. ''Companies are retooling their approach because of their pledge to human rights.''

Similar evidence, in fact, has emerged from another quarter, too. Shortly before Christmas, seven leading oil and mining companies from the United States and Britain pledged to back a set of voluntary principles shaped by the governments of those two countries. Consequently, this endorsement by the seven companies - including Chevron, Texaco, BP Amoco, Shell and Freeport MacMoran - came in for high praise by Madeline Albright, the US secretary of state. It is ''a landmark for corporate responsibility'', she was quoted as having told the US media.

For the New York-based Human Rights Watch (HRW), this development was also perceived as an important milestone, given that the principles call on the companies to act decisively to stop ''abuses by public or private security forces'' protecting company investments. ''In an area where no standards exist, we see the development of some guiding principles as a positive first step,'' says Kenneth Roth, executive director of HRW. Yet such progressive steps during the course of this year have still to convince monitors of the global corporate culture that significant change is underway. Scepticism stems from the evidence some of these monitors have unearthed about the manner in which transnational companies have continued to function in the developing world.

According to Kenny Bruno, for instance, the proliferation of voluntary codes of conduct have only resulted in ''piecemeal progress''. But in the main, adds Bruno, a spokesman for Corporate Watch, a San Francisco-based non- governmental research organisation, ''we do not see a serious commitment towards human rights principles by transnational corporations by and large''. That lack of commitment, in fact, was confirmed this month in a study released by the National Labour Committee for Worker and Human Rights, a New York-based non-governmental organisation (NGO). It singled out five global firms for selling goods produced at factories in Asia and Central America where workers were ''exploited''.

This NGO charged, furthermore, that child labour was also used by four companies to manufacture clothes. Among them was Nike Inc. and Wal- Mart Stores Inc. What is more, HRW drew attention to a case heard in a US district court in August that exposed the poor rights record of an oil transnational. The company in question, the California-based Unocal, was accused of a number of rights violations in its gas pipeline venture in Burma, states HRW in its annual report on the state of human rights worldwide, which was released this month.

According to the plaintiffs in this case, Unocal was liable for human rights violations, including forced relocations, forced labour, rape, and torture ''perpetrated by the Burmese military in furtherance and for the benefit of the pipeline'', the report adds. However, the judge dismissed the case saying that under US law Unocal was not liable for these abuses, but, he pointed out in his ruling that ''evidence does suggest that Unocal knew that forced labour was being utilised and that the joint ventures benefited from the practice''.

There are other factors, too, that have lent weight to the doubts over the face-lift transnational companies gave themselves this year by committing to invest in human rights. And foremost among them is the absence of a monitoring system to assess the behaviour of the firms who have pledged to be responsible corporate citizens. For Sarah Anderson, of the Washington D.C.-based Institute for Policy Studies (IPS), the UN's Global Compact illustrates this lapse.

''The Global Compact has many flaws and may not do much to strengthen enforcement of human rights. Corporate participation is voluntary and there is no monitoring or enforcement mechanism,'' argues Anderson. This lapse, she adds, cannot be ignored in light of the immense backing transnational companies have received. ''It is clear that the trend in the World Trade Organisation and in other trade and investment polices has been to give (these global firms) more and more powers and privileges to operate freely around the world.''

On the other hand, she points out, workers and communities where transnationals set up investments have ''not received any new powers to ensure that corporations behave responsibly''. Such imbalances, however, were not lost on human rights organisations determined to challenge the oft repeated line, ''Human rights is not the business of business''. The London-based Amnesty International (AI), for instance, made such a push this year by launching a campaign in April on the theme ''Human rights is the business of business''.

What AI sought through such a drive with the support of two other British organisations, the Ashridge Centre for Business and Society and The Prince of Wales' Business Leaders Forum, was to compel the world's business leaders that ''social and ethical issues'' need to be factored into global investment strategies. But has such a message been heeded by the corporate elite? No, says Bruno. ''We see resistance to national and international measures that would hold corporations up to certain standards.''

What is more, reveals the Washington D.C.-based IPS in a recently released report, 'Top 200: The Rise of Corporate Global Power', leading corporations have fiercely opposed attempts that require them to ''achieve a higher level of transparency''.

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