Global Policy Forum

Press Conference by Secretary General Kofi Annan at Headquarters on the Global Compact (July 26, 2000)

July 26, 2000


Transcript of Press Conference by Secretary-General Kofi Annan At Headquarters.

Fred Eckhard, Spokesman for the Secretary-General:  Ladies and Gentlemen, the Secretary- General of the United Nations.

Secretary-General: Thank you very much Fred.  Good afternoon ladies and gentlemen.  I just came from a very stimulating discussion this morning.  In a very unusual meeting, a group of global leaders, from business, labour unions and the civil society came together to work with us in promoting universal values and responsible business operations.  The Global Compact is about identifying and disseminating good practices at the corporate level, learning what works in areas of human rights, labour standards and the environment, and promoting it and sharing the experience with others.  It is about engaging in concrete partnership projects at the country level in the hope that these projects would be of direct benefit to the people in the countries concerned and that these are the people who need it most.  In most cases they are the people who are not sharing in the benefits of globalization.  The participants agreed to a number of next steps intended to take the Global Compact further and make it truly global and operational.  I believe an Executive Summary has been distributed to you, and I can say we are off to a good start.  I know that you are going to have a chance to talk to some of the other participants - I see Juan Somavia is here and others are coming.  I will take a few questions then leave the room and give my other colleagues a chance to speak.

Question: Mr. Secretary-General, as you know there are some NGOs, obviously, participating in your Global Compact, but there are others that have been critical from the outside.  And I think the main criticism from outside the tent, if you like, is that the United Nations is being either naive or misguided in allowing these big corporations to wrap themselves in the United Nations flag, and that this is essentially doing a deal with the devil.  How do you respond to that?

Secretary-General: Yes, I think it's unfortunate, but also not surprising that some would have that attitude.  I think what we are trying to do here is to encourage corporations, corporations that have considerable influence and reach and power, to work with us in giving meaning to some of these values that their own governments have signed on to, and basically, telling them, we have to work together to make this world a better place.  I'm not going to use the famous word, "give globalization a human face", but basically we are telling the corporations that deal with us, if you accept these values, plug them into your global operations - let it become part of your corporate structure and culture.  You don't need to wait for a government to pass laws before you ensure that your operations do not pollute the lake or water that produces fish for the people.  You don't need to wait for government to pass laws before you pay a decent wage.  You don't need to wait for governments to pass laws before you refuse to employ children.  We are asking them to tell us what they are doing.  And this will be posted on the Web.  People can check.  The trade unions are involved, civil society is involved.  Nobody is creating a sham operation here.  I think it will be very transparent and there will be accountability, because it will be visible and transparent and people will question it.  This is why I think other NGOs and the trade unions feel comfortable enough in sharing this experience.  I think time will tell whether we've just allowed people to cloak themselves in the United Nations flag and not do what they've agreed to do.  This morning there were very clear suggestions of why we should monitor -- we should be able to point out good practices as well as bad practices, and encourage people to move in the right direction.  This came from all the stakeholders -- from business, from labour and from civil society organizations.

Question:  You said in your closing statement, Mr. Secretary-General, the United Nations does not have the mandate or capacity to do what some of you today want us to do - I think you were referring to enforcement procedures, in that sense.  However, the representative of Human Rights Watch suggested that the United Nations adopt a policy of not engaging in any business contracts or purchasing from companies that do not follow the Global Compact principles, thus I guess they would have the capacity to do that.  What did you think of that suggestion?

Secretary-General: I don't think that is a bad suggestion at all.  I think that is something, as I indicated, that we will look at.  It is something that we generally try to do, not so much specifically in regard to the Global Compact, which we are going to do.  But in most of our activities, we try to stay away from companies that are acting in a manner that goes completely counter to our own practices.  I know that with some of the companies that came this morning, people said, why are you inviting these guys?  I said, some of them have come to discuss how they can improve their own practices and how they can embrace values that perhaps today they don't have in their corporations or would want to push further.  But I think the idea from Human Rights Watch is something that we are going to look at.

Question:  Mr. Secretary-General, in the 1970s the United Nations was involved in negotiations on a code of conduct for corporations.  The atmosphere of that time was not conducive to agreement.  Do you think it's now time to revisit a code with binding provisions in it?

Secretary-General:  I think what we are trying to do here by trying to implement values which have been negotiated ... take the International Labour Organization (ILO) core labour standards, which I'm sure Mr. Juan Somavia will tell you about - this has been negotiated in a tri-partite arrangement with governments, with employers and with labour.  What we are asking them to do is - these values, these principles and standards, you have agreed to implement.  We are not trying to create a new code of conduct, but trying to implement and give teeth and action to standards, which, in a way, is an easier way to go.  And in fact the climate is better today for United Nations/private sector dialogue than it was when the Council...

Question:  The problem is not with these major corporations, which have a great exposure to public opinion, but the corporations which have no public face, and which indulge in things like the smuggling of diamonds or the provision of arms in areas of conflict, in addition to labour standards.  A code would cover all that.

Secretary-General:  This morning we did touch on the issue of policy dialogue on the rules of corporations in conflict areas.  I think the work we've done in the area of diamonds in Angola and Sierra Leone gives an indication of what corporations and the United Nations can do and how they can take steps to ensure that they are not drawn into doing business with war profiteers and prolonging wars, and I think they've become very sensitive.  Also, what is important, we shouldn't forget, the public also has choices.  We all have choices.  We make choices by our individual purchases.  As the world becomes much more open, this is also a very powerful tool.

Question:  Mr. Secretary-General, you mentioned several times that you're asking in some ways for corporations to take steps beyond what national governments in some countries ask them to do under their own laws.  In cases where companies operate in countries that do not require, for example, free organization of labour, or allow free trade unions to function, how would a company, a multinational abiding by these principles, deal with that situation?

Secretary-General:  I would suggest that a company must first start with its own organization, its own workers and its own structure.  If the workers in that company were to decide to organize themselves and relate to the management through their own organization and to form a free association of that kind, whether there is a trade union law in the country or not, I hope the company will not object to that and will deal with them on that basis.  I hope, Juan, you agree with what I'm saying here.  I'm talking now to the Director-General of the ILO, who is an expert on this and so he will be able to share a bit more with you.  Basically, you don't have to wait for laws to do some of these right things.  You don't have to say I'm not letting my staff organize because there is no law in this country.  You don't have to say I'm not paying a decent wage because there is no minimum wage practice.  You don't have to say I'm going to go ahead and employ children because there is no national law against employing children.  Companies have great influence, great reach and they can set very good examples.  And in some cases, if they set the example and they all move in that direction, not only will other companies follow, the governments themselves may wake and decide maybe we should bring in laws to formalize this for all others.

Question:  On some of these companies that you say you are sure they are not pulling a sham on the United Nations and wrapping themselves in the United Nations flag, a lot of these NGOs who are not part of the partnership are saying they've made these promises before, they've joined alliances and yet the conditions are not improving.  So how can you be so sure that their commitment is real and that it will result in changes, and what is the United Nations prepared to do if it doesn't?

Secretary-General:  First of all let me perhaps restate what I said.  I said we are going to have a process which we hope will be transparent and open.  They are going to report in and it will be open to the public, to NGOs, to the human rights activists, the environmental activists and to other companies to comment on it.  And, their own workers would also know whether they are doing what they say they are doing, or not.  If I take the attitude of those who feel that things have not worked in the past and, therefore, do not engage, I don't think we would ever move anywhere.  Things may not have worked in the past, but I think we have something useful here, that if we work on it together, and if you had been in the room this morning, I think I walked away encouraged that the partners in the room were determined to see this work.  They also see it as in their business interest - they are not doing it just on the humane sort of side of things.  They saw what happened in Seattle, they saw what is happening around the world and they are very sensitive.  I will tell you there are businessmen out there who are sensitive to these things.  Not all of them are sort of rapacious and just greedy.  I hope those are the ones who will work with us and set an example in pulling others along.

Question:  Mr. Secretary-General, when I look at the list that you have here for the Global Compact, I don't see a lot of corporations from African nations or underdeveloped nations.  Michael Posner, Executive Director of the Lawyers Committee for Human Rights, mentioned earlier about freedom of association.  How would you go about associating NGOs from third-world countries?

Secretary-General: I think there was a very interesting suggestion that came up this morning.  The suggestion was that we should try and replicate what we are doing here today at the country level, and have the business people, the United Nations Development Programme (UNDP) representative, the NGOs and the civil society and labour unions come together and try and do some of these things at the national level.  On your first question, that there are not many companies from Africa or from this or that region, let me say that we invited companies to join as a voluntary sort of process.  What is more important is that most of the companies on the list may not have their headquarters in Africa, but they are doing business in Africa.  The idea is that in their corporate activities, whether in Africa, Asia or Latin America, that they accept these values and apply them and make sure they are part of their corporate culture, and make sure they do the right thing in Africa and Asia.  So the question is not where the company is registered, but how they operate and what they do when they are operating in Africa or Asia.

Question:  Mr. Secretary-General, how would you explain to people of the third world, people in underdeveloped countries, to whom some of these corporations actually represent abuses of human rights, to people who have lost family members because of these corporations, how would you explain to them that the United Nations, a symbol maybe of peace to many people, is actually entering into collaboration with large corporations.

Secretary-General:  I think I would put your question the other way - why is the United Nations cooperating with the big corporations?  We are cooperating with them for the reasons that I have said, for the influence they have, the reach they have, the impact that their activities have on the lives of the people that you are talking about.  I'm not sure if the sort of discussions we are having now had been persistent and had gone on over the past 20, 10 years, that some of the people who have suffered may not have been spared.  The fact that some of these companies may have made mistakes, may have done the wrong things, does not mean that we should not encourage them and work with them in moving in the right direction, in doing the right things and being sensitive to the needs of the people in the society in which they operate.  This is where we perhaps part ways - some believe that one should not engage the companies.  The companies are part of our reality.  They are going to be operating in your country, my country and all over the world.  I think it is important that we engage them and work with them in improving worker conditions and getting them to respect the environment in which they create their fortunes, and also respect their workers.  I don't see any contradiction there at all.


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