Global Policy Forum

Global Compact Fails to Stop Corporate Human Rights Violations, Says ActionAid

July 4, 2007

The UN flagship initiative on corporate responsibility - the Global Compact - is failing to stop corporate human rights violations, says ActionAid ahead of a UN summit on corporate responsibly in Geneva this week. "These companies are trampling over the lives of thousands of poor people, locking women and children into a vicious cycle of hunger," said Aftab Alam Khan, Head of Trade from ActionAid during the launch-week of ActionAid's HungerFREE campaign.

World leaders and global business chiefs will convene for the Global Compact Leaders Summit (5-6 July) to assess progress on the seven-year-old voluntary initiative aimed at promoting human rights standards for corporate operations. "The UN's Global Compact is flawed because it's entirely voluntary," said Khan. "What's needed are legally-binding regulations to control corporate activities with respect to human rights. It's been a mockery because several companies violating human rights have been free to join and remain in the Global Compact - benefiting from an association with the UN," he added.

More than 3,000 corporations worldwide, including Anglo American, Coca-Cola, Ericsson, Tata Steel and Fuji Xerox, have joined the Global Compact since it was launched in 2000 in an effort to encourage multinationals to voluntarily adopt ten UN standards on human rights, labour, environment, and anti-corruption. One of the key figures at the Leaders Summit will be the chairman of Anglo American, Sir Mark Moody-Stuart, who is also a member of the UN's Advisory Council for the Global Compact. He is a leading advocate of responsible corporate behaviour and urges a greater role for big business in tackling poverty in Africa.

AngloGold Ashanti (a subsidiary of the $17bn mining giant Anglo American) is operating in Obuasi, Ghana, and research carried out by ActionAid in 2006 indicated its activities were allegedly causing:

  • Rivers and streams to become polluted with arsenic and iron from past gold mining
  • Farmers to lose their livelihoods because land has been poisoned by cyanide
  • Brutality and human rights abuses involving company security guards against local men suspected of mining illegally on AGA property.

ActionAid says only a tiny proportion of the world's 77,000 multinationals have joined the Global Compact pointing to the real need for universally binding standards for all companies. Over the last few months, Anglo Platinum, another subsidiary of Anglo American (74%-owned) has entered into an explosive standoff with local communities at the Bushveld mineral complex in the Limpopo region of South Africa. "More than 17,000 people are being relocated to townships where there are no jobs and no land - their whole way of life has been taken away from them," said Khan. "We are shocked by cheap offers of compensation for the loss of these people's pastures and livelihoods."

The Compact makes no specific reference to economic social and cultural rights. The principles also neglect the responsibilities of companies with respect to development, gender discrimination, indigenous peoples, corporate transparency and tax avoidance. As part of the launch of its new HungerFREE campaign, ActionAid is calling on the UN and member states to engage seriously to agree on global human rights standards to hold all companies to account for violations of human rights and to establish effective monitoring and enforcement mechanisms.



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