Picture Credit: UN Photo/Paulo Filgueiras
During his time as Secretary General, Kofi Annan worked vigorously to improve relations between the United Nations and the private sector, mainly with transnational companies. The UN and its agencies have struck hundreds of agreements with private firms for joint development projects and other initiatives. Most significantly, Kofi Annan proposed a "Global Compact" between corporations and the UN. Hundreds of companies have signed on, but many NGOs say the UN is compromising its integrity and providing a public relations cover for corporate malefactors.
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In 2010, the UN’s Joint Inspection Unit (JIU) reviewed the Global Compact. This report highlights the absence of an acceptable regulatory and institutional framework, lack of vetting of participants, and the problematic setup of the Global Compact Office (GCO) that counters existing rules and procedures of the UN. The JIU recommends Member States involvement to provide a clear mandate for the GCO and to prevent influence from “external actors” i.e. major corporations. (Joint Inspection Unit)
The Global Compact Office called the release of its new governance framework, "a constitutional milestone in the evolution of the Global Compact." However, like the old governance framework, the new document provides no specific means to hold members up to standards of corporate social responsibility. According to the new governance framework, "the initiative is not designed to monitor or measure participants' performance." (Global Compact Office)
This United Nations report provides an overview of the existing corporate social responsibility initiatives and standards. It also discusses the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, and makes recommendations on how to advance the dialogue between states, transnational corporations and other stakeholders. (UN Comission on Human Rights)
In 2000, Secretary General Kofi Annan launched The Global Compact – an international initiative aimed at promoting "responsible corporate citizenship." The Compact asks participating companies to embrace ten principles in the areas of human rights, labor standards, environment and anti-corruption. While the norms appear to be an important step towards corporate accountability, the lack of an enforceable legal framework often means that they are little more than a public relations cover for global wrongdoers. (UN Global Compact)
The UN Sub-commission on the Protection and Promotion of Human Rights
adopted norms stating that "transnational corporations ..., as organs of society, are also responsible for promoting and securing ... human rights," including the right to development. While those norms signify an important step towards codification of corporate accountability, they do not include binding monitoring mechanisms. Also see Amnesty International's booklet
on the UN Norms. (UN Comission on Human Rights
The UN declared 2013 as the International Year of Water Cooperation in light of growing pressures on water resources and an increased need for cooperation. With World Water Day on March 22nd drawing close, former water advisor to the General Assembly Maude Barlow cautions against the growing influence of the private sector in water related matters within the UN. Through participation in the World Water Development Report and the CEO Water Mandate of the UN Global Compact, water conglomerates are able to exert greater influence on global water policies. This contradicts the 2010 UN recognition of the human right to water and sanitation. Tom Slaymaker of WaterAid draws attention to the 780 million people without access and calls for reassessment of the partnerships needed for achieving universal access after the MDGs expire in 2015. (IPS)
This report of the Special Representative of the Secretary General (SRSG) John Ruggie, addresses the question of human rights and transnational corporations. Ruggie writes that these companies possess "global reach and capacity," acting at a pace governments cannot match, making corporate involvement essential in curbing human rights abuses. Ruggie insists that progress has occurred in this area, yet only 80 corporations of the â€˜Fortune 500' group even responded to the SRSG's survey on human rights practices. (United Nations)
This report by the Commission on Human Rights was compiled in response to a resolution concerning initiatives in "human rights and the extractive industry." The consultation brought together senior company executives, experts in particular sectors and NGO participants. Presenting the different viewpoints of these groups, the report discusses human rights abuses, existing standards and initiatives of corporate responsibility. (UNHCR)
By adopting this resolution, the United Nations Commission on Human Rights decided to appoint a special representative to outline global human rights standards for corporate responsibility and accountability. While many NGOs welcomed the decision, three countries, the United States, Australia and South Africa, voted against the resolution, accusing it of having an "anti-business agenda." (UNHCR)
An official UN statement about the future of the Global Compact shows that the UN is increasingly giving in to corporate demands. UN Secretary General Kofi Annan stresses that the Global Compact should "ensure financial sustainability with a business model that generates funds from governments, participants and foundations." The focus on the development of a "new business model" further waters down the integrity of the Compact and its ten "best practice" principles. (UN Global Compact)
This paper identifies the limitations of "voluntary corporate initiatives" like the UN Global Compact. Since many economists believe that transnational corporations undermine world development, UN involvement in such initiatives is problematic. (United Nations Research Institute for Social Development)
UN Deputy Secretary-General Louise Fréchette replied to the heads of four civil society organizations who had raised concerns over the UN Global Compact. Mr. Fréchette encouraged the NGOs to continue participating in the Compact, promising to address the concerns at the next Advisory Council. (UN Global Compact)
A sub-committee of UN Human Rights Commission has established a set of human rights norms and guidelines for transnational corporations. The Committee calls on the UN and other international bodies to enforce the standards via regular monitoring. (UN Commission on Human Rights)
A press release from the UN Global Compact website claims Egypt as the latest country to become enamored with the UN project on corporate responsibility. (UN Global Compact)
Congolese business leaders and UNICONGO are raising awareness of the HIV/AIDS epidemic and the rights of workers living with the disease. (UNDP
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Global Policy Forum's Jens Martens gives a critical analysis of the 2008 report by UN Special Representative for Business and Human Rights John Ruggie – "Protect, Respect and Remedy: a Framework for Business and Human Rights." Martens calls the report "a description of the status quo" that does not leave the door open for developing new ideas on international law and corporate responsibility. Martens offers concrete steps, based on Ruggie's recommendations, towards increasing corporate accountability, such as creating an International Advisory Center, using Security Council sanctions and strengthening national complaints mechanisms.
One day before UN Secretary General Ban Ki-Moon chaired the second "Global Compact Leaders Summit" in Geneva, a group of NGOs sponsored a hearing to assess the UN corporate initiative. Speakers addressed the failure of the Global Compact to hold its signatories accountable for basic human rights, as well as environmental and labor standards. The speakers also discussed how many translational corporations exploit their Global Compact memberships to advance their public relations, and oppose initiatives calling for binding international regulation and "effective independent monitoring and auditing" of corporate activity. (Global Policy Forum Europe)
This Global Policy Forum-Friedrich Ebert Foundation joint paper analyzes how UN relations with NGOs as well as the corporate sector affect international policymaking and multilateralism. The author, GPF-Europe's Jens Martens, warns that "despite the image of greater flexibility and efficiency," such partnerships could increase businesses' influence in politics while impeding long-term development strategies. Martens therefore calls for a system to regulate the UN's interaction with corporations, ensuring that profit-driven initiatives do not overshadow public interests.
23 organizations call on governments and the UN "to examine critically the Global Compact and the corporate partnership approach it represents, and to deliver real corporate accountability in a legal framework."
Global Policy Forum takes a position on corporate power and the battle over global public policy at The United Nations.
This report by Friends of the Earth International reveals the increasing influence of major corporations and business lobby groups within the UN. The UN’s willingness to partner with businesses undermines the UN’s ability to address the role of major corporations in causing environmental, social and economic problems. The report focuses on the “greenwashing” of the global economy through the concept of “Green Economy,” questionable accountability of the Sustainable Energy for All (SE4ALL) initiative, promotion of business interests at the International Fund for Agricultural Development (IFAD), “financialization” of nature in the Convention on Biological Diversity (CBD), “commodification” of water, and the Global Compact “bluewashing” unaccountable corporations. (Friends of the Earth International)
The UN Global Compact (UNGC) Office refuses to apply its Integrity Measures to a complaint made by NGOs about the Global Compact participant PetroChina. The NGOs accuse PetroChina of being complicit with the Sudanese government in the human rights violations in Darfur. While the UNGC Office's policy is to have broad engagement by companies in the Global Compact, the NGOs believe that individual companies should be challenged to live up to the principles of the UNGC in order to remain participants. (Global Compact Critics)
John Ruggie, UN special representative for business and human rights, argues against legally binding rules for transnational corporations under international law - a policy that GPF has long advocated. Defending his position, Ruggie argues that it takes a long time to negotiate a treaty and governments may evoke the negotiations as a pretext to not take any action on a national level. Ruggie further argues that enforcing a treaty would be difficult, rejecting the idea of an international court for companies. (Business and Human Rights)
In this letter, NGOs from all over the world ask UN Secretary General Ban Ki-moon to withdraw his support for the Global Compact CEO Water Mandate – an initiative between the UN and transnational corporations. The supporters of the initiative argue it will counter the global water crisis. However, NGOs say the CEO Water Mandate seeks to increase corporations' control over water sources. Many corporations, such as Coca Cola and Nestle, have great interest in doing this, as they depend on water for the production of their products. But, the NGOs argue, water is a basic human right and its control should be in hands of local communities and elected governments. (Corporate Accountability International)
ActionAid warns that the Global Compact cannot prevent corporations from violating human rights. Aftab Alam Khan, Head of Trade from ActionAid, claims that the Compact is faulty because it does not hold any of its signatories accountable for violations. Companies like Anglo American and its subsidiaries, which have joined the Global Compact, continue to pollute rivers and abuse their employees in Ghana and South Africa. The article urges the Compact to introduce legally-binding regulations and also hold corporations responsible for their policies "with respect to gender discrimination, indigenous peoples, corporate transparency and tax avoidance."
At the "Public Eye on the Global Compact," a conference held parallel to the UN Global Compact Leaders Summit in Geneva, a group of NGOs raised doubts about how effectively the Compact can promote corporate social and ecological responsibility. Daniel Mittler of Greenpeace International insists that the Global Compact should disassociate itself from companies like Areva and RWE which are using their membership in the Compact to promote dangerous nuclear and coal plants as a solution to climate change. (Berne Declaration)
An international NGO coalition responds to UN Special Representative on Business and Human Rights John Ruggie's interim report on human rights and transnational corporations. In a call for more clearly defined standards to "ensure business does not infringe human rights," the NGOs urge the Special Representative to critically analyze legal developments to increase corporate accountability. (International Network of Economic, Social & Cultural Rights)
This report raises strong doubts about voluntary approaches to Corporate Social Responsibility (CSR). The study, which examines seven different cases and initiatives (including the UN global compact), shows that, in the absence of binding standards for corporate behavior, the finance sector consistently undermines efforts to reach development targets in both poor and rich countries. Binding standards and sanctions for transgressions could make corporations accountable for their social and environmental impact. (Corporate Responsibility Coalition)
The International Network for Economic, Social and Cultural Rights - Corporate Accountability Working Group reports on human rights abuses in the extractive industry. As companies exert an increasing amount of influence globally, governments, especially of poor countries lack the power to regulate and hold companies accountable for breaches of human rights. The Working Group recommends that the UN develop a single set of human rights standards to include companies, governments and communities, while building government capacity to make these standards enforceable.
This report by the Transnational Action and Resource Center (TRAC) identifies certain weaknesses of the UN's Global Compact and advocates a 'Corporate-Free United Nations'.
United Nations Research Institute for Social Development commissioned over 50 researchers from 35 countries to look into the social effects of institutional and policy reforms of the 1990s. Chapter 5 of "Visible Hands,
" the resulting report, deals with multinational corporations. (UNRISD
After a year-long campaign by TRAC, UNDP finally abandoned its perilous partnership through the Global Sustainable Development Facility with a group of TNCs. After claims that the tarnished human rights and environmental records of TNCs threatened to rub off on the world body, the GSDF was finally collapsed. (TRAC Press Release/Corporate Watch)
Non-governmental organizations are pressuring the UN to strengthen its regulatory roles on transnational corporations. When domestic regulations are weakened under "free trade" and international regulations are unable to keep up the pace, it will be even harder to control private business behaviors. (UN Wire)
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This recent Reuters’ report sheds light on the increasing influence of the private sector in policy-making at the World Health Organization. WHO now promotes "industry-led self-regulation" as an alternative to legal standard-setting. Leading food and beverage corporations participate in the decision-making of WHO’s approach to nutrition and Coca-Cola, Nestle, and Unilever largely fund projects and conferences. Not to mention that some WHO advisers have strong ties to the industry. Such association is particularly visible in Mexico, the country with both the world’s highest rate of obese adults and the highest consumption of Coca-Cola. While the UN promotes corporate responsibility by championing its Global Compact, this “partnership” with the industry raises serious concerns about the ability of the organization to remain impartial and impervious. (Reuters)
UN secretary general Ban Ki-moon has appointed Unilever’s CEO Paul Polman to a UN panel on the post-2015 development agenda. As more businesses realize they can benefit from “development,” the UN has been reaching out to the private sector’s resource and technical capacity. However, “just because there’s a business case for development doesn’t necessarily mean there is a development case for business”— development by consumer-driven capitalism is not sustainable, does not reach the poorest of the poor, and could be tokenism for profit-driven businesses. (Guardian)
In today’s interconnected world, the financial sector needs a global level regulation of our financial system. Persuading businesses to act ethically and sustainably is insufficient by itself, and national level laws have proven to be inadequate. There should be incentives for acting ethically and sustainably, and the costs of acting irresponsibly must be raised. The UN Global Compact, and other similar measures, are too weak because they rely on voluntary measures by companies. International financial law must be strengthened so that acting ethically is thought to be integral to a good corporate business strategy. (Guardian)
The UN has worked closely with private water corporations to address the global water crisis. However, NGOs claim that the relationship between these corporations and the UN has become too intimate. A Council of Canadians Report, endorsed by 139 organizations, asserts that private corporate interests exercise undue influence over UN water policies. NGOs are lobbying against the grant of Economic and Social Council (ECOSOC) consultative status to AquaFed, a lobby group of private water operators, arguing that ECOSOC should be a forum "that is free from corporate conflicts of interest."
The Global Compact is a UN project which claims to promote core UN principles through collaboration with business. This business alliance model represents a departure from the standard modus operandi of the UN and has proven highly controversial, especially in NGO circles. The Global Compact has now come under fire from the UN's own watchdog, the Joint Inspection Unit (JIU). JIU claims that the Global Compact legitimizes corporate actions, but does not adequately monitor the compliance of corporations with UN principles. The UN risks damaging its reputation by legitimizing corporate activities that are potentially at odds with its core principles. (Fox News)
The UN has established and increasing number of partnerships with transnational companies. This paper questions the corporations' contribution to basic UN goals such as poverty reduction and equitable development. It argues that the UN presents the partnerships in an idealized way. Instead, the UN must practice more critical thinking and consider the broader implications of relationships with the private sector. (Journal of Business Ethics)
Secretary General Ban Ki-moon called for the launch of a "Global Compact 2.0" as part of the solution to the crises discussed at the World Economic Forum of 2009. This article argues that the original UN Global Compact ignores the fundamental reasons why transnational corporations commit human rights violations, such as their search for deregulated labor markets to increase profit. The Global Compact increases and legitimizes the power of companies to determine the rules of their own conduct, instead of enforcing respect for freedom of association and empowering public authorities to uphold human rights. (Global Compact Critics)
This paper argues that the UN Global Compact marginalizes civil society, lacks transparency and gives transnational corporations a privileged relationship with the UN. Further, the Global Compact cannot hold TNCs responsible for their actions and has no power to ensure any implementation of the agreements that the TNCs have signed. The author argues that the inefficiency of the Global Compact results from it being launched by corporate lobbyists to "pre-empt" other UN initiatives to regulate practices of TNCs. (The Fourth Transatlantic Dialogue, Workshop 1)
This article claims that the growing importance of transnational actors, such as NGOs and businesses, threatens to undermine the founding UN principle of "division of nation-states." The author advises the UN to cooperate more closely with these organizations, in order maintain its moral and intellectual leadership. Otherwise, new actors, including governments, companies or NGOs may step in to fill the role the UN currently holds. (Harvard Political Review)
This essay argues that the UN Global Compact – with its vaguely defined principles and lack of both monitoring and independent review – enforces the power of transnational corporations. The author questions the ideas that shape the Global Compact, specifically that poor countries must "cater to the needs of transnational corporations" by looking for market-based solutions instead of developing government-led reforms to ensure basic social and environmental protection. (Routledge)
A group of NGOs criticized the UN Global Compact for giving legitimacy to companies even when they violate the initiative's ten principles on labor, human rights, the environment and anticorruption. The NGOs said that the most critical aspect is the complete lack of legal enforceability. Companies who join the initiative benefit from being associated with the UN, but they face no consequences when not adhering to the principles. A Greenpeace spokesperson stated that "the world needs action and binding global codes for corporate behaviour." (Inter Press Service)
John Ruggie, UN Special Representative on transnational corporations and advisor to the Global Compact, stated in his February 2007 report to the Human Rights Council that transnational corporations "should not be placed under international law." The author argues that Ruggie's ideas are in line with the philosophy behind the Global Compact, which promotes weak voluntary guidelines rather than binding international regulation requiring companies to respect basic human rights and labor standards. The article criticizes Ruggie's – and the UN's – failure to acknowledge the "serious economic, political and social problems represented by the disproportionate power of large transnational corporations." (Transnational Institute)
Programs such as the "Extractive Industries Transparency Initiative" and the "UN Global Compact'" have helped create public debate and possibly higher levels of corporate and political awareness about human rights and environmental problems. But as the initiatives are voluntary and unsanctioned, skeptics argue they just allow companies to appear socially responsible while not fundamentally changing operations. The author of this Policy Innovations article sees a future for genuine corporate social responsibility in legally-binding loan agreements incorporating respect for human rights and environmental standards. These would exist between transnational corporations and the private banks financing them that have a "lower reputational risk tolerance."
The author of this Ethical Corporation piece argues that NGOs should not blame multinational firms for human rights violations but instead seek accountability from states. However, such an argument overlooks how big companies sometimes push governments for "favorable deals" that further corporate interests. NGOs demand that UN Special Representative on Business and Human Rights John Ruggie call for "universally recognized standards and effective accountability mechanisms" in his final report.
The UN Global Compact calls on participating corporations to embrace corporate social responsibility through its ten principles on human rights, labor standards, the environment and fighting corruption. In this interview, Executive Head Georg Kell tells Ethical Corporation
that the Compact's next campaign focuses on transforming capital markets by developing tools to better prepare organizations "to manage risks and opportunities" in investment. Critics will likely challenge the legitimacy of this initiative, as core funding will come from Compact participants.
Instead of "trumpeting" the limited success stories of responsible corporate behavior the UN should keep better tabs on corporate responsibility. The sourcing of companies' products and services from abroad makes it increasingly difficult to regulate corporate activity on a national level. Activists also argue that the UN must pay more attention to environmental issues, such as the right to water, and prevent corporations profiting from these resources. (Inter Press Service)
Since national governments regulate human rights standards, multinational corporations often abuse human rights and labor in countries with weak legislation. While some corporations adhere to a reasonable labor standard, others may claim to do so just as a public relations stunt intended to further corporate profits. The author calls for binding international standards to create and enforce labor standards throughout the world. (Business and Human Rights Resource Center)
Transnational corporations represent the most powerful actors on globalization's scene. Social responsibilities should accompany their economic power. This article argues that initiatives like the United Nations "Global Compact," based on a "voluntary" approach, are not able to guarantee decent human and labor rights standards. Instead, mandatory rules on companies could address this challenge. (onPhilanthropy)
The final report of the investigation into the Oil-For-Food program found that over 2,200 corporations worldwide had a role in the scandal. A number of these corporations, which paid bribes and kickbacks to Saddam Hussein's regime, are also members of the UN Global Compact. When signing the Global Compact, businesses pledge to "work against corruption in all its forms, including extortion and bribery." (Associated Press)
Without standards of accountability, the Global Compact is "mere window dressing" for corporate social responsibility, writes Thorsten Benner of the Global Public Policy Institute. Although Secretary General Kofi Annan continues to ensure that the UN "remains open for business," corporations should be involved in international law only under strict oversight. (International Herald Tribune)
The UN Global Compact Office has announced the first results of a policy requiring corporate participants to annually report their progress in implementing the Compact's Ten Principles
. Although over 60% of committed companies failed to produce the Communication on Progress report, this landmark measure will hopefully be more than a public relations tool and actually raise the bar on corporate transparency and accountability. (GreenBiz
According to this article, the business sector has systematically invoked voluntary codes of conduct such as the UN Global Compact "to quell widespread public concern" with unregulated corporate activity. By virtue of being non-binding and business-driven, such codes make it difficult to curb destructive corporate behavior. Therefore, the author warns, advocates for social and economic justice as well as the United Nations itself should cast a cautious rather than optimistic eye on corporate efforts at accountability. (Center for Global, International and Regional Studies).
Links and Resources
A UN web site maintained by the United Nations Global Compact Network - an effort to promote Annan's "Global Compact" proposed at the World Economic Forum in Davos in 1999. Includes press briefings, the ten principles of the compact, and the partners of the initiative. Also see some statements on the Global Compact by UN officials and NGOs.
The UN's web site on initiatives with business includes statements, press releases, case studies and further information and developments. The Un has also compiled some Fact sheets
on some of the projects in the UN & Business partnership.
Many organizations assist transnational corporations in their efforts to lobby both international and domestic policy makers for business-friendly policies. In addition, rich governments fund ministerial forums, think tanks, and lending institutions that support market liberalizing initiatives. Yet, should major corporations have special privileges to "develop" poor communities for corporate profits? Here is a list of links to the websites of business and government alliances.
As a partner of Amnesty International and academic institutions, this non-profit organization provides an online library composed of links to a wide range of materials published by companies, NGOs, governments, intergovernmental organizations, journalists, and academics on corporate misconduct, as well as "best practices" by companies.