UN - Business Partnerships: Whose Agenda Counts?


By Peter Utting

Third World Network
July 27, 2001
Partnerships involving the United Nations and transnational corporations (TNCs) are currently in vogue. Their rationale seems clear enough—they can yield various benefits in terms of resource mobilisation and the promotion of certain values and forms of governance. Potentially, they provide an important means of tapping the considerable resources, technology, competencies, creativity and global reach of the business community and employing these for developmental and ethical goals.

They may also serve to raise the profile of human rights, labour standards and environmental issues, in a world somewhat fixated on market economics and corporate profitability. And they may offer a way to deal with complex global problems by relying not only on state-based institutions, but also the private sector and civil society.

There is also, however, a potential downside to partnerships that is often overlooked. Various UN institutions appear to be paying insufficient attention to certain risks associated with partnerships, including conflicts of interest, self-censorship, the poor choice of partners and the tarnishing of the UN's reputation. As the partnership phenomenon takes off, it is useful to bear in mind the tensions and pitfalls involved. There are, in fact, a range of interests and agendas underpinning partnerships, some of which can be fairly self-centred and give rise to various questions about the supposed ‘win-win' status of partnerships and their contribution to social and sustainable development.

One such agenda has to do with the dominance of neo-liberal ideology, which emphasises, among other things, market liberalisation and a reduced role for the state in regulatory activities. So-called ‘voluntary initiatives', which include partnerships, have become the preferred way of encouraging business to act responsibly.

Relatively few companies, however, have significantly improved their social and environmental record through a voluntary approach. Legislation and intergovernmental agreements remain important components of a strategy to promote corporate responsibility.

A key question, then, is whether voluntary initiatives in general and partnerships in particular are part of a broader agenda that aims to further weaken the regulatory role of the state and intergovernmental bodies. Rather than complementing regulation, are voluntary initiatives attempting to replace it?

The trend toward partnerships is also encouraged by changes in patterns of corporate governance. Some companies are responding to the competitive pressures associated with globalisation by giving more attention not only to investors and customers, but also to a wider group of stakeholders. Such firms often seek to minimise confrontation and engage in dialogue.

UN-business partnerships can be part of these strategies. They may enhance a company's relations and reputation with various stakeholders, and boost its profile and image in localities around the world where it is linked to UN agencies or projects. From the perspective of the corporation, partnerships may have more to do with seeking competitiveness and legitimacy rather than the humanitarian or developmental goals of the UN.

Another force underpinning partnerships is the rapid growth of philanthropy and sponsorship among certain sectors of the business community. Philanthropic activities often increase when a company is facing tighter regulation and/or is being criticised for socially irresponsible behaviour. To what extent, therefore, are partnerships part of the efforts of big corporations to enhance their public image, irrespective of whether the companies in question merit a good reputation?

Partnerships have also been encouraged by the crises affecting both overseas development assistance and UN finances. In the 1990s, restructuring and budget cuts were the order of the day in many UN agencies. In this context, the private sector came to be seen as a potentially important source of alternative funding. When considering the pros and cons of partnerships, it is important to ask whether UN agencies are pursuing a narrow financial agenda. If they are doing so, are they compromising their values, standards and conventional agenda for financial reasons?

What the above analysis suggests is that partnerships should not be seen simply as pragmatic win-win relationships where two or more actors or stakeholders come together to work toward a common goal. Multiple agendas may be involved, and from these agendas various problems may arise. In practice, four types of problems appear particularly worrisome.

First, while many partnerships have lofty goals, it is not at all certain whether such goals will be realised. Much will depend on the balance of forces within the partnership and the type of interaction that takes place as the different actors advance their specific agendas.

Second, there is a danger that, through partnerships, private interests will come to exert excessive influence over public-interest organisations. If institutions such as governments or UN agencies are to serve the public interest, they must keep a certain distance from the private sector.

Third, there are concerns that the agendas of UN agencies are changing as they get closer to business, and that the doors to certain legitimate fields of inquiry and analysis are gradually being closed. This is apparent, for example, in relation to the issue of regulation of TNCs, where critical analysis of TNCs seems to be frowned upon in certain agencies.

Fourth, some UN agencies appear to be going into partnerships in a somewhat naive way, assuming that almost any relationship constitutes a partnership and that any company can be a worthy partner. The criteria used to select corporate partners can be very weak. Genuine partnership involves not only different actors or stakeholders coming together to pursue a common goal, but also mutual respect, transparency, balanced power relations, and the equitable distribution of benefits, responsibilities and risks.

In July 2000, the United Nations Secretary-General issued a formal set of guidelines for cooperation with the business community. They state, inter alia, that ‘business entities that are complicit in human rights abuses...are not eligible for partnership' and that ‘private enterprises should have demonstrated a commitment to meeting or exceeding the principles of the [Global] Compact by translating them into operational corporate practice'. Yet some UN institutions appear to be ignoring the letter and spirit of such clauses.

Although an agency might have a policy stating that only companies with a good environmental, social and human rights record will be considered as partners, often this record is not examined in any depth. This has led to situations in which specific partnerships incur the wrath of NGOs aware of abuses that have been committed by the companies involved. The demise of the United Nations Development Programme (UNDP)'s Global Sustainable Development Facility followed in the wake of NGO opposition to the inclusion of companies such as Rio Tinto and Dow Chemical Corporation.

Both the Global Compact, and involvement of the United Nations High Commissioner for Refugees (UNHCR) in the Business Humanitarian Forum, have come in for similar criticism, partly for the inclusion of companies such as Shell and Nike, and Nestle and Unocal, respectively. WHO's involvement in the World Alliance for Community Health, which includes mining companies like BHP, Placer Dome, Rio Tinto and WMC, may run a similar course. All of the above companies are the targets of NGO campaigns. A more serious evaluation of the track record of each particular company involved in a partnership would definitely be in order.

If UN agencies are to pursue the route of partnerships with TNCs, they face a number of hard choices. Do they choose, for example, to work with ‘the good guys', or do they collaborate with companies with tarnished reputations who now say they want to change?

UN agencies may also have to decide whether they want to be a party to corporate strategies of ‘reputation management' or an ally of the global corporate accountability movement that is demanding more fundamental improvements in corporate social and environmental performance.

The path of ‘civil regulation'—where pressures from civil society organisations serve to reform business practices - may be one of the most effective routes to promoting corporate social and environmental responsibility. Various features of the UN-business partnership approach, however, seem to be undermining the possibility of such an alliance, for they are straining relations between the UN and an important sector of the NGO community that is part of this movement. —Third World Network Features

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