U.N. Pact With Business Masks Real Dangers


By Naomi Klein

Toronto Star
March 19, 1999
Even people who don't know its name know its work. The United Nations Development Program (UNDP)is a voice for the world's poor. It offers development assistance to the most destitute, and carefully catalogues the widening disparities of the global economy. That's why when it was revealed that the UNDP had entered into an ambitious partnership with 16 multinational corporations, including the controversial Dow Chemical, the condemnation from its supporters was swift.

``The U.N. should be monitoring the human rights and environmental impacts of corporations in developing and industrialized nations, not granting special favours,'' said Ward Morehouse, president of the Council on International and Public Affairs, one of the groups that exposed the initiative last week.

It's called the Global Sustainable Development Facility (GSDF) and though it is still in the planning stages, the 16 partners have already contributed $50,000 each. Managed by Torontonian Andrei Marcu, the idea is for companies, with the help of the UNDP, to create development projects designed to help lift people out of poverty.

The initiative represents a radical shift in U.N. policy. Although its agencies accept private donations and work with many corporations, direct-project partnerships are usually made with community groups and governments, not companies. This new project, however, ``will be primarily governed by the participating corporations,'' according to an internal document.

The reason for this policy discrepancy is that GSDF is not exactly part of the UNDP, though it is administered by its staff will benefit from its know-how and network of 135 country offices. The GSDF is a sort of a privatized shell institution within the U.N.'s public structure. If that sounds overly complicated, there's a tidy reason for it. By creating a ``separate legal entity'' with its own name, the UNDP dodges the fact that the project flies in the face of several of its own key fundraising rules. For instance, UNDP guidelines prohibit donors from advertising contracts with the UNDP because ``the public may perceive the association of UNDP with such entities as endorsing them or their products or services.'' Companies also cannot use U.N. logos in any public materials and, state the guidelines, ``this policy applies equally to the name and logo of the UNDP.''

Thanks to the GSDF shell game, however, the UNDP has ensured that this policy does not apply equally to its spin-off organization. An internal document boasts that ``corporate participants will gain world-wide recognition for their co-operation with the UN/UNDP.'' It goes on to discuss ``the possibility of creating a specially designed logo for the GSDF initiative, highlighting its special relationship with the UNDP.'' Obviously, this new logo would not be subject to those nagging old restrictions.

The UNDP's own guidelines also stress that when the agency takes on a partner, ``a mutual image transfer inevitably takes place.'' With this in mind, ``the first and most critical'' criterion for corporate partnership is that the company's image be ``compatible with the UNDP image and ideals.'' The guidelines specifically state that ``the corporation's past or current operations'' must not be ``ethically, socially, or politically controversial.''

It offers as examples companies with reputations for ``exploitative involvement in developing nations,'' ``activities endangering the environment'' and ``discriminatory behaviour,'' among other misdeeds. It's clear that these tough criteria were not applied when the UNDP went looking for financing for its latest project. For instance, one of its partners is Novartis, a biotech giant which has been the subject of European protests against genetically engineered crops.

Until protests forced it to pull out in August, Ericsson cellular - another GSDF partner - was one of the most intransigent Western investors in Myanmar (formerly Burma), a pariah regime known for its violence and repression. The ABB Group, meanwhile, is one of the hydro companies behind the Three Gorges Dam in China, a project many analysts see as a recipe for environmental carnage and social upheaval.

And then there is Dow Chemical, creator of Agent Orange and one of the top polluters and pesticide producers on the planet. What sort of ``imagetransfer'' will occur when it teams up with the UNDP? Most alarming of all, records show that the UNDP approached Royal Dutch/Shell, a company which has yet to make amends for the events which led to hanging of the Ken Saro Wiwa and eight other Nigerian activists in 1995. So far, Shell hasn't joined the project, but it's clear that the UNDP fundraising guidelines weren't uppermost when the company was approached. But then, the usual criteria are out the window with the GSDF. Rather than examining a company's track record and deciding whether a partnership is appropriate, the UNDP simply offers assurances that any project that comes out of the GSDF will ``uphold universal labor, environmental and human rights standards.''

These projects could range from offering microcredit loans to bringing electricity to poor townships. Though no one could argue with the merit of such initiatives, there is no agreement about whether they will be the first step in a more socially conscious brand of investing, or whether they will be used, as critics claim, to ``greenwash'' the rest of the sponsors' operations. For instance, will ABB soft-pedal its involvement in the Three Gorges Dam by pointing to a well it dug in a nearby community, a sort of New Age ethical boutique within the cutthroat multinational marketplace? There is, of course, a long corporate tradition of this kind of window-dressing.

The question is: Should the U.N. be selling itself as an ethical management consultant in this highly compromised public relations game? The answer is that several key people at the U.N., including the Secretary-General Kofi Annan, have become convinced that goals of sustainable development and the goals of business are one and the same.

Next week: plans within the U.N. to turn human rights into a for-profit enterprise and the central role being played by Canadian diplomats.

TRAC/Corporate Watch Report
on UNDP's GSDF initiative

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