UN Global Compact

Background

The United Nations Global Compact initiative was started by the then UN Secretary General Mr. Kofi Anan in the year 2000.

According to its website, the UN Global Compact 'is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere'.

The Global Compact describes itself as 'the largest corporate citizenship and sustainability initiative in the world', which in 2009 has over 5100 corporate participants and stakeholders from over 130 countries.

It has two stated objectives, which are:

• Mainstream the ten principles in business activities around the world
• Catalyze actions in support of broader UN goals, including the Millennium Development Goals (MDGs)

The Compact brings companies together with governments, civil society, labour, the United Nations and other key interests. It agreements are not binding as this is a voluntary initiative which relies on a policy of transparency and accountability, known as the Communication on Progress (COP) as its means of monitoring. Companies are required to report annually as a demonstation to their commitment to the Global Compact and its principles. As the UN Global Compact states, 'a commitment to transparency and disclosure is critical to the success of the initiative'. They go on to add that failure to communicate 'will result in a change in participant status and possible delisting'.

The Ten Principles of the Global Compact

In 2009, The UN Global Compact declares its ten principles to be:

• Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

• Labour Standards

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

• Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

• Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Accountability

As the Global Compact is a voluntary initiative, a company has no accountability to meet the stated principles. Instead it must simply declare a commitment to the principles in the form of a yearly report. This is the Compacts policy of Communicating on Progress, which has only 4 requirements: that it is submitted annually, contains a declared commitment to the principles, it describes some of the actions taken to work towards the principles and includes a measurement of outcomes that are either real of 'expected'.

It is up to the company itself to report to the Compact, there is no mention of any external or independent monitoring to validate the reports and the Compact's policy also does not cover the reporting of violations to the principles.

As the Guardian reports, 'From the start, the global compact has been dogged by accusations that it lacks transparency, has no accountability mechanisms and invites companies to trade off the prestige of the UN'

Corporate Watch quotes Deborah Doane, of the Corporate Responsibiility (CORE) Coalition (from her argument in 'Red Tape to Road Signs') as saying 'by promoting these instruments as substitutes for international governance institutions, the UN and OECD effectively undermine the ability of national governments to put forward a different approach'.

In 2000, Monbiot reported how the Global Compact had been established 'with 50 of the world's biggest and most controversial corporations'. He went on to report that:

'The companies promised to respect their workers and the environment. This, Annan told them, would "safeguard open markets while at the same time creating a human face for the global economy". The firms which signed his compact would be better placed to deal with "pressure from single-issue groups". Again, they would be allowed to use the UN's logo. But there would be no binding commitments, and no external assessment of how well they were doing'.

Refering to the UN's previous announcement in 1997 (and their subsequent actions in this respect) that corporations would be given a formal role in UN decision-making when Kofi Annan, the UN secretary general, suggested that he would like to see more opportunities for companies - rather than governments or the UN - to set global standards. Monbiot added:

'The UN, in other words, appears to be turning itself into an enforcement agency for the global economy, helping western companies to penetrate new markets while avoiding the regulations which would be the only effective means of holding them to account. By making peace with power, the UN is declaring war upon the powerless'.

Declarations on ethics such as Human rights are now the norm, but as the Guardian has highlighted, the international business community has mounted a concerted campaign against these norms, arguing that corporations should not face binding human rights obligations. Instead, business has demanded weak voluntary principles such as the much-derided Global Compact. The report continues by adding:

'It will come as no surprise to discover that the British government has consistently sided with business against the human rights community. The government's official submission on the UN norms argued that corporations should not face legally binding responsibilities for their actions under human rights law. This week in Geneva, the British representative echoed the corporate line yet again by holding up the Global Compact as an example of a bridge between different sectors and standards... The last time the UN drew up a binding code of conduct for multinational companies, the British government joined forces with Germany, the US and other rich nations to ensure such rules never saw the light of day. The final draft of the code was suppressed in 1990, and the UN bodies responsible for it were closed down'.

People

Board Members

The Board is chaired by the United Nations Secretary-General and in 2009, Global Compact Board Members are listed as

Business

Toshio Arima - Director and Executive Advisor to the Board, Fuji Xerox, Japan | José Sergio Gabrielli de Azevedo - President and CEO, Petrobras, Brazil | Guillermo Carey - Senior Partner, Carey & Allende Abogados, Chile | Charles O. Holliday - Chairman of the Board, DuPont, US | Cecilie Ibru - CEO & Managing Director, Oceanic Bank International, Nigeria | Jamshed Irani - Director of the Board, Tata Steel, India | Anne Lauvergon - Chair of the Executive Board, Areva, France | Juan De La Mota - President, Global Compact Spanish Network | Ntombifuthi Mtoba - Chair of the Board, Deloitte, South Africa | Mads Oevlisen - Chair, Lego, Denmark | Fernando Chico Pardo - Founder and President of Promecap S.C., Mexico | Chey Tae-won - President & Chairman, SK Group, Republic of Korea | Chen Ying - Deputy Director General, China Enterprise Confederation, China

International Labour and Business Organizations

Antonio Peñalosa - Secretary-General, International Organization of Employers | Guy Ryder - General Secretary, International Trade Union Confederation | Guy Sebban - Secretary-General, International Chamber of Commerce | Manfred Warda - General Secretary, International Federation of Chemical, Energy, Mine and General Workers’ Unions

Civil Society

Habiba Al Marashi - Chair, Emirates Environmental Group | Oded Grajew - Chair of the Board, Instituto Ethos de Empresas e Responsabilidade Social | Huguette Labelle - Chair, Transparency International | Mary Robinson - Chair, Realizing Rights: The Ethical Globalization Initiative

Ex-Officio

Georg Kell - Executive Director, UN Global Compact Office | Mark Moody-Stuart - Chairman, Foundation for the Global Compact

Corporate Partners

Below are listed some of the companies and business associations signed up to the Global Compact. This provides just a very small sample as the full list reaches to over 5100 corporate participants which would be impossible to include as a list on this page. The list of participants of the Global Compact can be accessed through the Compacts website using their Participant search function.

Companies

In 2009, some of the world's most controversial companies were listed as being signed up to the UN Global Compact. These include:

Shell | Rio Tinto | BP | Nike | DuPont | Gap | Coca Cola | General Electric | Levis Strauss (who have already been dropped form the Ethical Trading Initiative for failure to commit to labour standards) | Dow Chemical and Nestle to name just a few.

Business Associations

Business Associations are also included in the Global Compact. In 2009, global business associations were listed as:

World Savings Banks Institute - Belgium | World Confederation of Businesses - United States of America | World Business Council for Sustainable Development - Switzerland | Wafa Investing LLC - Syrian Arab Republic | The Conference Board - United States of America | The Associated Chambers of Commerce and Industry of India - India | Norwegian Shipowners' Association - Norway | International Post Corporation - Belgium | International Petroleum Industry Environmental Conservation Association(IPIECA) - United Kingdom | International Organization of Employers - Switzerland | International Council of Chemical Associations - United States of America | International Chamber of Commerce (ICC) - France | Instituto Ethos de Empresas e Responsibilidade Social - Brazil | Indonesian Suiseki Association - Indonesia | Hippocrates Research Srl - Italy | Global Business Coalition on HIV/AIDS - United States of America | Foreign Investment Promotion Organisation - India | European Savings Banks Group - Belgium | Dison Investment & Services Co. Ltd - Sudan | CSR Europe - Belgium | Caux Round Table - United States of America | Byblos Bank Syria - Syrian Arab Republic | Business for Social Responsibility - United States of America | Bellagio Forum for Sustainable development - Germany | American International General Chamber of Commerce - United States of America | ADSG Atrugal - Spain

External Links

• Global Compact Primer.
• DaimlerChrysler and The Global Compact, DaimlerChrysler.
• Kenny Bruno, Perilous Partnerships. The UN's Corporate Outreach Program , Multinational Monitor, March 2000.
• Coalition Says Global Compact Threatens UN Mission And Integrity. Corporate Partners Scrutinized, Common Dreams, July 25, 2000.
• NGO Letter to UN Secretary General on Global Compact re Nike Inc.,Third World Network, July 28, 2000.
• Ellen Paine, The Road to the Global Compact: Corporate Power And The Battle Over Global Public Policy at The United Nations, Global Policy, October 2000. Particularly focuses on think tank opposition to Globalization, i.e. Heritage Foundation and Cato Institute.
• Global Compact with Corporations: "Civil Society" Responds, Women's International Leage for Peace and Freedom, February 15, 2001.
• "Globalization": the UN’s "Safe Haven" for the World’s Marginalized, Laetus in Praesens, March 6, 2001.
• Nityanand Jayaraman, Norsk Hydro: Global Compact Violator, CorpWatchIndia, October 18, 2001.