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 it also does not cover the reporting of violations to the principles.

Corporate Partners

The membership of the Global Compact Corporate Partners includes the Shell Oil Company, BP PLC, Nike Inc., Tio Tinto PLC, Novartis, Aracruz Cellulose, Aventis, Bayer, BASF, DuPont, and DaimlerChrysler, identified among some of the companies with "the most egregious human rights and environmental records."[1]fg

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.