2007-07-04 - Global Compact Alternative Hearing 2007
2007-07-04 - Global Compact Alternative Hearing 2007
2007-07-04 - Global Compact Alternative Hearing 2007
Speaking Notes
of a Hearing at the United Nations, Geneva, 4 July 2007, sponsored by
CETIM, Global Policy Forum, Berne Declaration, Greenpeace
International, Misereor and Corporate Accountability International
August 2007
Whose Partnership for whose Development? 2
Contents
1 Ann Zammit 3
UN-Business Partnerships and the Global Compact
2 Vicente Paolo Yu 6
The role of TNC’s in financing for development
3 ActionAid 9
UN Global Compact fails to stop corporate human rights violations
4 Daniel Mittler 11
Voluntary action by business is welcome – but the Global Compact
is flawed
5 Melik Özden 13
Sociétés transnationales et droits humains
6 Elisabeth Strohscheidt 17
Is John Ruggie, UN Special Representative on Business and
Human Rights, showing a way forward?
7 Peter Utting 20
Closing address: Whose Partnership for Whose Development?
Corporate Accountability in the UN System beyond the Global
Compact
On July 5 and 6, 2007 UN Secretary General Ban Ki-moon chaired the second
“Global Compact Leaders Summit” at the United Nations in Geneva. It was,
according to the UN, “the largest ever gathering convened by the United Nations
on the issue of corporate citizenship”.
The Global Compact claims to bring corporations together with the UN to
promote “responsible corporate citizenship” based on ten principles. But without
any effective monitoring and enforcement provisions, the Global Compact fails to
hold corporations accountable. On the contrary, companies can misuse the
Global Compact as a public relations instrument for “bluewashing”, as an excuse
and argument to oppose any binding international regulation on corporate
accountability, and as an entry door to increase corporate influence on the policy
discourse and the development strategies of the United Nations.
On the day before the Global Compact Leaders Summit, an international group of
NGOs and researchers met at the Palais des Nations in Geneva for a Hearing, to
assess the partnership approach of the Global Compact, to present specific case
studies of corporate misbehavior, and to discuss alternative proposals and next
steps for the United Nations towards real corporate accountability.
As many colleagues were interested in the Hearing but not able to participate, we
decided to publish the (more or less unedited) speaking notes and talking points
of the panellists. We hope that this informal documentation can contribute to the
growing critical discourse on UN-business relations and legally binding
accountability mechanisms for transnational corporations.
Jens Martens, Global Policy Forum Europe
Whose Partnership for whose Development? 3
1 Ann Zammit
UN-Business partnerships and the Global Compact
I shall address just a few issues, spanning both UN-business partnerships and
the Global Compact and hope that, despite being rather schematic, my
comments help generate a fruitful discussion.
1. “Critical” comment
My first point is that there is still a need to assert that “critical comment” on the
issue of UN-Businesss partnerships for development and the activities of the
Global Compact does not necessarily reflect an anti-business stance. Business in
one form or another has existed across the globe for generations and what is at
issue is the manner of conducting business and the regulatory framework within
which it operates. Perhaps business itself needs reminding of Milton Friedman’s
affirmation that the business of business is business within the existing
regulatory framework.
I recently reread a document published in 1978 that contains excerpts from the
internal files of major Swiss businesses in connection with their efforts to
influence UN discussions on establishing a code of conduct for multinationals.1
These included explicit efforts to discredit those pressing for such a code by
branding them as politically inspired. Such an attitude is wholly dismissive of
constructive comment and of the search for approaches that hasten development
in the South and contribute to greater North-South balance in the interests of all.
(This is not, of course, intended to suggest that Swiss business operates in a
manner significantly different or worse than any other.)
Those earlier initiatives to establish a UN code of conduct for multinationals were
aborted. The soft option of self-regulation, if there was to be any regulation at
all, won the day. Despite a number of voluntary initiatives to promote corporate
social responsibility since then, it would be hard to argue that this has been an
overwhelmingly successful approach, the efforts of the Global Compact and of
UN-business partnerships included.
1
Berne Declaration. 1978. The Infiltration of the UN System by Multinational Corporations.
Excerpts from internal files. Zürich.
Whose Partnership for whose Development? 4
3. The evolution of the global production system and the Global Compact
Nowadays, many of the large corporate participants in the Global Compact are
likely to be in the higher reaches of cross-border value chains and involved in
offshoring, outsourcing and subcontracting in countries with lower production
costs and associated lower wages and inadequate health and safety and
environmental standards. (A small example indicating the global nature of
production is that of Swiss watches: the industry’s current definition of a “Swiss
made” refers only to the “movement”, that is, the mechanical heart of a watch,
ignoring other, often expensive components, such as the bracelet, dial and
casing. Even under this definition, only 50 per cent of the value of the movement
has to be made in Switzerland to gain the designation “Swiss made”.) This
“vertical disintegration of production” applies in other industries such as the
electronics and automotive industries, in which the final article is composed or
many inputs made in different countries (known as the vertical disintegration of
production.
In parallel to this development, however, there has been a significant increase in
mergers and acquisition (M&As), including cross-border border M&As. (Currently
this process is being further propelled by the surge in private equity funds.)
Large companies individually, and in some sectors in concert, exercise
considerable pressure on supplier prices, thereby limiting the capacity of
enterprises and workshops at the bottom of the value chain to make significant
improvements in labour conditions and improve other standards.
Unless progress is made toward improving labour and other standards in low-
and middle-income countries as well as in the North, the Compact’s objectives
will be thwarted. In this context, it is incumbent on the Global Compact to give
greater attention to promoting decent work in the firms and workshops providing
supplies or undertaking offshore services. The capacity of such enterprises to
make significant improvements in labour and other standards is “squeezed” by
the hard bargain driven by buyers or outsourcing firms. Many are small- and
medium-sized enterprises (small employing less than 50 workers) and medium
employing between 50 and 200. Homeworkers doing sub-contracted work have
little or no bargaining power at all. (Most SMEs are too small to participate in the
Global Compact.) Concerted Global Compact initiatives, including UNIDO and
private sector firms, could work to upgrade technology and productivity in small
firms and thereby facilitate improvement in labour and other standards.
Nevertheless, this does not resolve the inbuilt imbalance in bargaining power
between large, often monopolistic or oligopolistic, businesses in the Global
Compact, that also exert exceedingly strong (oligopolistic) buying power, and
small supplier firms in lower wage countries. New Global Compact approaches
are therefore crucial: would this include promoting fair trade arrangements to
facilitate increasing adherence to GC principles at the bottom end of the supply
chain? And how can the Global Compact help to strengthen the bargaining
power of small and medium supplier enterprises in developing countries so that
they have the resources to better implement the GC principles?
4. UN-business partnerships
In relation to UN-business partnerships, the term “partnership” is a very elastic
word and does not always imply a well-defined arrangement with strict terms of
accountability. Many of the businesses involved in UN partnerships or public-
private partnerships intended to promote development are large multinational
Whose Partnership for whose Development? 5
businesses. In this context, I wish to point to some aspects that should be taken
into account when assessing such partnerships.
In my earlier work I drew attention to general absence of careful evaluation of
UN “partnering” initiatives and emphasized the need to assess the wider
associated socio-economic and socio-political outcomes of any particular
partnership activity. At that time, the more serious evaluation efforts seemed to
have been made in the field of health. Importantly, these assessments provided
strong support for the need to assess not only results in terms of the immediate
aims of the partnership activity, but also the wider implications.
When UN-Business partnerships involve relatively powerful businesses in
activities in low-income countries, assessment of partnership outcomes should
include aspects that have important potential sectoral and possibly national
macroeconomic effects. For example, partnerships may facilitate market
penetration by large foreign firms in a manner that distorts or prevents healthy
competition. If competition is deemed to be an issue of corporate social
responsibility in Europe (see recent statements by the European Competition
Commissioner), it is no less so in developing countries. Indeed such issues
should be considered prior to establishing partnerships, owing to the significant
development implications that in fact may need policy responses by the
government of the country concerned.
To sum up, I would suggest that too little attention is paid to the wider
development implications of the Global Compact and the UN’s partnering
initiatives, as also to the implications for multilateralism. Moreover, greater
attention to the “development thinking” that has emerged from the work of other
UN bodies such as UNCTAD, DESA, ILO and UNIDO could enable public-private
initiatives proceed to better effect in developing countries.
Vicente Paolo Yu
When one speaks of the role of foreign direct investment (FDI) from
Transnational Corporations (TNCs) in financing the development of their host
economies, it can be said that TNCs can provide supplementary financial
resources, technologies, managerial skills, employment opportunities, and play a
positive role in economic and social development of host countries.
FDI global inflows have shown a 29% increase to US$916B in 2005 as compared
to 2004, although inflows to developed countries (US$542B) continue to outstrip
inflows into developing countries (US$334B). Furthermore, most global FDI to
developing countries remain concentrated in only a few countries – mostly in
East Asia (such as China, Hong Kong, Singapore, India, and some of the ASEAN
countries). In 2005, global FDI outflows in 2005 amounted to US$779B. FDI is
still currently generally undertaken by TNCs, largely coming from developed
countries.
But FDI outflows from developing countries – mostly from Hong Kong, British
Virgin Islands, Russia, Singapore, and Taiwan Province of China – is also slowly
increasing (amounting to US$133B or 17% of outward FDI – but most of that
come from offshore tax havens such as the British Virgin Islands with US$123B).
In addition, global FDI flow increases have been spurred not by greenfield
projects but by cross-border corporate mergers and acquisitions (M&As) – worth
US$716B in 2005 – and mostly in services industries such as finance,
telecommunications, and real estate. There has been sharp decline in FDI into
manufacturing, and increase of FDI into primary commodities and natural
resource sectors (such as energy, mining).
TNCs now have approximately 77,000 parent companies with around 770,000
foreign affiliates, generating in 2005 approximately US$4.5Tr in value added,
employing approximately 62 million workers, and trading goods and services
valued at more than US$4Tr. TNCs continue to come largely from the EU, Japan,
and the US. Developing country TNCs sold in 2005 approx US$1.9Tr and
employed approximately 6 million workers.
Discussing the activities of TNCs, especially in relation to trade and FDI, is
important because much of global trade is carried out through intra-firm trade
(e.g. 1/3 of goods exports from Japan and US), and increases of TNC-driven FDI
often correlate to increased intra-firm trade. Much intra-firm trade between TNC
affiliates in DdCs often have little value-added since it is probably composed of
nearly finished goods destined for marketing and distribution. Furthermore,
intra-firm trade between TNC affiliates in developed and developing countries
often involve the assembly of imported inputs for re-export to foreign markets
(e.g. maquiladoras). The increase in intra-firm TNC trade reflects a greater
degree of internationalization of production and value chains – implying greater
degree of dependence on openness of overseas markets for continued economic
growth and production. The concentration of intra-firm trade in specific products
(e.g. information and communications technology) implies that international
Whose Partnership for whose Development? 7
ActionAid International2
2
The following text was published by ActionAid as press release on 4 July 2007.
Whose Partnership for whose Development? 10
ActionAid says only a tiny proportion of the world’s 77,000 multinationals have
joined the Global Compact, pointing to the real need for universally binding
standards for all companies.
Over the last few months, Anglo Platinum, another subsidiary of Anglo American
(74%-owned) has entered into an explosive standoff with local communities at
the Bushveld mineral complex in the Limpopo region of South Africa.
“More than 17,000 people are being relocated to townships where there are no
jobs and no land - their whole way of life has been taken away from them,” said
Khan. “We are shocked by cheap offers of compensation for the loss of these
people’s pastures and livelihoods.”
The Global Compact makes no specific reference to economic social and cultural
rights. The principles also neglect the responsibilities of companies with respect
to development, gender discrimination, indigenous peoples, corporate
transparency and tax avoidance.
As part of the launch of its new HungerFREE campaign, ActionAid is calling on the
UN and member states to engage seriously to agree on global human rights
standards to hold all companies to account for violations of human rights and to
establish effective monitoring and enforcement mechanisms.
Notes:
While Anglo Gold Ashanti (AGA) acknowledges some of the issues contained in public
reports, investigations by ActionAid reveal serious discrepancies between AGA’s official
version of events and the accounts of local witnesses.
Villages, community leaders, academics and civil society campaign groups claim large-
scale surface and open-pit gold mining activities by AGA – and previously AGC – are
responsible for widespread social and environmental degradation in Obuasi, Ghana, and
demand urgent action and compensation.
Daniel Mittler
3
See: http://www.greenpeace.org/international/news/ask-and-ye-shall-receive-comp and
http://www.greenpeace.org/international/news/McVictory-200706
4
See:
http://www.un.org/jsummit/html/documents/summit_docs/131302_wssd_report_reissued.pdf
5
See:
http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2004_06_09/imp_ass.pdf
Whose Partnership for whose Development? 12
high value good, it’s reputation, by associating its name with such activities
through the Global Compact.
At the Second Leaders Summit on the Global Compact, a new climate initiative of
the Compact will be launched6. Greenpeace welcomes that this initiative seems
to support a second commitment period of the Kyoto Protocol, with drastic
binding cuts in greenhouse gas emissions in developed countries. This is the only
way to ensure a stable (and meaningful) price of carbon, as the statement
demands. However, again, this initiative is too vague and - as a voluntary
addition to the voluntary Global Compact - too weak, to be meaningful in 2007
when the need for urgent action on climate change can no longer be questioned7.
We are also deeply concerned that companies such as Areva or RWE are
signatories of this initiative. Areva is behind a new-built nuclear power plant in
Finland, which is already 1.5 years late and 400-700 million over budget. By
signing the Global Compact initiative, Areva is no doubt trying to pretend that
dangerous and expensive nuclear power, can be part of the solution to the
climate crisis. This is simply not the case8. If anything, nuclear power cements
the kind of centralized energy system, that we need to overcome in order to
deliver real emission reductions in the power sector. RWE, meanwhile, is
pursuing plans to build further coal-fired power plants, which will tie the world
into long-term carbon-dependency. RWE’s continued support for coal, including
the worst kind of coal, lignite, is incompatible with taking climate change
seriously.
The UN should not allow its name to be misused by such companies, which have
failed to catch on to the energy revolution the world needs – an energy
revolution based on energy efficiency and sustainable renewable energy
production9. Only such an energy revolution will prevent dangerous climate
change, as the UN Framework Convention on Climate Change demands. We
believe the UN Secretary General, Ban Ki-Moon, is genuine in his concern for
climate change. We therefore ask him to disassociate himself from
‘greenwashing’ attempts by the coal and nuclear industries through the Global
Compact.
6
See: http://www.globalcompact.org/docs/issues_doc/Environment/CLIMATE_STATEMENT.pdf
7
See: www.ipcc.ch
8
See: http://www.greenpeace.org/international/press/reports/the-economics-of-nuclear-power
and http://www.greenpeace.org/raw/content/international/press/reports/briefing-nuclear-not-
answer-apr07.pdf
9
Greenpeace has shown that a 50% reduction in the energy sector is possible by 2050, see:
www.energyblueprint.info
Whose Partnership for whose Development? 13
5 Melik Özden
Sociétés transnationales et droits humains
Les violations graves et massives des droits humains commises par les Sociétés
transnationales (STN) ces dernières années rivalisent avec celles causées par les
Etats et qui y sont souvent associées. Ces violations concernent entre autres:
• les dommages causés à l’environnement
• le travail des enfants
• la criminalité financière
• les conditions de travail inhumaines
• l’ignorance des droits du travail et des droits syndicaux, etc.
Cependant, il n’existe pas de mécanismes au niveau international pour prévenir
et le cas échéant sanctionner les agissements criminels des STN. Et au niveau
national, les STN sont passées maîtres pour éluder leurs responsabilités en
recourant à différentes pratiques abusives telles que le transfert d’activités
interdites ou réglementées dans un Etat vers des pays disposant d’une
réglementation moins importante et/ou en obtenant de réglementations les
moins contraignantes possible en menaçant les gouvernements et les travailleurs
de délocalisation.
Les violations des droits humains commises par les STN se faisant de plus en
plus nombreuses et étant de plus en plus graves, la communauté internationale
s'est orientée vers l'adoption de codes de conduite volontaires, donc aux
dispositions non contraignantes, tel que le Global Compact. Or, comme nous le
verrons dans cet exposé, cette solution revient clairement à faire primer le droit
des affaires sur les droits humains universellement reconnus. Le rapport de force
est certes défavorable, mais il est urgent que les mouvements sociaux,
organismes de défenses des droits humains et les citoyens exigent aujourd’hui
que les activités des STN soient encadrées juridiquement (et non
volontairement) à l'échelle internationale si l’on veut mettre fin à l’impunité dont
jouisse des STN et prévenir les violations futures.
10
Résolution intitulée «Rapport entre la jouissance des droits économiques, sociaux et culturels et
du droit au développement et les méthodes de travail et activités des sociétés transnationales»
(E/CN.4/Sub.2/RES/1998/8).
11
E/CN.4/Sub.2/2003/12/Rev.2, adopté le 13 août 2003 par la résolution de la Sous-Commission
de la promotion et de la protection des droits de l’homme de l’ONU, E/CN.4/Sub.2/RES/2003/16.
Whose Partnership for whose Development? 15
Conclusion
A titre de conclusion, je dirai deux choses:
1) si le statu quo est maintenu, cela équivaudra au maintien de la juridiction de
la Banque mondiale (Centre international pour le règlement des différends
relatifs aux investissements, CIRDI) et de l'Organisation mondiale du commerce
(Organe de règlement des différends, ORD) sur les agissements des STN. Or
pour ces organismes, les intérêts privés priment sur les droits humains qui ne
sont d'ailleurs pas pris en considération;
2) Malgré les pressions fortes du milieu patronal et le manque de volonté
politique des Etats pour un encadrement juridique contraignant au niveau
international, il ne faut pas baisser les bras. Il faut poursuivre le travail et la
mobilisation, car il s’agit du respect des droits humains et de la défense des
principes démocratiques.
Elisabeth Strohscheidt
12
A/HRC/4/35, 19 February 2007, p. 5 (paragraph 3)
Whose Partnership for whose Development? 19
Peter Utting
This hearing is concerned with how the United Nations system might promote
corporate accountability, and how current approaches, centred on the Global
Compact, public-private partnerships and corporate social responsibility (CSR),
cannot meet this challenge. How then do we move “beyond the Global Compact”,
as suggested in the title of this hearing?
The panelists have each focused on different aspects of corporate practice, public
policy and governance arrangements that need to be reformed or transformed.
And they have identified some current reform initiatives where civil society
advocacy might yield results. In these brief closing remarks, I would like to
highlight a number of institutional developments and forms of regulatory politics
that are essential in strategies to promote corporate accountability, but which
are somewhat different to those associated with CSR.
Before doing so, however, we should remind ourselves what corporate
accountability means. Like CSR, there are various definitions. But for the
“movement” of activists and academics concerned with taming corporate
capitalism it seems to suggest four things:
First, that we can’t rely on companies to put their own house in order through
self-regulation and voluntary initiatives, or a combination of CSR and minimalist
regulation. As evidenced by recent cases of companies such as BP, Siemens and
KPMG that had a high profile in CSR circles, companies and managers are simply
under too much pressure to cut costs; compete and maximize profits in ways
that inevitably generate perverse social, labour, environmental, governance and
fiscal effects; as well as to seek out new frontiers where regulations and rights
can be ignored.
Second, in view of this situation, companies must be held to account. This
implies not just responsibility but some sort of obligation to answer to others
through, for example, mandatory reporting and disclosure, as well as more
effective independent monitoring and auditing.
Third, companies that fail to comply with agreed standards must incur some sort
of penalty or cost. This contrasts sharply with CSR practice where such costs are
often limited to the reputational arena, or where there is impunity. This implies
not only that new regulations and laws may be needed but that regulatory and
legal institutions must have the capacity to implement existing standards and
prosecute malpractice.
Fourth, victims of corporate wrong-doing must be able to channel grievances,
settle disputes and seek redress.
The corporate accountability agenda that has developed since the World Summit
on Sustainable Development in 2002 is, then, quite different to the CSR agenda
that took-off internationally around the time of the Earth Summit ten years
earlier.
Whose Partnership for whose Development? 21
Let’s turn now to what needs to be done to overcome the limitations of the
approach that is symbolized by the Global Compact. I say “symbolized” because
any criticism people might have of the Global Compact is really a criticism of
CSR, i.e. that:
• it provides ample space for companies to engage in window-dressing and
cherry pick among standards;
• it is characterized by weak implementation of agreed standards
throughout corporate structures and supply chains;
• reporting standards and procedures are weak;
• there are no significant penalties for non-compliance;
• global corporations gain undue influence in the public policy arena and
unfair competitive advantages through their association with the United
Nations and public-private partnerships; and
• key issues that explain why corporate capitalism and its institutions fuel
underdevelopment or unsustainable development are often ignored.
There are also concerns that CSR in general, and the Global Compact in
particular, are a means of diverting attention from harder regulatory alternatives.
It should be noted that the Global Compact explicitly states that it is not
intended to displace other regulatory approaches. But in some sense, the Global
Compact has become “the only game in town”, given its considerable success in
expanding the number of participating companies, spreading the word about CSR
and partnerships throughout the world, and in demonstrating a remarkable
capacity to convene corporate, political and civil society leaders.
To go beyond this approach, various paths need to be pursued simultaneously.
The first involves the “hardening” or “ratcheting-up” of voluntary initiatives. To
some extent this is already happening, largely in response to criticism and civil
society pressures. CSR standard-setting, reporting and monitoring institutions
have evolved and matured through time, and complaints procedures are
gradually being developed. Even the Global Compact, which has often claimed to
be nothing more than a forum for learning and dialogue, has been nudged in this
direction. Companies must now report on progress; they are rendered “inactive”
if they fail to report; a mild complaints procedure was introduced last year, and
most recently, an external review procedure has been established for the
“Communications on Progress” that companies must submit. These mechanisms
need to be tried and tested to prove their worth, but at least on paper, such
reforms suggest a slight shift in the pendulum away from self-regulation toward
corporate accountability.
The second path involves expanding the body of national, regional and
international norms and law related to corporations. International law is now
going beyond a focus on state actors and, as the lawyers say, is “fixing”
increasingly on corporations. There has been a proliferation of so-called
international “soft” law, involving declarations, resolutions, guidelines, and codes
related to corporate activities. At the national level we see, in some countries,
laws mandating various forms of reporting and disclosure. But while the body of
standards and laws has expanded, there are still major weaknesses in regulatory
capacity of both states and civil society organizations, including trade unions. It
is perhaps this feature of the neoliberal paradigm, namely the weakening of state
Whose Partnership for whose Development? 22
regulatory capacity and basic labour rights, that requires the most urgent
attention.
The third involves enhancing the ability of victims of corporate wrong-doing to
use the existing regulatory or legal infrastructure to settle disputes and seek
redress. This is occurring in countries such as the United States and the United
Kingdom where cases have been brought against companies for wrongs
committed abroad, or in India through Public Interest Litigation. The Aarhus
Convention allows NGOs in countries that host TNCs to obtain information about
their environmental performance.
The fourth path, involves connecting the issue of corporate performance with
economic policy. The signals and incentives that companies are receiving from
governments often encourage them to externalize costs; transfer risk to
employees and suppliers; avoid taxes through regulatory loopholes, transfer
pricing and off-shoring; and seek out new frontiers around the world or along
supply chains where regulatory institutions and labour rights are weakest.
A fifth path involves forms of activism that vary to some extent from those that
characterize CSR, where considerable attention has been focused on
strengthening NGO-business relations or partnerships, and “stakeholder
dialogues”. The difference relates not only to the types of issues and demands,
but also to patterns of social mobilization. Modes of organizing and mobilizing
associated with “transnational” or “multi-scalar” activism, which involve linking
organizations and networks at local, national, regional and international levels,
are particularly important, and have played a key role in efforts to prosecute
corporate wrong-doing, as well as in campaigns where activists “name and
shame” companies. Multi-scalar approaches are also a prominent feature of the
strategies of Global Union Federations, several of which have signed Framework
Agreements with TNCs, that extend union/company relations beyond the local
and national levels to the global level. Civil society organizations, operating at
different levels, must also focus on reconnecting with local and national
governments, to develop complementarities and synergies in regulatory capacity.
Last but not least, the process of change requires keeping the institutional and
policy agenda alive with ideas for reform or more fundamental restructuring of
development models. In this respect, it is important that civil society
organizations engage actively with the UN business and human rights agenda
that involves the work of the Secretary-General’s Special Representative on
Business and Human Rights, and the Norms on the Responsibilities of TNCs and
Other Business Enterprises with regard to Human Rights. Whilst declared a
“distraction” by the Special Representative, the standards and mechanisms
proposed in the Norms – i.e. monitoring, reporting and redress – have
considerable backing within civil society, and some aspects of the Norms are
even being tested by a group of global companies.
Other ideas should also be kept alive, such as that of expanding the remit of the
International Criminal Court to address corporate crimes; setting up new UN
activities including information systems on corporate accountability initiatives
and laws, as well as on business practices associated with maldevelopment; new
institutions such as a Special Rapporteur on TNCs, or a Corporate Accountability
Organization; the (re)chartering and down-sizing of corporations; a set of Civil
Society Rules for TNCs; or even revisiting the principle of limited liability.
In this hearing we are supposed to be focusing on the role of the UN in the field
of corporate accountability. But we also need to consider whether civil society is
Whose Partnership for whose Development? 23
up to the challenge. Is there the capacity among NGOs and trade unions to
operationalize or activate complaints procedures, such as those that exist at least
on paper in the OECD Guidelines on Multinational Corporations? Will NGOs test
the new Global Compact complaints procedure? Serious doubts indeed exist
about their capacity to do so, but perhaps more significant is a bigger question:
Can civil society organizations, and NGOs in particular, forge the types of
alliances necessary to really exert pressure for change? Despite advances in
networking and transnational activism, civil society is often fragmented, with too
many internal divisions – between large and small, between North and South,
between NGOs and trade unions. In contrast to the labour movement, NGOs and
their networks are often distanced from parliamentarians, political parties and
mainstream democratic politics. Civil society, then, as much as the UN and
national governments, also needs to face up to key challenges if progress on the
corporate accountability front is to be made.
Regarding the United Nations, from my perspective as a social science
researcher, a central issue relates to the need for the UN to recoup its capacity
for so-called “critical thinking”. This involves questioning dominant policy
approaches and patterns of development, exposing power relations and injustice,
identifying the winners and losers of development policies and processes, and
proposing alternatives.
A large project on the history of ideas in the United Nations, the UN Intellectual
History Project, has recently documented numerous instances where individuals
and agencies associated with the UN have exercised bold intellectual leadership,
questioned conventional wisdom, and promoted ideas and policies associated
with alternative visions of development and harder regulation of powerful
interests. Notable examples include UNCTAD’s questioning of North-South
relations in the 1960s, the ILO’s focus on “basic needs” in the 1970s; UNICEF’s
critique of structural adjustment in the 1980s; the rights-based perspectives of
the Human Development Report, or of the High Commissioner for Human Rights’
in the late 1990s; and more recently, the World Health Organization taking on
the tobacco companies.
The Global Compact and much of the UN today, largely ignores critical thinking.
Instead there is a tendency to focus narrowly on learning about best practices.
i.e. trying to identify the positive things that big business does, and
disseminating this information in the hope that such practices will be replicated
elsewhere. This, of course, is an essential activity for international development
organizations, but it should not be at the cost of other types of analysis and
learning, which are needed to understand the other half of the story – if not the
main story – that we have heard about during this hearing. There is a danger,
then, that best practice learning is marginalizing, if not stifling, critical thinking.
The Global Compact states it is a learning forum and international development
agencies increasingly refer to themselves as “knowledge agencies”. If they are
really to fulfil this role, then the nature of learning, and the choice of academic
disciplines, institutions and experts engaged in learning networks, need to
change.
Peter Utting is Deputy Director of the United Nations Research Institute for Social
Development (UNRISD)