United Nations Global Compact

The United Nations Global Compact was first proposed by United Nations Secretary-General Kofi Annan in an address to The World Economic Forum on January 31, 1999.

UN Global Compact Annual Review 2008 found that more than 5,000 companies from over 130 countries had joined, since its establishment in 2000. "Nearly 1,500 new businesses joined the Global Compact in 2008, a 30 per cent increase on the previous year, 'reinforcing the notion that in times of economic downturn and crisis there is an increased search for ethics and sustainability,' Georg Kell, Executive Director of the Global Compact, told journalists at UN Headquarters in New York." Kell also claimed that "participants don’t engage [with the Global Compact] for brand differentiation or public relations purposes." However, the 2008 report found "that only 30 per cent of companies with subsidiaries required their regional branches and suppliers to implement the scheme’s principles, and only nine per cent of companies with subsidiaries even considered spreading their Compact commitments beyond headquarters."

On water issues
In July 2007, the UN Global Compact launched the CEO Water Mandate, which according to its website is "a unique public-private initiative designed to assist companies in the development, implementation and disclosure of water sustainability policies and practices." Corporate executives who endorse the CEO Water Mandate "acknowledge that in order to operate in a more sustainable manner, and contribute to the vision of the UN Global Compact and the realization of the Millennium Development Goals, they have a responsibility to make water-resources management a priority, and to work with governments, UN agencies, non-governmental organizations, and other stakeholders to address this global water challenge."

Background
"The Global Compact's operational phase was launched at UN Headquarters in New York on 26 July 2000. The Secretary-General challenged business leaders to join an international initiative - the Global Compact - that would bring companies together with UN agencies, labour and civil society to support nine principles in the areas of human rights, labour and the environment. Through the power of collective action, the Global Compact seeks to advance responsible corporate citizenship so that business can be part of the solution to the challenges of globalisation. In this way, the private sector - in partnership with other social actors - can help realize the Secretary-General's vision: a more sustainable and inclusive global economy.

"Today, hundreds of companies from all regions of the world, international labour and civil society organizations are engaged in the Global Compact. The Global Compact is a direct initiative of the Secretary-General; its staff and operations are lean and flexible.

"The Global Compact is a voluntary corporate citizenship initiative with two objectives:


 * "Making the Global Compact and its principles part of business strategy and operations
 * "Facilitating cooperation among key stakeholders and promoting partnerships in support of U.N. goals

"To achieve these objectives, the Global Compact offers facilitation and engagement through several mechanisms: Policy Dialogues, Learning, Local Structures and Projects.

"The Global Compact is not a regulatory instrument - it does not police, enforce or measure the behavior or actions of companies. Rather, the Global Compact relies on public accountability, transparency and the enlightened self-interest of companies, labour and civil society to initiate and share substantive action in pursuing the principles upon which the Global Compact is based.

"The Global Compact is a network. At its core are the Global Compact Office and four UN agencies: Office of the High Commissioner for Human Rights; United Nations Environment Programme; International Labour Organization; United Nations Development Programme. The Global Compact involves all the relevant social actors: governments, who defined the principles on which the initiative is based; companies, whose actions it seeks to influence; labour, in whose hands the concrete process of global production takes place; civil society organizations, representing the wider community of stakeholders; and The United Nations, the world's only truly global political forum, as an authoritative convener and facilitator."

Criticism
Many civil society organizations believe that without any effective monitoring and enforcement provisions, the Global Compact fails to hold corporations accountable. Moreover, these organizations argue that companies can misuse the Global Compact as a public relations instrument for "bluewash", 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.

Global Compact Critics
An informal network of organizations and people with concerns about the UN Global Compact, called Global Compact Critics, levels a variety of criticisms at the Global Compact:


 * The compact contains no mechanisms to sanction member companies for non-compliance with the Compact's principles;
 * A corporation’s continued participation is not dependent on demonstrated progress;
 * The Global Compact has admitted companies with dubious humanitarian and environmental records in contrast with the principles demanded by the Compact.

Alliance for a Corporate-Free UN
The Alliance for a Corporate-Free UN, which no longer exists, was a campaigning organization of several international NGOs, led by Corpwatch, which highlighted weaknesses in the principles underlying the Global Compact.

Criticism from within the United Nations
The Global Compact has been criticized by several senior UN officials and advisers. In December 2008, Maude Barlow, senior adviser on water issues to the President of the United Nations General Assembly, called the Global Compact "bluewashing". Other vocal critics have been David Andrews, senior adviser on Food Policy and Sustainable Development, and Peter Utting, deputy director of UNRISD.

Contact information
Website: unglobalcompact.org

Related SourceWatch articles

 * CEO Water Mandate
 * Global Compact Corporate Partners
 * Globalization
 * Corporate Social Responsibility
 * Global Water Futures
 * Greenwash
 * Samuel Jonah
 * Schiel & Denver Book Publishers
 * United Nations
 * Water Policy Institute
 * World Business Summit on Climate Change

External resources

 * Global Compact Critics
 * The Global Compact. What It Is, United Nations.
 * Global Compact Primer (PDF file)
 * Global Compact Critics blog
 * Business and human rights website
 * Debate between Georg Kell and Bart Slob (2008) UN Global Compact – Is the Compact raising corporate responsibility standards?, Ethical Corporation, May 2008.
 * UN Global Compact Annual Review 2008, released April 8, 2009.

External articles

 * Pete Engardio, "Two Views of the Global Compact," Business Week, July 20, 2004.
 * "'Kazyna' Fund Joined UN Global Compact," KazInform, September 15, 2008.