TRANSCRIPT OF PRESS CONFERENCE BY SECRETARY-GENERAL KOFI ANNAN AND LEADERSHIP OF INTERNATIONAL CHAMBER OF COMMERCE AT GENEVA ON 5 JULY

Press Release
SG/SM/7062

TRANSCRIPT OF PRESS CONFERENCE BY SECRETARY-GENERAL KOFI ANNAN AND LEADERSHIP OF INTERNATIONAL CHAMBER OF COMMERCE AT GENEVA ON 5 JULY

FRED ECKHARD, SPOKESMAN FOR THE SECRETARY-GENERAL: We have just had a very interesting meeting that the Secretary-General convened with the leadership of the International Chamber of Commerce and heads of United Nations agencies involved in the implementation of the Global Compact that he launched in Davos in January of this year. The Secretary-General will make an opening statement then Adnan Kassar, the President of the International Chamber of Commerce (ICC) just to my right will make comments. The Secretary- General will then have to leave and the remainder of the party here will be available to you to answer questions.

The SECRETARY-GENERAL: Welcome and good afternoon to you all. As you heard from Fred, we have had a very productive meeting. It is my pleasure to share with you the good news that emerged from it. First, I am very pleased that the business community has taken up the challenge of the Global Compact that I proposed in Davos earlier this year. And, second, we have made good progress in improving investment prospects for Africa and the least developed countries.

Regarding the Global Compact, the business community increasingly sees the United Nations as a way to ensure the benefits of globalization are spread more and more widely.

Business is calling for a stronger United Nations, especially in the areas of human rights, labour and the environment, because this is seen as the most sensible way forward to safeguard open markets while, at the same time, creating a human face for the global economy.

Business leaders are also ready to work with us in concrete ways to promote best practices. Now the challenge is to involve other actors, such as the International Confederation of Free Trade Unions and non-governmental organizations (NGOs), to make this a successful partnership for everybody. I believe we can all be on the same side on these issues. Regarding investment in least developed and African countries, it is my hope that pilot studies undertaken jointly by the United Nations Conference on Trade and Development (UNCTAD) and the ICC will help stimulate badly needed investment and put African countries back on the investment-location map.

We need to bring about a major shift in perception. Good political performance does and should pay off and those countries that are making serious efforts should not be discounted simply because of overall negative perceptions about the African continent.

I will leave now the floor to my colleagues and business leaders but first let me call on Mr. Kassar.

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ADNAN KASSAR, PRESIDENT OF THE INTERNATIONAL CHAMBER OF COMMERCE: It is a pleasure to be with you this afternoon. The ICC business delegation appreciates the exceptional leadership, determination and vision that Secretary-General Kofi Annan has shown over the past few years in establishing the fruitful new relationship that now exists between business and the United Nations. Today, on behalf of the private sector, we welcome his call for business to join with the United Nations in a Global Compact to promote shared values in the area of human rights, labour standards and environmental protection. Business takes up the challenge. Business, by creating wealth, makes a powerful contribution to further humanitarian values. That contribution, through the market economy system, is immensely strengthened if accompanied by good governance, labour -- neither business nor Government can do it alone.

For the Global Compact to succeed all of us -- Governments, the United Nations system and business -- must be realistic in our expectations. Companies cannot be expected to take on responsibilities beyond their own sphere of activity that are the proper preserve of Governments.

Here are a few of the main points agreed at our meeting today. Companies can most effectively contribute to the Global Compact by the way they conduct their own business and by the spread of corporative standards of excellence. Also, by creating wealth and jobs, companies help to defeat poverty -- the enemy of the humanitarian values that the United Nations shares with business. To contribute to the Global Compact, a company must discharge its responsibility to its own customers, employees and shareholders. And globalization is a powerful force for spreading good business practices and for global markets to provide maximum economic benefit to all. They need an effective framework of good multilateral rules.

The United Nations and its agencies are the proper place for addressing environmental, human rights and labour issues. They require enhanced authority and resources to do this job effectively. We were glad to note good progress in our joint initiatives with UNCTAD to provide expertise and support to Governments of the least developed countries in their efforts to attract foreign direct investment. This is a first-class practical example of the United Nations business partnership at work.

The SECRETARY-GENERAL: Thank you very much, Mr. Kassar. The floor is now open to questions.

FRED ECKHARD: Before the Secretary-General leaves, if we could just ask you to stand, for a photo opportunity.

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THERESE GASTAUT, DIRECTOR OF THE UNITED NATIONS INFORMATION SERVICE AT GENEVA: We will open the floor to the questions and please, when you take the floor your question, indicate your media organization and to whom you address your question.

QUESTION: I am asking Rubens Ricupero, Secretary-General of UNCTAD. The economic and social mission of the United Nations is often portrayed in glowing gold, such as: the creation of prosperity and wealth; development and peace are the essential elements of a decent life; or a vibrant market is a condition for creating job opportunity and improving the living standards; or an equitable inclusive economic system based on the free flow of trade. The United Nations has high ambitions: health for all, life for all, rights for all, food for all, development and prosperity for all. As an observer of the United Nations in Geneva, when I hear such words, I wonder.

Mme GASTAUT: Sorry, we have not much time and the press conference will last about 30 minutes. What is your question?

QUESTION: I am arriving to my question. Maybe a new God has descended to earth, calling upon me and all of us to bow before this new religion, right under its banner, in collective action, for the cause of development, human rights and democracy. Mr. Ricupero, do you agree that too often the United Nations presents its mission as noble and untouchable, showing little modesty considering the contrast between its goals and slogans? And ... I didn't finish ... impact on the global realities of poverty, child labour, malaria and AIDS, not to mention wars, genocide and mass refugee movements? Has the United Nations sold its soul to the new God of globalization which is crowned, not with laurels and thrones, but rather a baseball cap? This is my question and I want to finish my question.

Mme. GASTAUT: Well, Mr. Ricupero, please, it is a long question and I hope I will have a very short answer.

Mr. RICUPERO: I am not sure I well understood the question but I have the impression that there was some questioning of providing advice to countries for getting foreign direct investment. If that was the case, I must say that all countries in the world, with no exception that I know of, are trying to attract foreign direct investment, which is an important condition for development. And, of course, it is up to the Governments and to the citizens of any country to try to steer these investments for their best priorities. But, I think, in working to foster this kind of investment we are helping countries -- as in the case today of Ethiopia, Mali and the others to get the necessary investment for their development.

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QUESTION: The United Nations has been involved in trying to bring prosperity to Africa for many years. What's different about this initiative? How much money is going to be put into this initiative by the United Nations and also by the International Chamber of Commerce?

Mme GASTAUT: Thank you. The President of ICC, please?

Mr. KASSAR: I think the cooperation between the ICC and the United Nations is going further and deeper than coming and putting just funds in order to help some countries. We already have started our programme of trying to create the investment code for the least developed countries and we have started already with Ethiopia. So these are, I think, actions which would encourage the investor to come and to invest and thus, with the investments coming to these countries, the economy will improve and then the standard of living too.

QUESTION: A question to the United Nations. What has the United Nations spent to launch this new initiative to attract foreign investment to Africa?

Mr. RICUPERO: In the case of the investment guides, we have been financed by a few countries that made a donation. Let me read aloud to you the list; those are interesting enough: the first one is China; Finland; France; Japan; and Norway. As you see, there is a wide variety of countries in terms of different orientation and then with some money from the UNCTAD Trust Fund for the least developed countries. We don't have much money in reality. Until now we have spent only a few hundreds of thousands of dollars with the investment guides for several countries and we are even soliciting contributions.

I take this opportunity to encourage other countries to contribute to us, because we have a long list of more than 40 countries that are asking for this advice. And right now what we have is very little money to spend, and I would like only to make a point for those who have doubts about the usefulness of this. Let me tell you that one of the reasons why we went into this field was the fact that the major private companies, like Coopers and Lybrand who generally prepare guides for investment, they are not interested in the least developed countries because those are the poorest among the poor so it is not a good business proposition. So it is the duty of the United Nations to do exactly what others, who are primarily moved by profit, are not doing. That is one additional reason to ask for funds from countries. If you want to contribute we will be very grateful.

JOHN RUGGIE, SPECIAL ADVISER TO THE SECRETARY-GENERAL: I just want to clarify that the purpose of this objective is not to organize an aid programme for Africa as such, but to produce investment guides for the least developed countries around the world and especially in Africa so as to interest the

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private sector in investment opportunities in those countries. As you know, the percentage of foreign direct investment that goes to these countries in Africa, in particular sub-Saharan Africa, is minuscule. As Mr. Ricupero indicated, the funding is to join with the ICC and their expertise for the purpose of interesting the private sector in investment opportunities that they would otherwise overlook.

QUESTION: A journalist said that last September, the previous President of the International Chamber of Commerce had flatly and openly rejected the idea that the ICC would abide by the code of conduct or the code of ethics in dealing with the United Nations. Do you still maintain this position yourself or did you change your mind in between?

Mr. KASSAR: This matter was discussed today and we are for a continuous dialogue about this matter. We of course abide by rules but we also have a special position. So we can say that today it was decided that we will continue to discuss this together in order to come to an agreement. I do not know if Maria would like to add something.

MARIA LIVANOS CATTAUI, SECRETARY-GENERAL OF THE ICC: This is the first knowledge that I have that there is a code of ethics in dealing with the United Nations. As far as I know, and as far as all of us are concerned, there are so many codes of conduct of all kinds out there. We discussed the issue exactly as President Kassar said today. Business itself was one of the foremost leaders in preparing codes of conduct, codes of ethics and so on and not only abiding by them but continuously revising them and moving forward. I am unaware of any detailed code of conduct that regulates the way people interact with the entire United Nations system. I am sorry about my lack of knowledge on this but I was not aware that there was a single set of principles that determined the way Governments, businesses, NGOs and others are required to interact with the United Nations. Is there such a thing?

QUESTION: A question for Mr. Moody-Stuart of Shell, if I may. Just to test this joint statement. Bearing in mind Shell's past activities in Nigeria, would you be prepared to acknowledge that they may not have been in keeping with the human rights and the environmental standards mentioned in this joint statement and would you be prepared to make a pledge to the United Nations for the future on your activities in Africa?

MARK MOODY-STUART, CHAIRMAN AND MANAGING DIRECTOR OF ROYAL DUTCH/SHELL: We have for many years in Shell had a code of conduct, which we have done our best to abide by. We may not in every instance in every country have abided ourselves by every element of those codes. What we do now is to be sure that we have a system which checks internally, and is verified externally, our compliance with our own publicly disclosed and discussed codes of conduct. That, I think, is what this process is about. People make commitments and then they have to abide by those commitments in public and be held accountable

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by their shareholders, by their customers and by the world community at large as to the degree and extent to which they abide by those codes and the quality of the codes.

QUESTION: Dans un communiqué qui nous a été distribué, on parle des deux rôles que jouent le secteur privé d'une part et l'ONU de l'autre, création de richesses et de prospérité pour le secteur privé, paix et développement pour l'ONU. C'est un peu comme le mariage de l'eau et du feu, à mon avis, parce que je ne vois pas tellement comment on peut..., puisque c'est quand même le pacte qui a été proposé par le Secrétaire général, le pacte mondial entre l'ONU et le secteur privé, qui vise, dit-on', au respect des droits de l'homme, à améliorer les conditions de travail et à protéger l'environnement. Alors, je veux bien y croire mais pourriez-vous nous donner quelques exemples concrets?

JUAN SOMAVIA, DIRECTOR-GENERAL OF THE INTERNATIONAL LABOUR OFFICE: Yes, I think that what we are getting going here is a process. A process by which beyond some of the United Nations institutions like ILO who have been involved in dealing with business for 80 years now, the Secretary-General has decided to incorporate the whole of the United Nations system to the need for dialogue with business and has set these three objectives. It is very clear what the three mean. Their labour standards meets the declaration and we have heard businesses say that they have the intention of complying with the declaration in their own practices, in terms of private initiatives. Some exchanges took place in relation to the environment. A number of initiatives are on the way and some discussions took place there and the same thing in terms of human rights.

I make the point that this is a point of departure. The causes that we are talking about are really clear, and we will see as the initiative evolves in relation to the different partnerships that will develop within the United Nations system, how we make this more and more specific. But seen from an institution in which business is part of the company, I am saying now that we are in the presence of private sectors. I believe that a greater engagement of the United Nations system as a whole is good for the United Nations and it is also good for business. One thing that I think is clear is that good values in the end are good business, and this is about how we see and how we develop that really basic notion that good values are good for business and business is necessary for creation of employment through investment in other fields in order to be able to bring development solutions to many countries. We just want to make sure that it is done in a way that responds to what the United Nations represents, which is basically a value institution.

Mr. KASSAR: Yes I would I like to clarify one point which is the prevailing idea about ICC that it is composed only of the very important multinationals and that we, in the ICC, are just taking care of these multinationals. This is not true. The ICC is representing business and in

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business, there are plenty of middle and small-sized enterprises. We are represented in 137 countries and most of these countries are developing countries. For instance, I come from a very small country, from Lebanon, and I have been elected as President of the ICC. This shows that we are concerned with the business in general, and the marriage with the United Nations according to us, coming from a small country, will yield good benefits.

QUESTION: I would like to ask Mr. Moody-Stuart and also ICC, as representatives of the private sector, what role do you see for agencies like UNCTAD in your business environment and could you give us some examples how important are they and what changes would you like to see for them to become more current. I mean the report here on Africa, the latest statistics are from 1997 but we are coming up to the year 2000 now so perhaps you could give some feedback.

RICHARD McCORMICK, VICE-PRESIDENT OF THE INTERNATIONAL CHAMBER OF COMMERCE: I think the question relates to how important is UNCTAD in terms of business considering where it wants to do business. I don't think any large business will depend on that particular organization in terms of helping it sort out its markets. Most of these large businesses have their own intelligence. But most important it seems for me is that a system of rules exists in countries, whether developed or underdeveloped or developing, and to the degree that UNCTAD can help establish and encourage a system of rules or a system of contracts in doing business, I think that helps the business climate in general and for that we are very supportive of its work. I think, in particular, the work that is being done in the six countries that are chosen is an early pilot project, if you will, in terms of how can we work together and bring economic development and better business to those six countries. My view is that if that's successful, we can go beyond that.

QUESTION: I have a question for Mrs. Robinson and Mr. Toepfer. I would like you to elaborate a bit more concretely on the human rights perspective and the environmental perspective in this partnership.

MARY ROBINSON, UNITED NATIONS HIGH COMMISSIONER FOR HUMAN RIGHTS: I welcomed this meeting because it was the best opportunity for the Office of the High Commissioner to be in a direct relationship with the ICC, unlike other components of the United Nations Organization. In fact, a paper was prepared for the meeting which showed the considerable contacts that the ICC has had with other agencies or programmes. And the fact that we are now in discussion illustrates that this is, for both sides, a new process, as Juan Somavia has called it and I agree with him. It is an important process and it will not be an easy one and there will not be a comfortable relationship on both sides because there are inherent tensions, inherent questions.

Some of them came up this afternoon. A number of contributors spoke about the number of codes of conduct that now exist -- that is not the issue.

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The issue is whether they are implemented on the ground at country level with the work force and with indigenous peoples and where it can really matter, and how do we make progress on implementation. But the discussion on this is not confrontational. We are both on the same side of the issue and I think that's where the difference is. I welcome the opportunity to sit down with business and discuss, in detail, how they will implement their commitment to human rights and also in close discussion with trade unions, with non-governmental organizations. And part of what is happening is to make the way in which companies are doing business more transparent, to have more overt commitments through codes of conduct and through social auditing and then to pin corporations to those responsibilities. That would make an immense difference in the area of human rights. And many of the comments made this afternoon were going further.

There is another dimension of corporate responsibility. There is a possibility of being innovative, of bringing new technologies and developing new technologies which will make a difference. And the Africa project is a good example where the United Nations and business can work, I believe, constructively together. But it is new and I understand the scepticism in your questions and I think there is going to be a lot of scepticism because this is not going to wave a magic wand. But, we are exploring together rather than in confrontation an area that I believe is immensely important for the protection and promotion of human rights.

KLAUS TOEPFER, EXECUTIVE DIRECTOR OF THE UNITED NATIONS ENVIRONMENT PROGRAMME (UNEP): First of all I underline what Mary Robinson said. It is needed to sit together and discuss a common project. We have a long experience in the cooperation with private business. You know that we have the Business Council of Sustainable Development. It was very corrective in the preparation of the Summit already in 1992 and we are in direct contact since then. We developed for example the global reporting initiative, so that we have something like a scheduled reporting with regard to the environmental performance of private industry. And that is a very strong instrument, because it is monitoring the performance. It is a feedback, especially also for small and medium-sized industry. We are absolutely convinced, it was mentioned here, that we have to be concentrated to the activity of small and medium-sized industry in developing countries as well.

So we have this initiative. We are going in with regard to an initiative of cleaner production. That is already developed. It is signed by quite a lot of Governments and of small, medium- and big-sized companies and I sincerely believe that this is a good example for best practices. We have to single out something like a common data bank of best practices, how to handle specific fields of environment-related activities. We have to prove, again and again, that it can be a win-win situation with regard to overcoming poverty and having a precautional aspect in the environment.

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I will never forget a sentence of my previous environment minister's colleague of Indonesia in Rio de Janeiro. He mentioned we want to make the development process -- if you did it in the developed countries -- let's be a witch, at first, and clean up later. Now we know that cannot be a solution. We have to combine both. And this can be done in cooperation on a globalizing world, with a private business knowing that each and every development is also linked with an independent solution from private business and our activity.

Mme GASTAUT: Thank you. Two last questions.

QUESTION: Ma question est adressée aux représentants des institutions onusiennes et à M. Kassar. À l'ouverture de cette session de l'ECOSOC, on nous a promis, on nous a annoncé que cette fois-ci, concernant le débat sur la pauvreté, on va dépasser le débat littéraire pour aller vers des pas concrets. Lorsqu'on vous pose la question, vous répondez que c'est un processus. On va commencer un processus pour rappeler aussi des principes et des processus qui sont actuellement en pratique dans le domaine commercial et dans le domaine de l'environnement. Est_ce que cela veut dire qu'on va attendre encore 10 ans pour arriver à un constat que cela a été encore un débat et rien d'autre?

Mme GASTAUT: Le President de ICC, Mr. Kassar.

Mr. KASSAR: I think that my answer will be that this is the second meeting we have had with the Secretary-General and with the United Nations officials. Last year was the first meeting and this is the second. And I must say that during this one year, or 16 months, there has been quite a lot of achievement. First of all the fact that the dialogue has been engaged and we in the business, we are not interested that it drags on and we have immediately set up our work. And a first result was this foreign direct investment code in Africa. So we are going fast too. We should minimize the problem, but we are definitely -- with the leadership of Secretary-General Kofi Annan -- we have accepted the challenge and we are going to meet this challenge.

Mr. RUGGIE, SPECIAL ADVISER TO THE SECRETARY-GENERAL: I would just like to respond to the implication in the question. No, we are not going to wait 10 years and I certainly hope that we don't. As someone who has worked on this issue fairly closely in collaboration with the International Labour Organization (ILO) and the High Commissioner's Office and UNEP, let me say that there actually are very difficult intellectual conceptual problems to work out. We have these three sets of principles: in human rights; in labour standards; and in the environment. What the Secretary-General has asked corporations to do is to translate these into specific corporate management practices. Now, nobody knows how to do that immediately for all of these principles. Some are easier than others. For example, it is fairly easy to translate some of the labour standards into reality because they are perfectly clear, but it isn't quite clear what prudential environmental principles means

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in every instance. These things have to be worked out sector by sector and, in some cases, company by company. Though the job for us now: is that we have the commitment to do this; is to work jointly to translate the general commitment into concrete management practices at the company level where it can make a difference to the way in which people live.

QUESTION: Question for perhaps the ICC and business representatives. In the joint statement today with the Secretary-General, it was mentioned that there was an agreement that the rules based multilateral trading system should not be the forum for addressing issues such as labour standards. I am wondering what efforts you are going to make to convince Governments of advanced economies, such as the United States, to drop their demand for a formal link between labour and trade in the upcoming Seattle ministerial meeting of the World Trade Organization (WTO). And, perhaps more importantly, what efforts you are going to make to convince labour groups in these advanced economies not to pressure their Governments to pursue this objective.

Mme GASTAUT: Thank you. Mr. McCormick, please.

Mr. McCORMICK: The multilateral trading system that exists in the world today is on the road of being developed and it is a very fragile system in my view. To the degree that it is linked with labour, it is linked with the environment or it is linked with any number of other issues -- it could cause a disaster in that trading system. We have an ILO, the gentleman that heads it up is on my left. And the ILO has come out with a declaration of principles. It is to be ratified by Governments and we are in the process of doing that. At the same time recently the ILO adopted a resolution in terms of getting rid of the worst forms of child labour, again directed at Governments. To the degree that we have multiple parties tying all of these issues together with the multilateral trading system we have a very difficult system of negotiation going forward. And it is businesses' point of view that we advocate in every forum, that we deal with labour issues through the ILO and we deal with the environmental issues through the Convention in Kyoto and the others that are going to follow and not link them to the multilateral trading system as many would like us to do.

As I said before, the trading system is fragile. We have seen difficulties with it this year. Without those linkages and to the degree that we put more linkages in it, my view is that it will not go forward. So the advocacy of this Organization, of the ICC and the advocacy of local organizations inside the United States is to work with these issues as side agreements, as was done in NAFTA, as opposed to embroiling them in the middle of the negotiations.

One thing that I just want to say in closing is that we talk about the United Nations today and we talk about business today. I think we leave people with the impression that it is a United Nations direct relationship with

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business. And it is. But there is a third party involved in every country in the world and that is the local government that exists in each of those countries and the advocacy of the ILO. And it is for those Governments to adopt those conventions, and then for business within its codes of conduct to live within those rules -- and we have a partnership as I see it between the United Nations, the local governments and business -- a system of rules that needs to exist and incorporate codes of conduct that embrace those rules that exist in those localities as well as go on, in terms of the businesses' view, of corporate social responsibility. I realize that is not directly related to the question, but I just wanted to mention that there is a big role for Governments here and for business to live within those rules that exist and for these individual Governments to ratify these conventions.

Mme GASTAUT: I thank you all for this press conference.

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