PANEL DISCUSSES GLOBAL COMPACT AT HEADQUARTERS PRESS CONFERENCE

Press Briefing

PANEL DISCUSSES GLOBAL COMPACT AT HEADQUARTERS PRESS CONFERENCE

The Global Compact would become effective through partnership dialogue, public awareness, and group action, but was not in itself an enforceable legal document, a panel of corporate and non-governmental leaders agreed at a Headquarters press conference yesterday afternoon. [The panel was one of two teams meeting to discuss the implications of the agreement signed by some 60 multinational corporations, labour unions and watchdog groups. A summary of the other panel's deliberations is being issued separately.]

"The process, this morning, appears to be a voluntary process, between an organization and businesses with the support of the public and international agencies", said Mr. Yves-Thibauld de Silguy, Senior Executive Vice-President, Group Suez Lyonnaise, in response to a correspondent's question about sanction regimes for violations of the Compact. "It is not a substitute for the action of governments." The Global Compact could be a forum in which regulations are developed that make positive business and social policy, he said, but efforts within the Compact, at this point, were voluntary and cooperative.

Joining Mr. Silguy on the panel was Dr. Jurgen Zech, Chairman and CEO of the Gerling Group; Oded Grajew, President, Instituto Ethos; and Dr. Youba Sokona, Deputy Executive Secretary of IIED/RING.

Mr. Silguy said that an important step had already been taken that morning as business, United Nations and civil society leaders assembled around the same table. The crucial question now was how the nine principles of responsible business practice could be implemented by the companies, and how that implementation would be controlled. In the dialogue that would answer the question, he said, it was particularly important that low-income communities participated.

Dr. Zech stressed the importance of developing guidelines by which all companies had to work. Otherwise, companies that were socially responsible might be put at a competitive disadvantage. Indexes to environmentally responsible companies already existed, and those were effective because they also described a company's efficiency. But there must be guidelines for all relevant areas. On the question of enforcement, he suggested that companies could be expelled from the Compact for not abiding by its principles, but civil institutions should be checking on compliance at that point.

He believed that his company, which was taking on projects such as waste treatment and energy efficiency in Greek islands that faced increased tourism inflows, was on its way to working compliance with the principles of the Compact.

Mr. Grajew said that his Institute, based in Brazil, had signed up businesses representing 18 per cent of the economy in a campaign to foster a culture of social responsibility, in relation to such issues as child labour, environment, work conditions, and community enhancement. It would be useful, he said, if there were monitoring tools in those areas -- through United Nations

Global Compact Press Briefing - 2 - 27 July 2000

partnerships -- to receive complaints, investigate and rectify situations, and publicize recalcitrant violators.

But the involvement of civil society in shaping business practices was crucial, he said. Unions, non-governmental organizations (NGOs), consumers and the media needed to be involved. The power of the media was particularly important, and he proposed forming a Committee, under the Global Compact, of telecommunication companies working to improve the culture of social responsibility.

Dr. Sokona, whose organization is a networking group of NGOs working for sustainable development, said that monitoring, transparency and enforcement mechanisms would be obvious instruments in developing nations, if projects were set up in accordance with the real needs of poor communities. For that to happen, policy dialogue with stakeholders, on governance issues, needed to take place in various regions.

A correspondent asked Mr. Grajew what steps could be taken to ensure transparency in an economy like Brazil's, where cost-effectiveness was so important. He replied that it was most important for all actors to be aware, and to develop criteria that guided all their business relations. The media should help publicize good and bad practices.

The United Nations relationship with companies, he went on, should provide a model. After all, it bought a great deal of goods and services. It needed to apply criteria to all its commercial relations -- even asking itself, for example, what kind of companies were providing today's lunch.

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