HEADQUARTERS PRESS CONFERENCE TO MARK FIRST YEAR OF ‘GLOBAL COMPACT’

The United Nations-led initiative known as "The Global Compact" was really a call on businesses to be global corporate citizens.  That meant going beyond the financial bottom line to embrace the social agenda, George Kell, Senior Officer in the Executive Office of the Secretary-General, said today at a Headquarters press briefing to mark the year since the launch of the programme.  

Mr. Kell distributed copies of a newsletter to correspondents, saying he wished to provide them with an update on the Global Compact, which seeks to bring about positive change in those areas of human rights, labour standards and the environment that were relevant to the business operations of their participants. The Compact embodies nine core principles distributed among those three key areas, which, it believes, should be integrated into economic activities everywhere.  The nine principles are:  businesses should support protection of human rights; make sure they are not complicit in human rights abuses; uphold the right to collective bargaining; uphold the elimination of forced labour; uphold the abolition of child labour; eliminate employment discrimination; support a precautionary approach to environmental challenges; promote greater environmental responsibility; and encourage environmentally favourable technologies.

Mr. Kell said that the Compact was a call to action by Secretary-General Kofi Annan at the World Economic Forum in January 1999, when he challenged the international business community to embrace those nine universal values in the field of environment, human and labour rights.  The launching of the initiative exactly one year ago at the United Nations had been attended by some 50 major companies, by labour leaders and by more than a dozen leaders of civil society organizations. 

One year later, it was still an initiative that fired the imagination, he said.  The network was growing, as indicated in the list of engaging actors.  Last year, only 50 companies had taken a stand on human and labour rights and the environment.  Today, several hundred had already done so.  Many inroads were thus being made in many quarters.  There had been a fantastic response in many emerging and developing countries, home to more than half the participating business leaders.

He said the newsletter sought to capture all of the action currently in progress.  At the same time, it was too early to judge the initiative.  He would be ready to say much more by October and November, when some of the milestones would be challenged.  One of them was "the learning forum", which enabled participating companies to share their experiences in working with the nine principles.  A research network had been mobilized to help make that happen, and participating labour groups and non-governmental organizations (NGOs) would be able to comment on the cases submitted by companies. 

He went on to say that a growing number of countries were stepping forward and taking a stand on those issues, especially developing countries.  That was only the first step, however.  Thus, he had decided not to publish the list of companies which were sending a letter to the Secretary-General pledging their support.  He would wait until he had a submission from them.  He expected to be able to go public with the names by late October-November.

Policy dialogues were being opened with all of the actors in business, labour and civil society, he added.  Those had been organized around the theme of the role of the private sector in zones of conflict.  That was a very complex theme, there were currently five working groups considering "deliverables".  Again, he would be ready to go public with more on that later in the year.  The initiative continued to thrive, although major challenges had remained.

Asked to identify those challenges, he said one was to establish universal business principles.  The goal was to get those nine universal principles out there and make them an integral part of business activities everywhere.  Establishing a global network and making it coherent and credible was another key task.  Concerning submissions, it was essential to ensure that those conveyed the right quality and reflected actual changes within companies.  Organizing the dialogues was another main challenge.

Another correspondent asked if any of the companies were using the United Nations logo, and whether there was some kind of monitoring on whether they were respecting the principles.

Mr. Kell said there were very solid governance elements in place.  The Pact would not accept corporate funding when there was any conflict of interest.  Also, the use of the logo was strictly regulated and there were specific guidelines on that.  So far, he had not encountered a single case where the logo had been abused.  He could not rule out that possibility, but his legal adviser was ready to step in. 

He said that the learning forum was a way of testing the seriousness of the initiative within individual companies.  In October, those would share their experiences and lessons learned in working with the principles, thereby opening themselves to the public eye, inviting comments and withstanding the test of scrutiny with regard to their sincerity and progress made.  The pilot phase was in full swing.  By October, he would be ready to go public with more.

Replying to a question about sources of funding, he said it came from governments and a trust fund established by the Secretary-General.  The funding was very modest, as the Compact was functioning as an "issue network".  In other words, there was no bureaucracy in New York to administer the details.  The Compact was involving other actors, including other networks, to help carry forward the message and bring it to action.  Those networks had comprised business and labour groups, NGOs, and academic institutions.

Asked about the budget, he reiterated that it was very modest, enough to keep a few highly motivated young people going.  He was working closely with the International Labour Organization (ILO), the United Nations Environment Programme (UNEP) in Paris, the United Nations High Commissioner for Human Rights (UNHCHR), and increasingly with the United Nations Development Programme (UNDP), which was organizing around the world to bring the Global Compact to the local level.  So the United Nations core agencies were managing much of the substance of the Compact.

He said "this is ground zero now" to another question about the initiative's progress.  The initiative had started last year with one big open meeting.  It had slowly geared up the network operation and was still experimenting with it.  The figures involved were fairly modest, with maybe four to five people in the office, and some overheads.

Through the newsletter, the Compact had made a serious effort to take stock of "progress in action", he added.  That had provided a flavour of what was under way:  dozens of initiatives, and major agreements being discussed between international labour and transnational corporations.  Those were concrete outputs, which had given labour a global avenue from which to strike deals with big companies. 

Also, he said, there were individual companies that were taking a stand on human rights.  For example, there was a Scandinavian network that was expected to take a major stand at the upcoming Durban Conference on racism.  For the first time, business leaders were taking a stand on diversity in the workplace.  There was a strong indication that the call was being taken up and a lot was going on. 

The Global Compact, he replied to another question, employed three mechanisms:  global issue dialogues; the learning forum; and action undertaken by individual participants.  The action under way provided a very rich picture, but it was too early to truly evaluate its success or impact.  Clearly, the Compact had been inspiring many businesses, NGOs and labour to join, and its nine principles were increasingly taking root in many countries.

A correspondent recalled that an early problem was that American companies had not been ready to join, but had done so since.  Did he have a list of those companies?

He said he could not provide a list, but he could assure the correspondent that there were now nearly a dozen such companies.  Just yesterday, a major pension fund had joined.  He could not give recognition to a company for just taking a stand on the principle, he could recognize it only once a concrete pledge had been made.

The first level of joining was for the Chief Executive Officer to write a letter to the United Nations Secretary-General stating that he or she embraced the Global Compact, would take a stand on the nine principles, and ensure that the company's employees knew about it.  The CEO would also promise to share, at least once a year, a concrete example of progress made or a lesson learned. 

He said he had received several hundreds of such intentional commitments, but the concrete case study provided a more tangible way to review the cases.  All of the participants from the first meeting last year had appeared on the Web site, but those who had joined since then had not.

Continuing, he said that the decision to accept new members was a collective undertaking.  He was only providing the platform; it was the participants who were driving the group, both in terms of content and also in terms of the evolving process.  The initiative was still young.  Another year or two was needed to really see where it was headed.

Companies were increasingly under pressure to take a stand on those issues, he responded to another question.  Consumers had demanded it and people had demanded it.  Also, global corporations had increasingly realized that when operating in different countries or regions, they could not escape the social challenges there.  Companies knew what it meant when a country was suddenly embroiled in conflict, for example.  Businesses understood that risk. 

Increasingly, companies were being pressured by shareholders owing to the socially responsible investment movement.  For some companies, there were strategic advantages, such as for insurance companies who knew that climate change

was real and already had to pay out on that already.  So there were those companies that stood to gain when such issues were advanced.

Did the nine principles differ significantly from the World Business Council's international code of conduct? another correspondent asked.

Mr. Kell said that the World Business Council was a supporting actor in the Compact.  The Council did not have a code of normative or principled behaviour.  There were virtually dozens of national voluntary issues in the labour field.  His was a global initiative, and not geared towards a particular sector or country.

Another correspondent said she was having a hard time describing the organization, since, if it was not public, it was not accountable.  Also, it was difficult to describe a budget without a figure, she said.

He said that the budget was approximately $1 million per year for the core function, but for the network components, that figure would have to be multiplied.  Included in the newsletter were examples of how companies worked with the Compact.  But that was distinct from the learning forum, about which he needed a few more months to go public. 

Pressed to reveal the new companies seeking to join, he said that if he were to make public all of the companies that were just taking a stand, he would be accused, and rightly so, of giving recognition to companies for just taking a public stand.  The experience of the past year had taught him that he could not do that until there were concrete examples. 

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