PRESS CONFERENCE ON GLOBAL COMPACT

PRESS CONFERENCE ON GLOBAL COMPACT

Big business knew that it was already at the centre of world criticism about what was going on in the name of globalization; the Global Compact was a chance to show the world what it was doing about it, a member of the Advisory Council for the Secretary-General's "Global Compact" initiative said today at a Headquarters press conference.

Thus, big business had a particular responsibility to take up the challenge that the United Nations Secretary-General had given them and make the Global Compact a new element in shaping globalization, said Bill Jordan, General Secretary, International Confederation of Free Trade Unions. It should be prepared to stand up and say it was part of a process that led to benefits for all.

The Special Adviser to the Secretary-General, Michael Doyle, moderated the press conference, which followed the first ever meeting of the 17-member Advisory Council.  The Global Compact initiative promotes action in support of nine internationally accepted principles on human and labour rights, and the environment.  It is comprised of senior business executives, international labour leaders, and heads of civil society organizations, and its purpose is to assist the Secretary-General in his effort to promote cooperative solutions to the dilemmas and challenges of globalization.

Mr. Doyle was joined by the following members of the Advisory Council, including Mr. Jordan:  Robert Hormats, Vice-Chairman of Goldman Sachs; Barbara Krumsiek, President and CEO of Calvert; Sam Jonah, Chief Executive Officer of Ashanti Goldfields Company Limited; and Achim Steiner, Director-General of the World Conservation Union.

[Under the nine principles, the Secretary-General asked world business to: support and respect the protection of international human rights within their sphere of influence; make sure their own corporations are not complicit in human rights abuses; support a precautionary approach to environmental challenges; undertake initiatives to promote greater environmental responsibility; and encourage the development and diffusion of environmentally friendly technologies.  Also, to uphold:  freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced and compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation.]

Opening the floor to questions, Mr. Doyle was asked about the Compact's reliance on an honour system and the view that without any specific contract or penalties for violations it was lacking "teeth". 

He said that the Council's key focus was to advance the initiative of the Global Compact, which was a learning forum and based on the view that the best way to make progress in today's world was to encourage companies to teach each other, with the cooperation of non-governmental organizations and unions, as to how to meet the challenges of globalization.  It was geared towards learning as its essence, and to developing initiatives that would show that the Compact could make a difference. 

Mr. Hormats added that the Global Compact was a chance for companies confronting a number of challenges in the global marketplace to learn from other companies about how to address those challenges more effectively and work more closely with emerging country governments and non-governmental organizations.  The principles provided a framework for helping countries address the challenges of globalization.

Ms. Krumsiek said that it was a voluntary programme that began with an intention and had a high degree of expectation.  She felt very keenly the responsibility of advising to the Secretary-General and the Global Compact office about the expectations and kinds of reporting to be shared in raising the level of global corporate social accountability. 

In response to a question, Mr. Jordan first emphasized that global trade unions comprised 157 million union members around the world.  The effects of globalization had certainly given international labour cause for concern, and criticisms were often levelled at the business community, which had been portrayed as guiding, almost driving, the direction of globalization.  Indeed, the business community had been blamed for the "downsides" of globalization.  That thinking, of course, had ignored the responsibility governments had in addressing many of the problems associated with globalization. 

As to why the Council's meeting had not been an open one, he said that functioning in an advisory capacity often was not public; it was not like the role of the national legislatures.  The Council had seen the way in which the Global Compact had been launched and developed so far and was contributing some suggestions for its further development. 

Asked how many companies were actually involved in the programme and how they could be prevented from abusing the seal of approval, Mr. Doyle said that the companies participating in the Compact were ones that had provided an example each year of how they had made concrete specific progress with at least one of the nine principles.  Then, the case was put on a Web site, operative since yesterday.  There were at least 30 to 40 companies in the first phase, with more to come, and their examples would be on the Web site for reference.  The question of abusing the seal of approval -- what some had called the "blue wash" -- was very important.  He wanted to make sure that companies did not simply express their intention of adopting those principles – rather, they must implement them.

Replying to a question about what kind of advice the Council had for the Secretary-General, Mr. Steiner said that some advice had related to the question of how to demonstrate to companies the benefit of joining the Compact.  Did a company become a target if it subscribed to the Compact? he asked.  Many companies had found themselves under much greater scrutiny as a result of commitments made.  The Council had also looked at question of structure.  For example, were more companies a greater measure of success, or was it seeking those companies fundamentally able to influence a business segment?  A third area involved the question of when a company should be asked to leave the Compact.

In response to another correspondent, Ms. Krumsiek said that one of the more challenging questions of the day revolved around how the United Nations should go about examining companies' performances.  One suggestion had been to ask companies to perform periodic self-evaluations, according to the nine principles, and find

some vehicle for communicating that, such as an annual report or a separate analysis.  Interestingly, that suggestion had come from the corporate sector. 

Mr. Jordan added that it had been suggested that a company would take a decision, hopefully at the board level, regarding its duty to be part of the drive to show that it was socially responsible.  Most of the big companies wanted to take that stance, and the Secretary-General had given them that opportunity.  If they took that decision, they knew that they were automatically opening themselves up for scrutiny.

To a further question about what happened in the case of company "backsliding" and whether there was a mechanism for eliminating such companies from the Compact, Mr. Jordan said the point was not to "throw people out of the club"; it was still working on how to get people in.  The club was probably one of the best ones in the world for providing standards to meet and standards to be proud of. 

Mr. Hormats added that a large number of companies around the world were already improving their standards with respect to environmental policies, higher wages and employee education.  But the Compact was an opportunity to codify them and be publicly proud of adhering to them. 

Ms. Krumsiek highlighted three points of evaluation in the Global Compact --entry, participation and exit.  There was work to be done, but there was agreement on two points.  First, if a company did not show evidence of participation, which involved the learning initiatives and dialoguing, it would probably be "disinvited".  Second, a gross violation of the nine principles would prompt the same.  There was not yet a specific definition of how that would be monitored, but constructive discussion was under way.

Asked if there had been any change in the level of interest in the Compact with the coming to power of the Bush Administration and its environmental policies, Mr. Doyle said there was an ever-increasing number letters of intent coming in from the presidents of companies.  Other than that, there had been a striking increase in the number of companies coming in from the developing world.  An initiative that began with the Secretary-General's speech in Davos in 1999 to a predominantly European membership had spread around the globe. 

The participation of North American companies was disproportionately low, Mr. Steiner added.  The Council had looked at that with some concern.  It had suggested that the Compact should rely on the fact that the Secretary-General and the United Nations had a "greater international standing and convening power" than it had had for many years.  There were many corporations in the United States and Canada looking for a different approach.  It had been very clear, even during the climate change discussions, that there were a number of United States corporate interests that were looking for different platforms.  That was at the heart of the Global Compact.

* *** *