PRESS BRIEFING ON GLOBAL COMPACT SUMMIT

press briefing on global compact summit

Briefing correspondents on the Global Compact Leaders Summit taking place at Headquarters today, representatives of business and civil society stressed the need to implement the Compact’s principles on corporate responsibility, especially in country’s lacking legal frameworks, and to translate global business into social benefits. 

Opening the briefing, George Kell, Executive Head of the Global Compact, stressed that today’s meeting was a crucial milestone for the United Nations in its efforts to work with non-State actors.  He explained that the Compact aimed to make global markets more stable by promoting universal principles, and more inclusive through voluntary partnerships to complement what governments did or did not do.

Highlighting the Global Compact’s tenth principle on anti-corruption, to be launched today, John Brown, Chief Executive Officer of British Petroleum, stressed that eradicating corruption was a vital precondition to corporate responsibility.  Corruption sent tremendous signals to people that merit, education and development were of no consequence, which undermined Compact principles.   The Millennium and other development funds should be put towards education and health in certain countries in exchange for better progress on transparency and governance, he told correspondents at Headquarters today.

Furthering that theme, Fred Higgs, General Secretary of the International Confederation of Chemical, Energy and Mine Workers, speaking for the labour movement, said that corporations certainly had a role to play in improving standards across the globe.  The real test would be whether they could implement their principles on corporate responsibility in countries where there was no legal framework requiring them to do so -- not whether they could apply them in Western Europe or North America.

Talal Abu-Ghazeleh, Chief Executive Officer, Talal Abu-Ghazeleh Organization, representing business interests from the South, said the Compact was an opportunity to change world capitalism, which had been great in creating wealth, into a system focused on social benefits.  The world should develop a social benefits indicator to see how economic growth was reflected in everyday life.

Speaking for civil society, Achim Steiner, Director General of the World Conservation Union, questioned whether companies that had publicly committed themselves to Compact principles would actually be willing to follow through with them in the way they did business.  Major change could only come about through implementation, by putting words into action, not simply by signing up with the Compact.

Speaking for governments, Leif Pagrotsky, Swedish Minister of Industry and Trade, stressed that the Compact could help promote responsible business behaviour and gather support for globalization, a positive force against poverty.  Governments needed to explore how they could encourage businesses to adhere to Compact principles, while ensuring that internationally negotiated and universally accepted norms were implemented without challenging each nation’s right to its competitive advantage.

A correspondent asked whether the limited involvement of two of the world’s big powers -- the United States and the United Kingdom -- would negatively affect the Compact’s work.  Mr. Brown said it would be critical that those countries become members in due course, especially the United States, which was home to the vast bulk of the world’s business.  Mr. Kell added that many participants from the United States were attending the Summit.

Addressing Mr. Brown’s notion of supplying assistance for education and health in exchange for better transparency and governance, another correspondent asked whether it was actually possible to pay people to behave more properly.  Mr. Brown said it might be necessary to provide incentives to restructure governance and to improve reporting methods on the effective use of funds provided for health and education.  There would always be moral hazards, human failings and differences of opinion, but this was one way to perhaps use transparency and governance in ensuring that money was used effectively.

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