Press Conference on Governmental Role in Engaging Private Sector

 

for Attainment of Millennium Development Goals

 

The two-day United Nations Global Compact Leaders Summit 2010 would combine a distinguished group of public servants familiar with how to “speak business” and a distinguished group of business leaders accustomed to speaking up for the public good, Robert Orr, Assistant Secretary-General for Policy Coordination and Strategic Planning, said at Headquarters today.

Set to open in New York City tomorrow morning, the Summit would be “rather extraordinary for us”, Mr. Orr said, noting that the Secretary-General had just released his annual report on the Millennium Development Goals, which stated clearly that business must be part of the solution and that, in fact, the Goals could only be achieved if Governments and the private sector acted collectively.

Joining Mr. Orr at the press conference — on the eve of the Summit and 10 years after the launch of the Global Compact — were Arun Maira, a member of India’s Planning Commission; Alan Duncan, Minister of State for International Development of the United Kingdom; and Brian Mikkelsen, Minister for Economic and Business Affairs of Denmark.  Central to their discussion was the role of Governments in private-sector engagement for achievement of the Millennium Development Goals.

Mr. Maira asserted that it was a momentous time, noting that the systemic challenges of the century, particularly in the areas of development and sustainability, were among those highlighted in the internationally agreed development Goals.  Partnerships, including between Governments and the private sector, were crucial to addressing those challenges, he stressed, adding that they would ultimately benefit local people in their own localities.  That was the critical lesson being learned in India — national Governments had a critical role to play in providing communities with sustainability, livelihoods and security.

Partnerships were founded on good contracts, but also on good relationships within a social compact, he said, pointing out that the best partnerships had both.  Trust was fundamental to sustainability and progress, he said, adding that in light of recent developments, he understood the public call for Government action.  Indeed, Governments should consider ways to improve relationships and strengthen the social compact.

Noting that the Global Compact had built up the world’s largest private network for development and sustainability issues, he said most of its members were large companies, though it was seeking to expand its reach to small and medium-sized enterprises.  The Compact was uniquely placed to provide Governments with best practices, and the ministerial meeting would focus on sharing ideas among Governments committed to strengthening partnerships for sustainability and development, he said.  Critical questions included how Governments could best use business inputs to reduce corruption, among other aims.  The progress made in challenging business to spotlight development would also be examined, as would lessons learned, in order to make people-centred, private and public partnerships actually work.

Mr. Duncan warned that, when handing out money, countries became dependent and the private sector was ignored.  Without energizing the private sector in developing countries, those nations would not live up to their potential.  The scale of foreign direct invest across the world absolutely dwarfed the amounts spent on aid, but only 2 per cent went to the poorest countries.  The 10-year-old Global Compact needed to enter a new phase, where the “mental DNA” of companies around the world would become a force for the massive good of developing countries through such investment, he said, adding that his message today was to see that force unleashed.

“It could happen,” he insisted, stressing that it was possible to work with Governments in support of stable national environments that would attract long-term investment and large-scale capital development, while helping companies manage risk and share the costs associated with that business model.  Information and technical assistance could be provided to help companies understand what business models were possible.  That entire agenda was a force for good and needed to be unleashed for the benefit of developing countries, he said, adding that the Millennium Development Goals remained the key targets for all such efforts, and many were “way off track”.

Mr. Mikkelsen said that, while Governments and business must take an active part in solving the challenges of today, it was not only about what Governments could do on their own, but what the two could do together to solve social and environmental concerns.  Governments should set out clear policy goals for businesses and investors, with a social and environmental focus.  They should create an environment where information, training and tools helped the business sector to engage responsibly, for which transparency and trust were needed.

In Denmark, an action plan for corporate social responsibility had set ambitious and clear goals, he said, adding that the country had found it possible to generate growth in a responsible manner.  The action plan consisted of about 30 initiatives built on key principles, including that of integrating corporate social responsibility into all business strategies.  That practice applied in a global market and also underpinned the Global Compact.  Tools had been developed to support the action plan’s goals, and more than 12,000 managers of small and medium-sized enterprises had been trained.  That training concept had now been adapted by the World Bank, he said, expressing hope that States around the world would encourage business to integrate corporate social responsibility so as to meet current global challenges.

Asked how business could be conducted in conflict zones without becoming embroiled in human rights abuses or violating Security Council sanctions, Mr. Duncan said all parties must be allowed to take rational economic decisions, given the requisite stable backdrop for investment.  That put the onus on organizations on the ground to try to establish the rule of law, property rights, a stable Government and good governance.  He acknowledged that it was fanciful to imagine that that could happen easily and quickly, which was why he advocated small business start-ups, but stressed that it was from small beginnings that much progress could grow.

In response to a question, he said the Danish Government had been financing the action plan and had also contributed financially to the Global Compact secretariat at Headquarters, in addition to having financed projects in Kenya and elsewhere.  As a result of the action plan, 94 per cent of big businesses in Denmark had voluntarily reported on the progress they had made in corporate social responsibility during 2010, a much larger proportion than had done so in previous years.

Mr. Maira added that in India, the central quest was to combine capitalism and democracy.  Getting there required getting the big companies on board to devise appropriate business models.  However, small enterprises and entrepreneurs were an important part of the “distribution chain”, he stressed, adding that the ideal business model should be premised on the notion that big companies did not have to own everything.  Governments had a role to play in enabling small enterprises to grow and connect with others and, of course, in regulation.

Asked about the association of PetroChina, a possible sponsor for the Summit, with human rights abuses, and whether the energy giant BP was living up to corporate social responsibility standards, Mr. Duncan said it would not be fair for him to answer those questions.

Mr. Orr said the Summit’s many sources of support were publicly listed and showed broad and deep support for the agenda.  In terms of a specific company, he emphasized that being a member of the Global Compact did not make a company perfect; it meant that the company was willing to subject itself to scrutiny.  What companies put in their reports should be held up as examples and welcomed, he said, recalling that the Compact had de-listed 1,300 firms in 2009.  That demonstrated the rigour of the process, he said, adding that membership was growing, despite that level of de-listing.

Responding to another question, Mr. Duncan noted that the concept of corporate social responsibility was maturing, and recalled that a few years ago, the Global Compact was seen simply as a list of big companies promising to act responsibly.  Corporate social responsibility now meant that companies publicly justified everything they did.  It also signified a commitment to try to expand their horizons beyond the immediate, towards doing better things for the greater good across the world and not just for shareholders.  The Compact was “a fantastically exciting agenda for many companies”, he added.

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For information media • not an official record