UN Global Compact delists 32 Indian companies

By Joseph Gathia.

The United Nations Global Compact Office (UNGCO) has delisted nearly 600 companies, including 32 Indian ones for failure to comply with the integrity measures introduced in 2004.

The list of firms removed from the scheme features a wide range of companies, including: Cement Corporation of India, Hindustan Aeronautics, Hindalco, Kundermukh Iron Ore, Apollo Hospitals, Atlas Cycles, Hindustan Organics Chemical Limited, Shipping Corporation of India, MMTC, MTNL, Punjab National Bank and Unit Trust of India to name few.

Among international companies the UNGCO has delisted Groupe Fiat France and the subsidiaries and affiliates of a number of high-profile multinationals, such as Ernst & Young, Brazil, Barclays Bank of Ghana Limited, L’Oreal Argentina SA, and Mitsubishi Motors Corporation.

Businesses signing up to this UN scheme are required to adhere to ten guidelines governing corporate behavior and commit to adopting best practices on human rights, the workplace, the environment and anti-corruption. In return, they are allowed to publicise themselves as a member of the Global Compact, access UN development resources and share best practices with other signatories to the initiative.

In accordance with the integrity measures, companies are required to communicate annually to their stakeholders on progress made in implementing the ten principles of the UNGCO. Failure to meet the communication on progress (COP) deadline results in a company being listed as ’non-communicating’ on the Global Compact website.

The delisting policy was first implemented in January 2008, when 394 companies were removed from the participant list. Since then, an additional 236 companies have been delisted – bringing to 630 the total number of companies delisted since the policy was implemented. In addition, 317 companies are currently listed as ’inactive’ on the website, of which 184 are at risk of being delisted by 2008.

Despite the large number of companies removed from the participant list, the overall number of participants continues to rise. During the first half of 2008, 701 new companies have joined the UNGCO. The total number is 5982.

The adverse impact of such delisting is that the people and companies believing in ethical investment from the developed countries shun investing in such companies.

The following companies from India have been delisted by the UN:

Abar Group, Artificial Limbs Manufacturing Corp of India, Atlas Cycles Limited India, Apollo Hospital, Bharat Aluminium Company Limited India, Cement Corporation of India, Central Cottage Industries, Dena Bank India, Dredging Corporation of India, Engineering Projects India Limited, Excel Industries Limited India, Heubach Colour Private Limited India, Hindalco Industries Limited, Hindustan Aeronautics Limited, Hindustan Organic Chemicals Limited, Hi-Tech Carbon India, Infrastructure Development Finance Company Limited, Kudremukh Iron Ore Company, Mahanagar Telephone Nigam Limited, Mazagon Dock Limited, Metalman Auto Private. Limited, Mineral Exploration Corporation, MMTC, North Eastern Electric Power Corporation Limited, Punjab National Bank, Scooters India Limited, Shipping Corporation of India Limited, Transnational Supply & Service, Unit Trust of India, Wadia Group and Water & Power Consultancy Services Limited.

Source: Merinews.com (3/7/2008).