Thursday, 13 November 2008

Global Compact companies embroiled in OECD Guidelines complaints

Here at Global Compact Critics our curiosity was sparked by looking at a list of companies accused of violating the OECD Guidelines for Multinational Enterprises (the Guidelines). Whilst scouring the OECD Watch database we wondered how many of the companies mentioned were members of the UN Global Compact. Some basic investigation revealed interesting findings.

Based on a list of 126 companies involved in OECD Guidelines complaints, as of the 12th of November 2008, 22 businesses were found to be UN Global Compact members, approximately 17.5 percent of all those accused of Guidelines violations. These companies include: Accor, Airbus SAS, Aker Solutions ASA (formerly Aker Kværner ASA), Anglo American, Ashanti Goldfields (for which parent company AngloGold Ashanti Company is a Global Compact member), Bayer, BHP Billiton, BP p.l.c., Cerrejón Coal / Carbones del Cerrejón, ENI, Votorantim, ING Belgium (for which parent company ING group is a Global Compact member), KBC Bank (for which parent company KBC Group is a GC member), Korea Gas Corporation, Nike, Nordea, Total (which received a Guidelines complaint as part of the Total Fina Elf consortium), StatoilHydro ASA (formerly known as Statoil ASA),Volkswagen AG and ENI AGIP, Repsol YPF and Techint Argentina (as three of the seven consortium members of accused Guidelines violator, Oleoducto Crudos Pesados).

The complaints against these companies vary from human rights and environmental violations to the use of financial coercion in corruption and bribery accusations. The Guidelines complaints paint a vastly different picture of the businesses involved compared to that portrayed on the Global Compact website.

BHP Billiton is a pertinent example of this discrepancy. On the 6th of June, 2006, an OECD Guidelines complaint was brought against the company for practices undertaken by Cerrejón Coal, of which it is a third owner. According to the complaint, Cerrejón Coal attempted to depopulate an area of Columbia's La Guajira peninsula by destroying a 200 year old village "and forcibly expelling the remaining population through a purported expropriation. Another five communities are suffering from the effects of […] strangulation, actions taken by the company that are designed to make living unviable in the area and therefore drive the population out."

However, BHP-Billiton's 2006 Sustainability Report was awarded as a Notable Communication on Progress by the Global Compact office. The report (it takes forever to download it if you have a slow connection to the internet) includes a case study (page 517) of Cerrejón Coal but mentions nothing about the OECD Guidelines complaint nor about the content of the accusations, instead appearing to be more of a publicity exercise.

BHP-Billiton was one of 14 companies that were members of the Global Compact prior to being accused of OECD Guidelines violations. Not only do these findings raise questions about the standards of Global Compact companies but also about the motivation behind joining the Compact for those companies that did so only after accusations of Guidelines violations. Was it the draw of a more responsible image without requiring real changes in their conduct?

© Photo by Robin Thom.

1 comment:

  1. Anonymous21/7/09 20:48

    The number of Global Compact companies alledgedly in breach of the OECD Guidelines is considerably greater than the figure you provided. In June 2007 Transparency International German Chapter filed a complained with companies listed in the UN Report on the Oil for Food scandal in Iraq. Many of these companies are members of of the GC.