Global Compact and OECD intensify collaboration

The UN Global Compact and the Organization of Economic Co-operation and Development (OECD) have recently begun to enhance their collaborative efforts, particularly in countries that have both Global Compact Local Networks and National Contact Points (NCPs) for the OECD Guidelines for Multinational Enterprises.

Following its participation in the 2009 Annual Meeting of the National Contact Points, the UN Global Compact asked its Local Network Focal Points in countries that adhere to the OECD Guidelines for Multinational Enterprises to actively explore collaborative opportunities with NCPs. Additionally, Focal Points were encouraged to seek advice and guidance from NCPs, particularly regarding follow-up procedures for OECD Guidelines implementation.

In an exchange of letters between Georg Kell, executive director of the UN Global Compact, and Manfred Schekulin, chair of the OECD Investment Committee, a mutual interest in closer cooperation was indicated. Following a letter from Mr. Kell in September 2009, Mr. Schekulin agreed that intensifying linkages between Global Compact Local Networks and NCPs was a desirable goal and suggested that "possibilities for achieving this should be further explored". Mr. Schekulin additionally invited the UN Global Compact to consult in the ongoing process of updating the OECD Guidelines.

The OECD Guidelines for Multinational Enterprises embody what OECD governments have agreed are the basic components of responsible corporate conduct. They cover a range of issues such as labor and human rights, the environment, bribery and corruption and information disclosure. Though voluntary for companies, governments that have endorsed the Guidelines are essentially conveying that they expect multinational corporations to follow these principles and standards of good conduct in their operations worldwide. Thirty OECD member states have adhered to the Guidelines, along with 12 non-member countries. Civil society organizations can submit a "specific instance" (complaint) about alleged breaches of the Guidelines to a government's NCP.

In the first week of November further collaboration between the OECD and the Global Compact will occur through the First Asia Pacific Trade and Investment Week in Bangkok, hosted by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). This will include a meeting of Global Compact Local Networks led by Marinus Sikkel, in charge of UNESCAP's regional support hub for the UN Global Compact and former OECD Investment Committee Chair. Also that week, the OECD-UNESCAP Conference on Corporate Responsibility will be held, with discussion focused on synergies between these two international corporate responsibility instruments and the upcoming updating of the OECD Guidelines.

© Photo by hastingsgraham.

John Ruggie: "Global Compact is a safe point of entry"

On October 22, John Ruggie, special representative of the UN Secretary-General on Business and Human Rights, participated in a press briefing at the UN headquarters in New York. He briefed correspondents on his report proposing a framework for business and human rights, which he presented to the Third Committee (Social, Humanitarian and Cultural) of the General Assembly.

Matthew Lee from Inner City Press asked him several questions about the UN Global Compact. Mr. Ruggie, who is known as one of the main architects of the Compact, provided Mr. Lee with some answers. Among other things, Mr. Ruggie said that, for many companies and governments in the developing world, the Compact is a "safe point of entry" into the world of corporate social responsibility.

Here is a transcript of some of Mr. Ruggie’s statements:

"The Global Compact is what it is. It was intended as a learning mechanism, as a learning forum, where companies can get used to the idea of corporate social responsibility. I think it has done that particularly well in developing countries. […] I am not sure whether the people who lead the Global Compact would agree with this description, but my sense is that for a lot of companies and a lot of governments in the developing world this is a safe point of entry into the global CSR world. And, you know, it does that. It does that, from what I can judge, reasonably well. There is a whole bunch of other things that it doesn’t do. It was not intended to police ever, to begin with." (click here for video, RealPlayer required)

Mr. Ruggie acknowledged that there are companies that claim to be good corporate citizens just because they are members of the Global Compact. He believes this is a case of non sequitur. The fact that a company participates in the Compact does not mean it adheres to all relevant international laws. According to Mr. Ruggie, companies that use this argument do damage to the Global Compact.

© Photo by UN Photo / Evan Schneider.

Russian companies remain aloof from the Global Compact

On October 7 the Global Compact Office announced that over a thousand companies have been delisted since 2008 for not communicating on progress. Business participants are excluded from the initiative if they fail to submit communications on progress (COP) to the Global Compact Office. A company must submit a COP to the public Global Compact database within one year of joining the Global Compact. Consecutive failures to submit a COP leads to the delisting of the company.

Some local networks have lost many members. In the Philippines there are now only eight active business participants. A couple of years ago, the Compact had more than 150 participants in the Philippines. In 2006, UNDP received funds from the Swiss government to finance a project to develop the Philippine Local Network. After the conclusion of this project, participation in the local network dwindled.

The local network in the largest country in the world is another example. The Global Compact was launched in Russia in 2002. In April 2008 Secretary-General Ban Ki-moon attended the (re)launch of the Global Compact Network in Russia. In spite of Mr. Ban's charm offensive, Russian companies could not work up enthusiasm for the initiative. Currently there are only 13 active business participants in the whole of the Russian Federation.

Many local networks in Africa seem to experience the same problem. There are only two active business participants in Côte d'Ivoire. In 2007, the local network in this country had 28 members. Only 14 companies in Nigeria, where the Compact was launched in 2006, participate actively in the initiative. The total number of participating companies in the most populous country of Africa is 23, which means that about 40 percent of the business participants in Nigeria do not report on progress.

Although many companies have been excluded from the Compact, the number of participants is still growing. Every month around a hundred new businesses join the initiative. The total of active business participants currently stands at about 4.200.

While delisted companies are removed entirely from the Global Compact's public database, the initiative allows companies to return to active status. To officially rejoin the Global Compact companies must provide a new commitment from the chief executive officer addressed to the UN Secretary-General and submit a COP to the public database.

© Photo by anita bp.

Activists send questions to John Ruggie about the Global Compact

A network of activists and civil society organizations called Enlazando Alternativas has published a report that contains several interesting questions to the Special Representative of the UN Secretary-General on Business and Human Rights, John Ruggie. The report provides an overview of human rights violations committed by European companies and discusses the role of European institutions in the creation of a legal framework that "allows transnational corporations to act with impunity". The authors of the report have specific questions about the role the UN Global Compact plays in the area of business and human rights:

- "What is the Special Representative of the Secretary General on Human Rights and Transnational Corporations’ position on the proposal elaborated by the Rapporteur on Human Rights, Martin Scheinin, and the Rapporteur on torture, Manfred Nowak, on the creation of a tribunal to judge transnational corporations? Do you believe that the economic and political fortress and the legal institutional framework that protect the interests of transnational corporations (the WTO and its Dispute Settlement System, the ICSID, regional and bilateral trade and investment agreements...) require a system of control that is far stronger than the one established by the Global Compact – that is, an international ad hoc tribunal?"
- "Why is the Global Compact the main reference for controlling transnational corporations within the UN framework?"

The Enlazando Alternativas network argues that the mandate of the UN Special Representative on Business and Human Rights does not pay sufficient attention to those directly affected by the impacts of the activities of multinational corporations. The report of the network was prepared for a UN consultation on operationalizing the framework for business and human rights presented by John Ruggie. This consultation, which is being held in Geneva, ends today.

© Photo by UN Photo / Jean-Marc Ferre.

Coalition maintains demand to exclude Bayer from the Global Compact

In a letter of complaint sent to the UN Global compact Office on June 16, the Coalition against Bayer Dangers (CBG), an international network based in Germany, urged the Global Compact to exclude Bayer as a participant. The coalition said that Bayer seriously violates the principles and the Integrity Measures of the Compact. The complaint is based on the aftermath of a fatal explosion at Bayer's US facilities in Institute, West Virginia, in 2008. According to a US Congress investigation, faulty safety systems, significant shortcomings with the emergency procedures and a lack of employee training led to the catastrophe.

On May 12 2009, at Bayer's annual general meeting, Chairman Werner Wenning commented on the accident and said that "Air measurements at the site perimeter showed no evidence of an elevated concentration of hazardous substances in the environment". Mr. Wenning also referred to a comparison made by the Coalition against Bayer Dangers with the Bhopal accident: "any comparison between our modern facility and the one in Bhopal nearly 30 years ago is completely absurd". Mr. Wenning added that the production process in the plants is under constant monitoring of their experts and of the U.S. authorities.

The Global Compact Office responded to the letter of complaint and asked whether the Coalition wanted to raise the matter under the Compact's Integrity Measures. In its response, the Global Compact Office said: "We do not make any judgment about the truth of the allegations made beyond an initial determination that it falls within the scope of the topics covered by the Global Compact's principles. […] the Integrity Measures are not intended to affect, pre-empt or supplant other regulatory or legal procedures or proceedings in any jurisdiction. The role of the Global Compact Office is generally limited to encouraging dialogue between person(s) / organization(s) raising matters and companies. In most situations, the Global Compact Office anticipates that issues will be resolved through dialogue without further involvement of the Global Compact Office."

In a letter sent to the Compact Office in August 2009, Wolfgang Große Entrup, senior vice president of Bayer AG, said that "Unlike with most non-governmental organizations, a constructive dialogue with the local activist group 'Coalition Against Bayer Dangers' [...] has never been possible". In his letter, Mr. Entrup referred to a hearing directed by a sub-committee of the US Congress, which took place in April 2009. The hearing was a result of Bayer being publicly criticized for overly restricting public access to their information. Bayer claimed this issue involves differences in the interpretation of so-called SSI (Security Sensitive Information) provisions.

In a reply dated on the 25th of August, CBG insisted that Bayer's statements are not consistent. CBG refers to a report of the US house Committee which, they argued, contradicts Bayer's statements: "Documents obtained by the committee raise serious questions about the vulnerabilities of Bayer's inventory of methyl isocyanate (MIC) during the 2008 explosion and about MIC monitoring systems that were out of service at the time of the explosion." In a response to that letter, Bayer claimed that it had initiated the process of improving safety and communication in emergencies. Mr. Entrup said that Bayer has a budget of $25 million to invest in further enhancing operational safety at the Institute site. In its second letter to the Global Compact Office, Bayer also said that it will reduce methyl isocyanate (MIC) storage by 80 percent.

Nonetheless, CBG maintains its demand to exclude Bayer from the UN Global Compact due to its "violations of the Compact’s principles in the aftermath of the Institute explosion".