Divestment proponents alarmed by recent appointments to the Global Compact Board

By Colleen Freeman.

In a move that has alarmed civil society organizations involved in divestment campaigns, Secretary-General Ban Ki-moon appointed Sinopec Group's Mr. Fu Chengyu and China Enterprise Confederation's Mr. Li Decheng to the Global Compact Board last month. The appointments are yet another example of the Global Compact nominating board members from companies or business organizations with CSR track records that are unverifiable or inconsistent with the 10 principles of the Compact.

Formerly China Petrochemical Corporation, Sinopec Group has come under fire by Investors Against Genocide and many other organizations that work to persuade pension funds to divest from companies whose operations in Sudan have benefited the regime in Khartoum. 

The recent appointments to the Global Compact Board, which is heavily dominated by business interests, also ignore key recommendations from the recent evaluation carried out by the UN's inspection unit. The evaluation noted the process for nominating board members "is neither democratic nor inclusive," and recommended that the Secretary-General should:

- Encourage local networks to nominate candidates to the Global Compact Board.

- Propose to the General Assembly the participation of Member States representatives and SMEs on the Global Compact Board.

Currently, the Board is comprised of 13 company representatives, 2 business associations, 2 union representatives and 5 civil society organizations. Critics assert the Board needs fewer business representatives and more participation from civil society organizations, UN agencies and member states to be balanced and multi-stakeholder in nature.

© Photo by UN Photo / Eskinder Debebe.

Great news: Global Compact expels company that refuses to engage in dialogue with activists

On June 2, the UN Global Compact expelled one of its members for failure to participate in the Compact's dialogue facilitation process. Lifosa, a Lithuanian company that imports phosphate from Western Sahara, had refused to engage in dialogue with the Western Sahara Resource Watch (WSRW). WSRW is an international network of organizations and activists that do research and participate in campaigns on companies with interests in occupied Western Sahara. AB Lifosa is the largest producer of phosphate mineral fertilizers in the Baltic states and an industry leader in the European Union. It is subsidiary of Eurochem, Russia's largest mineral fertilizer producer. 

 

Last year, Lifosa admitted that it imported phosphate from Western Sahara on a large scale. The imports never appeared in Lifosa's progress reports submitted to the Global Compact. In September 2010, WSRW asked Lifosa whether it consulted local stakeholders about its activities in Western Sahara. The company responded with a plain “no”. The UN Security Council considers natural resource activity in Western Sahara to be in violation of international law if the people of the territory are not consulted. In December 2010, WSRW sent another letter to Lifosa, asking the company whether it would "follow the example of other ethically oriented fertilizer producers internationally and terminate its imports of phosphate from Western Sahara". WSRW never received an answer to that letter. 

 

According to the Compact's revamped Integrity Measures, a participating company needs to engage in dialogue with a complainant within two months of first being contacted by the Global Compact Office. Otherwise it may be regarded as "non-communicating". If the continued listing of the participating company on the Compact’s website is considered to be detrimental to the reputation and integrity of the initiative, the Global Compact Office can delist the company. This is what happened to Lifosa.

 

WSRW is very satisfied with the steps taken by the Global Compact. According to Erik Hagen, one of WSRW's representatives in Norway, the Global Compact "deserves to be praised for actually expelling a member that does not communicate". We certainly hope that this case will set a precedent.

© Photo by Steven Depolo.