Seeking prosperity in a disunited world

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Posted in: Policy & Research, Sustainable Development

Seeking prosperity in a disunited world

February 01, 2000

Riots in Seattle, protests in Davos, discord between developed and developing worlds: can companies counter growing opposition to globalisation by endorsing the UN’s Global Compact?

Taking forward the Global Compact

The International Chambers of Commerce has endorsed the Global Compact between business, international agencies and citizens groups, first proposed by Kofi Annan, UN General Secretary, at the January 1999 World Economic Forum at Davos, to raise environmental and labour standards and promote human rights. The Compact covers nine principles of good practice, such as freedom of association and collective bargaining, effective abolition of child labour and a precautionary approach to environmental challenges. It is based on international agreements such as the UN Universal Declaration of Human Rights and the Declaration of the ILO

During this year’s Davos meeting, a new UN-run web site, described as “the world’s most comprehensive resource centre on corporate citizenship”, was launched by Novel CEO, Eric Schmidt, BP Amoco CEO, Sir John Browne, and ICFTU general secretary, Bill Jordan, among others. Also at Davos in January, the president of the ICC called on the UN to take a lead in setting a rules-based system of open international trade and investment. Contact ICC on 00 33 1 4953 2828 (http://www.iccwbo.org) and Georg Kell, UN Secretary General’s Office, on 00 1 212 963 1490 (http://www.unglobalcompact.org)

Globalisation as a developmental tool

The UK government is preparing a White Paper which will place the challenge of globalisation as the focus of on development policy. In preparation, a discussion paper published on January 26 argues that developing countries can reap the benefits of globalisation, but only if they receive help from the international community. Proposals for reform of the WTO, backing for a global investment agreement, the need for new environmental agreements and the spread of new technology all feature in the blueprint. Contact DFID Enquiries on 0845 300 4100 (http://www.dfid.gov.uk)

BT commits to responsible globalisation

The link between globalisation, diversity and sustainability was the focus of an ‘occasional paper’ published by BT in January . Variety and values: a sustainable response to globalisation? examines how globalisation both threatens biological and cultural diversity and provides unprecedented opportunities for peace and prosperity. Companies competing in global markets can lead the way in attempting to define and integrate the tools of globalisation and the process of sustainable development, the paper argues. If they do not, society may make global business difficult or even untenable.

As part of the publication, BT has formulated a statement, Commitment to Society, bringing together the diverse strands of the company’s social responsibility, community involvement and corporate accountability in a new framework for its activities around the world. Contact BT’s Corporate Reputation and Social Policy Unit on 020 7356 5651 (http://www.bt.com/world/society)

OECD tightens rules for multinationals

The OECD is undertaking the most thorough review of its Guidelines for Multinational Enterprises since their launch in 1976. These voluntary principles of good conduct for international companies have come to form the basis for national law in many countries, not just the 29 OECD members and the three other countries – Argentina, Brazil and Chile – which have adopted the existing guidelines. The new draft, issued for consultation on January 12, proposes tougher rules on corporate governance, workplace conditions, environmental safeguards, suppliers and subcontractors, bribery and protection for whistleblowers. Contact Nicholas Bray, OECD, on 00 33 1 45 24 80 90 (http://www.oecd.org/daf/investment/guidelines/newtext.htm)

International institutions promote business ethics

The World Bank and the World Business Council for Sustainable Development have launched a joint initiative to put business ethics at the heart of a new Internet-based educational project in the developing world. Announced at the Davos Summit on January 31, The Business Ethics and Corporate Responsibility programme aims to educate government officials and businesses worldwide about the experiences of 120 of the world’s leading companies. The effort will begin in Sarajevo in May with training for government and business leaders, academics and journalists from Southeast Europe. This forms part of a broader partnership between the two organisations to develop a common educational outreach programme on CSR and business ethics, delivered through the WBCSD’s Virtual University, a consortium involving major corporations and academic institutions. Contact Djordjija Petkoski, World Bank, on 00 1 202 473 7226 (http://www.worldbank.org)

Global policy networks

The Washington-based Global Public Policy Project has released a report describing how policy networks involving companies, government agencies and the NGO sector can successfully coordinate action on intractable global problems. Around 50 such global partnerships exist, such as the Roll Back Malaria project and the Global Water Partnership. Part funded by Hoechst Foundation and the Rockefeller Foundation, GPP is one of the bodies responsible for taking forward the UN Vision Project to address world issues and the UN’s response to them. Contact GPP on 00 1 202 291 7521 (http://www.globalpublicpolicy.net)

Partnership aims to eliminate Elephantisis

The UK government has joined with SmithKline Beecham and Merck in a growing global alliance to eliminate Lymphatic Filariasis, commonly called Elephantisis. Two years ago SB pledged to donate the necessary supplies of its drug, Albendazole, over 20 years to fight the disease which affects 120 million, mostly poor, people in 80 countries. On January 20, the Department for International Development promised £3 million to fund a specialist centre at the Liverpool School of Tropical Medicine with SmithKline Beecham also contributing towards its costs. Complementary drugs are also being donated by Merck to control the disease in Africa. Contact Pamela Duncan, SB, on 020 8975 2798 (http://www.sb.com/company/community/lymfilar.htm)

Comment

Globalisation is fast becoming a catch-phrase like community – so often used that it loses its meaning and with it, the power to define the issue. So let’s try to see what is at stake here. UNCTAD, the United Nations Conference on Trade and Development, reported during February that foreign direct investment grew 25% during 1999, to reach $827 billion. Nearly three quarters of this goes to developing countries, dwarfing official aid flows. The powerful increase in 1999 itself followed 40% growth the previous year. More staggering is the fact that the UK is now the largest outward investor, surpassing even the US.

Long gone are the days when international trade essentially operated between discrete national economies, with national governments setting the rules and players sharing a common set of national norms and values. In its place has yet to arise a coherent rules-based system of the sort the ICC is calling for, with common principles and values articulated through the UN and other international agencies. This is urgency needed and a good start has been made. Global economic anarchy is not in companies’ interest. Business needs stability to plan and invest. Free trade needs free societies at peace with themselves if it is to prosper. Firms trying to be socially responsible need a level playing field for labour and environmental standards so they are not undercut.

Formerly ‘national’ companies like BT and CEOs with vision like Sir John Browne are not afraid to get involved in these issues. At the macro-level, they and more like them should engage in vigorous debate, not just with governments and international agencies, but with wider civil society through the media and in dialogue with NGOs. Their message should be that global capitalism can be responsible and a force for sustainability, not destruction, in a fragile world. At a micro level, in the countries and communities where they operate around the world, they need to run their businesses and invest in local communities in ways which demonstrate the truth of their message. For so long as a credibility gap continues, global corporations will be distrusted, and their prosperity hindered.

Corporate Citizenship Briefing, issue no: 50 – February, 2000

COMMENT:

Globalisation is fast becoming a catch-phrase like community – so often used that it loses its meaning and with it, the power to define the issue.

Globalisation is fast becoming a catch-phrase like community – so often used that it loses its meaning and with it, the power to define the issue. So let’s try to see what is at stake here. UNCTAD, the United Nations Conference on Trade and Development, reported during February that foreign direct investment grew 25% during 1999, to reach $827 billion. Nearly three quarters of this goes to developing countries, dwarfing official aid flows. The powerful increase in 1999 itself followed 40% growth the previous year. More staggering is the fact that the UK is now the largest outward investor, surpassing even the US.

Long gone are the days when international trade essentially operated between discrete national economies, with national governments setting the rules and players sharing a common set of national norms and values. In its place has yet to arise a coherent rules-based system of the sort the ICC is calling for, with common principles and values articulated through the UN and other international agencies. This is urgency needed and a good start has been made. Global economic anarchy is not in companies’ interest. Business needs stability to plan and invest. Free trade needs free societies at peace with themselves if it is to prosper. Firms trying to be socially responsible need a level playing field for labour and environmental standards so they are not undercut.

Formerly ‘national’ companies like BT and CEOs with vision like Sir John Browne are not afraid to get involved in these issues. At the macro-level, they and more like them should engage in vigorous debate, not just with governments and international agencies, but with wider civil society through the media and in dialogue with NGOs. Their message should be that global capitalism can be responsible and a force for sustainability, not destruction, in a fragile world. At a micro level, in the countries and communities where they operate around the world, they need to run their businesses and invest in local communities in ways which demonstrate the truth of their message. For so long as a credibility gap continues, global corporations will be distrusted, and their prosperity hindered.

Corporate Citizenship Briefing, issue no: 50 – February, 2000

COMMENTS