U.N. Launches a Program With Big Business

You can say the United Nations has just done it, Nike fashion.

In a partnership deal that is raising eyebrows, U. N. secretary-general Kofi Annan launched a program on Wednesday for corporations, including Nike Inc., to uphold human rights standards in countries where they operate.

Called the “Global Compact,” the program is a meeting of 44 multinational corporations, labor unions, human rights and conservation groups in an effort to stave off the backlash against globalization that grabbed international attention with the disturbances at the World Trade Organization conference in Seattle last year.

‘Remember Davos, Remember Seattle’

The concept was first floated in a January 1999 speech by Annan at the World Economic Forum, a weeklong annual meeting of elite business figures at Davos in the Swiss Alps.

He warned that market expansion and protection of private property was moving far faster than rules on social and environmental rights, thereby triggering a backlash against trade liberalization.

But it was Seattle that spurned him to action.

“The secretary general was concerned that the backlash against globalization had no direction. He was concerned about reactions that were opposed to openness, that were inward-oriented,” said Georg Kell, a senior officer at the executive office of the Secretary General.

Global Compact requires corporations to commit themselves to nine key principles embodied in U.N. treaties or risk a backlash from poor nations left out of globalization. These include ending sweatshop conditions, child labor, discrimination against minorities and developing environmentally friendly technologies. Once a year on a special U.N. Web site, they must publicize how they have succeeded in applying the U.N. principles of good international behavior.

‘Wrong’ Corporations

But skeptics wonder if it’s seemly for the United Nations to do business with big business. Some even call it a deal with the devil. Greenpeace, the international environmental organization, has denounced the plan, saying it could provide “abusive corporations with a prestigious platform from which they can ‘greenwash’ themselves.”

Or ‘bluewash’ as a coalition of human rights and environmental groups charge, referring to the blue and white colors of the United Nations. In a letter to the Secretary General, the coalition denounced the collaboration as “threatening the mission and integrity of the U.N.”

“We understand the United Nations has to use the services of the private sector and has to become more business friendly, but we believe the United Nations has signed up with the wrong corporations,” said Kenny Brown, U.N. Project Coordinator for the Transnational Resource and Action Center.

Some of the companies in the program have been criticized for their labor and human rights records. Nike Inc., for one, was harshly criticized in 1997 and 1998 for having its sporting goods made in Asian sweatshops. Royal Dutch/Shell has come under fire for its practices in Nigeria and Rio Tinto PLC, the giant mining group, has long been the target of environmental campaigns.

Other corporations include DaimlerChrysler AG, Unilever Plc Deutsche Bank AG, BP Amoco PlcNovartis AG LM Ericsson as well as companies in India, Pakistan, Norway, Mexico, South Africa, Denmark, Thailand and Peru.

“In the history of corporations’ reactions to human rights charges, corporations have always responded through public relations exercises and this is one of them,” said Brown. “We saw it after the Rio summit (in 1992) when companies tried to ‘greenwash’ themselves and now they’re attempting to ‘bluewash’ their image. This threatens the mission and integrity of the United Nations.”

To Enforce or Not to Enforce

Opponents claim the Global Compact provides corporations with an opportunity to align themselves with U.N. principles publicly while ensuring there is no enforcement on any the issues. The letter to Anan asks corporations to sign a vague statement that draws attention away from the need for more substantial action to hold corporations accountable for their behavior.

Although a partner in the Global Compact, Amnesty International has admitted that some kind of independent audit with public reporting would give the Global Compact credibility.

But enforcement is a hot water issue with corporations. Maria Livanos Cattaui, secretary-general of the influential International Chamber of Commerce, cautioned about turning the Global Compact into a monitoring or enforcement operation.

Kell acknowledges that it’s an uphill task, “At the United Nations, we bring together diverse partners. We’ve been negotiating for 18 months. Monitoring and standards-setting is the absolute authority of governments. We have no mandate to monitor corporations.”

Brown is pragmatic about the limitations facing the United Nations. “We understand the reality that the U.N. has to react with corporations. We understand the unspoken story that the organization is facing financial pressures and we firmly believe the U.S. must pay its dues to the U.N., but we need to build support for the U.N. to have a legal framework which will be binding on corporations.”

Too Little, Too Late

A number of labor and human rights groups within the program acknowledge that it’s too little, too late. “The voluntary code of the global contract is important as a first step but it is not enough,” said Kenneth Roth, executive director of Human Rights Watch.

Juan Somavia, head of the U.N. International Labor Organisation, challenged the executives to help find out who was employing 250 million children in sweatshops.

But Annan is hopeful. “We know that some of these companies may have made mistakes, may have done the wrong things,” he told reporters. “This does not mean that we should not encourage them and work with them in moving in the right direction. They are part of our reality.”

Reuters contributed to this report