Has the UN Global Compact succeeded? What if it is failing?

logo_UN_Global_Compact - Copy

After an introduction to the United Nations Global Compact (UN GC) in 2013 at the UN school of Multilateral Diplomacy, I became a fan of the United Nations and was impressed by the idea of having a Corporate Social Responsibility (CSR) program on a global scale. As an advocate for environmental sustainability and human rights, this new concept gave me hope that current labour standards and measures for environmental protection will become more effective. A year later, during my investigative research on the UN GC performance and progress, I learned that the Compact works only in the theory; the reality is far less enchanting. Kofi Annan, the former UN Secretary- General at that time, believed that the role of the UN is no longer only to save mankind from the scourge of war and arbitrate the legal equality among nations, but also improve the human condition by being a bridge between private and public interests. Thus, his initiative, the idea to advance ‘social rules’ on a large-scale was first introduced at the 1995 World Summit for Social Development. Five years later the UN GC began its first practice. Among the first targeted countries were India, Bangladesh and China. Instituting the principles to guide private businesses with behavioral compliance, the Compact committed to support the UN Millennium Goals towards a more sustainable development and global economy by making the business sector a vital stakeholder agent of this initiative.

 

Although I am a wholehearted supporter of Kofi Annan’s initiatives, I doubt that the Compact had and will have the same progress as it promoted in its annual report releases. It was successful in attracting worldwide attention to neglected issues concerning human rights and environment, but failed to demonstrate any effectiveness in solving those issues. The Asia-Pacific region, one of the primary core targets of the UN, has been practicing GC since 2009; in spite of this, there are little or no improvements in labor standards and environmental sustainability. China, one of the largest, fastest and most sophisticated manufacturing systems on earth still remains the top polluting country in the world and largest violator of the labor laws and standards. Its country’s global textile and technology manufacturers such as H&M, Zara, Apple and Samsung continue to find ways to increase production and profits. The singular focus of a meticulous reduction of their expenses resulted in a failure to provide safe and adequate production facilities. A recent scandal over an explosion at Foxconn, the nation’s largest factory employer, killed four people and injured 18 as a direct result of the company’s failure to maintain safe working conditions. Similar situations have occurred in Bangladesh: the 2012 Dhaka fire in the Tazreen Fashion factory and the 2013 Rana Plaza collapse were both due to non compliance of safety standards and resulted in the deaths of more than 1,200 people. Other violations such as discrimination of minorities, child labor, and sexual abuses against women are a norm in many parts of the developing world. However, all these corporations are continuing to claim progress in their Corporation Progress Reports (CPOs). But how can we be sure that CPOs are valid if they are ‘verified’ and ‘assured’ by corporations themselves and there is no verification form a third party? Should we even expect that companies who join the initiative are going to comply with a voluntary program that has no transparency and sanctions? Does it seem fair to impose the same requirements to corporations in both the developing and developed world? While the guideline of the Compact was structured borrowing authoritative intergovernmental instruments such as the Universal Declaration on Human Rights, and the ILO Declaration on the Fundamental Rights at work; the Compact itself doesn’t have the same authoritative status. With less obligations for participating firms, lack of third-party monitors, and rarely imposed sanctions, the program design makes shirking by participant firms likely. I do not believe that the GC has any real chances of ‘full’ and honest integration in the near future, especially in countries where human rights and slave labour are most prevalent. The 2014 Human Rights Watch annual report showed that a majority of brands have not lived up to these responsibilities due to poor supply chain transparency, the absence of whistleblower protections, and failure to assist factories in correcting problems. Some brands remain non-transparent about their policies and practices, withholding information on issues of concern. All of this stresses the need for greater public scrutiny and a commitment to improved policies that are not only enforced by companies but also by multilateral stakeholders such as government, local community and civil society organizations (CSOs). As the report indicated, the governments in Bangladesh and India have made almost no efforts or progress in meeting the terms of the Compact and have abdicated any responsibility in ensuring compliance with international human rights law. Despite a handful of companies making significant efforts to comply with the Compact’s principles, the impact of those regulations are insignificant. With an external pressure by both – local authorities and CSOs, the implementation of these policies could be accelerated. However, such a multilateral approach is poses a real challenge since the gap and mutual distrust between the two groups is still a key challenge for the GC’s full integration in developing countries. To achieve legitimacy and accountability of the CSR in global scale, an attitudinal change is necessary to facilitate actions at a local level to correspond with the actual needs. In other words, the UN must change its implementation strategies. Instead of acting unilaterally, it should seek engagement with local governments who have much greater legal and legitimate means to stop corporations from intimidating and threatening their workers. As well as strengthening and empowering CSOs who presently lack any authority to influence local governance could serve an additional instrument for the effective GC. Another tailored approach that should be considered for the UN GC is to find a way to redesign the GC into more reciprocal and less complex guideline which will be adjusted based on available resources and needs in developed and developing world. In countries such as India where human rights and labour abuses are rampant, enforcement of strong CSR would bring colossal improvements. The obstacle is that the workforce in most of these countries involve non-formal jobs not embraced by the UN GC or other CSRs. In India only 5% of the population is employed on a formal basis; the remaining 94 % of the population work in unorganized sectors. Lastly, the UN should redesign CPOs changing both how it measures social performances and obtains the data.

 

Albert Einstein said, “Not everything that counts can be counted.” Similarly, social issues can’t be easily measured by financial indicators. Thus, the progress measurement should shift from qualitative analysis. The credibility and transparency of companies’ reports can be improved by involving external parties such as trade unions and NGOs who would evaluate the validity of CPOs. Consequently, without taking into consideration such nuances, the idea of CSR, as well as the role of UN GC are worthless. Moreover, many objectives of the UN GC seem to be too complex and ambiguous for the developing world. Although the UN GC was highly welcomed by Indian companies, they admitted the challenge of keeping up with complex responsibilities which did not correspond with their capacity. Despite the GC’s ambitious goal in uniting labor and corporate leaders, such an agenda is unattainable. Until the appropriate adjustments are tailored to each country and the United Nations change its current strategies of implementation, the UN GC will continue to face many challenges.


Renata wrote this op-ed as part of her participation in the United Nations Summer Study (UNSS).  For more information, please visit http://www.newschool.edu/united-nations-summer-study/ or write to UNstudy@newschool.edu.

Leave a Reply

Your email address will not be published. Required fields are marked *