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U.N. Chief Warns Big Business to Play by Ethical Rules

Thalif Deen

UNITED NATIONS, Jun 25 2010 (IPS) - The United Nations is sending a strong message to the world’s corporate sector: abide by the rules of social and ethical conduct or risk being politically ostracised.

Speaking at a two-day summit meeting of over 1,200 business executives, which concluded Friday, U.N. Secretary-General Ban Ki-moon warned that businesses must move away from their devotion to short-term profits and adhere to corporate social responsibility (CSR).

Over the past two years, he said, the United Nations has “de-listed” over 1,300 companies for failing to communicate progress in implementing 10 ethical principles that corporations are expected to honour when they join the U.N’s Global Compact.

“The compact may be a voluntary initiative, but that doesn’t mean we lack teeth in policing it,” he told the summit meeting, described as one of the world’s biggest gatherings of business executives under one roof.

The 10 U.N. values and principles cover issues relating to human rights, labour regulations, environmental standards and anti-corruption measures.

The participants in the U.N.’s Global Compact initiative stand at over 8,000. But the secretary-general said the United Nations has set a new ambitious target: 20,000 participants by 2020.

He also said the world body has identified 15 new partnership opportunities – “15 ways to move us towards the U.N.’s Millennium Development Goals (MDGs).”

These wide ranging goals cover reductions in poverty and hunger; fighting disease; green energy; and protecting girls from violence.

“Let us remember,” he said, “investments in the developing world are investments in growth everywhere.”

Georg Kell, executive director of the Global Compact Office, admitted that while corporate responsibility continues to be high on the business agenda, many companies have nevertheless failed to implement key policies on human rights and anti-corruption.

A worldwide survey of corporate practices, conducted by the Global Compact Office, has revealed much progress, he said, but also has serious gaps in corporate efforts to advance corporate responsibility.

“The financial crisis and subsequent economic downturn appeared not to have slowed down efforts to advance responsible business conduct, yet global challenges like corruption or human rights remain neglected,” said Kell.

“This is something we have long known, but the survey puts the spotlight on it and shows where the bottlenecks are,” he added.

A total of 1,044 businesses in 97 countries, representing nearly 20 percent of all of the Global Compact’s participants last year, took part in the survey.

He said while a majority of companies reported implementing key labour and environment policies, only 31 percent had done the same for human rights and 32 percent for corruption.

Responding to questions, Kell said the Global Compact had embraced the World Health Organisation’s (WHO) framework agreement and, therefore, discouraged tobacco companies from joining. But the Compact had no legal basis to keep them out because they were legally tax-paying corporations established by member states.

“The Global Compact had a policy not to accept primarily the contributions from tobacco companies, and similar companies whose policies or practices were at variance with the Compact’s aims,” he added.

Meanwhile, the U.N. children’s agency UNICEF called on corporate leaders to craft socially responsible policies to protect children and eliminate child labour in their factories and workplaces.

“Protecting children’s rights is a global responsibility that requires global commitments from us all, in every sector,” said UNICEF Executive Director Anthony Lake.

He said the ‘Children’s Principles of Business’, which is expected to be launched in 2011, will be based on the U.N. Convention on the Rights of the Child which spells out the basic human rights of children worldwide.

In a joint statement, the U.N. Development Fund for Women (UNIFEM), along with the Global Compact Office, called on business executives to eliminate gender discrimination in board rooms, markets and workplaces.

Over 40 chief executive officers (CEOs) became the first group of business leaders to endorse the ‘CEO statement of support for the Women’s Empowerment Principles – Equality Means Business’.

UNIFEM Executive Director Ines Alberdi said that those initial signers are “practicing the very first women’s empowerment principle that leadership promotes gender equality”.

“These executives are affirming the high-level support necessary for women’s empowerment principles to gain traction in individual companies and their cultures,” Alberdi declared.

The two-day summit took place at a time when the United States faces one of its biggest environmental disasters triggered by BP, one of the world’s giants in the petroleum business.

Asked about the impact of the oil spill, the secretary- general told reporters Wednesday: “I think we need to learn the lessons from this oil spill, which would help businesses in all sectors to develop better policies and better procedures to address environmental risk.”

He said all the technological innovation available today comes with a certain risk.

“We must do all we can do to prevent, minimise, this kind of risk which comes from environmental tragedies. And we need to first of all translate into action all what we have established. That is what I am working hard (on), and I am very proud of what we have achieved,” he added.

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