Irene Khan on the Global Compact

This from an address by Amnesty International Secretary-General Irene Khan at the Opening Plenary of the Global Compact Leadership Summit 2007, in which she suggests ways of improving the Global Compact:

The Global Compact needs to find ways to hold participants accountable for upholding its principles. The delisting process that has come into operation recently is a step towards integrity -- but it is based largely on technical and procedural grounds, and is not being applied to ensure substantive compliance. Experience shows that voluntary approaches that incorporate compliance elements have much greater public credibility than those that are simply exhortations.

As a peer learning forum, all Compact members have an obligation to push each other to higher levels of performance. Amnesty International would encourage participants to consider a robust peer-review mechanism. The best performing companies can help to raise the bar by holding each other to account. It is time to scale up on compliance.

The UN is a valuable brand, and both the UN and companies has a responsibility to make ensure that there are no free-riders in the Compact.

The Global Compact is a voluntary initiative. Voluntary approaches are important, but no matter how good they are, they have some inherent limitations by their nature of being voluntary: by definition they involve an "opt-in" approach (and therefore the possibility also of "opting-out" by companies). They do not -- and cannot -- deal with the so-called "laggard" companies, who will not join.

Looking at it from the perspective of human rights, voluntary initiatives have a limitation -- they offer some protection, for some human rights, for some people. This is problematic because human rights, by their very nature, are universal guarantees -- they apply to all people, in every part of the world at all times.

This is why Amnesty International, while supporting voluntary initiatives, is pressing for UN global standards on business and human rights that will apply across borders to all companies, whether they operate in China or Canada, Malawi or Switzerland. Such global standards will provide governments with clear, common guidelines on how to address corporate behaviour on human rights. It will help to create a level playing field, set some common expectations, and build trust among customers, shareholders, investors and the community.

Governments have the primary responsibility for human rights -- and global standards on corporate responsibility for human rights will also help clarify and strengthen their responsibilities towards companies and towards people.

That is why Amnesty International hopes that while the Compact itself is a voluntary initiative, the Compact as such and its members as individual companies will support binding global standards and contribute to their development in the United Nations.

Unfortunately, the final declaration falls far short of expectations, according the International Federation of Human Rights:

The declaration adopted by participants is supposed to establish a roadmap for the future of the initiative and deepen their commitment. In fact, the commitments of corporations remain extremely weak. Businesses merely commit “to advance the implementation of the UN Global Compact and its ten principles” and to “give concrete meaning to a principle-based approach in (their) strategy, operations and culture”, and to seek to mobilise business units, and business partners to commit to the UN Global Compact its 10 principles.

The most important commitment taken by corporations is to report on their activities through annual communications on progress on their environmental and social performances. This demand had been made previously by the Global Compact. Companies that have not reported on their practices, two years after joining the Global compact and every year thereafter have now been listed as “non-communicating”. For the first time this year, the Annual Review of the Global Compact provided an insight into the actions of business participants to implement the ten principles. These are important first steps, but they remain largely insufficient.

Indeed, after 7 years, no mechanism has been set up within the Global Compact to monitor the commitments made by corporations. As a result, corporations that directly violate or are complicit of violations of human rights, labour, anti-corruption and environmental standards would still remain members of the initiative, and publicly benefit from this adherence.

FIDH hopes that UN Secretary General’s warning will be heard and that the activities of corporate participants to the Global Compact will be seriously monitored, and that members found not complying with the principles will- at a minimum - be excluded from the initiative.

(hyperlink added by this blog author).