Global Compact

The Global Compact is the idea of United Nations Secretary-General Kofi Annan and was initiated in response to widespread concerns about the impact of corporate practices on human, environmental, and labor standards. It was also intended to divert attention away from organizations like the World Trade Organization (WTO) that had become targets for the antiglobalization movement. The compact brings business, labor, and civil society together in a network of open, and Internet-facilitated, dialogue. At the core of the network are the Global Compact Office, the Advisory Council, the UN Environment Programme (UNEP), the International Labour Organization (ILO), the UN High Commissioner for Human Rights, the UN Development Program (UNDP), and the UN Industrial Development Organization (UNIDO).

The compact was announced at the January 1999 annual meeting of the World Economic Forum (WEF) and launched on July 26, 2000, by a UN high-level meeting, with the aim of promoting “good” corporate practices among the global business community through the voluntary adherence of firms to nine (later ten) principles drawn from three (later four) key international texts: the 1992 Rio Declaration on Environment and Development; the 1948 Universal Declaration of Human Rights; and the ILO's 1998 Fundamental Principles on Rights at Work. The tenth principle and fourth key text (the UN Convention Against Corruption) were added in June 2004.

These principles require that corporations support and respect the protection of international human rights within their sphere of influence, make sure they are not complicit in human rights abuses, uphold freedom of association and the effective recognition of the right to collective bargaining, support the elimination of all forms of forced and compulsory labor, promote the effective abolition of child labor, uphold the elimination of discrimination in respect of employment and occupation, support a precautionary approach to environmental challenges, undertake initiatives to promote greater environmental responsibility, encourage the development and diffusion of environmentally friendly technologies, and work against corruption in all its forms including extortion and bribery.

The compact is not, however, an enforceable commitment to good corporate practice, nor is it a code of conduct with monitoring or verification procedures; rather, it relies on public accountability, transparency, and enlightened self-interest to fulfill its aims. The idea is that participating corporations post information about their activities on the compact Web site (http://www.unglobalcompact.org). This information is then open to scrutiny by other participants.

By the end of 2004, corporate signatories to the compact numbered more than 1,700 and included BP, Danone, Deloitte Touche, GAP, HSBC, ICI, Nestlé, Nike, and Tata. The number of labor and civil-society participants has not, however, matched the enthusiasm with which the compact has been greeted in corporate quarters. Only a small number of these [Page 344]organizations have signed up, reflecting some of the skepticism in civil society quarters about the compact's abilities to temper corporate malpractice.