Perilous Partnerships
The UN's Corporate Outreach Program
by Kenny Bruno
Multinational Monitor magazine, March 2000
Not long ago, UNICEF made its reputation in the United States
by sending children out trick-or-treating at Halloween with collection
boxes. Now the UN is increasingly going hat in hand to a new source:
the world's largest multinationals. With Secretary General Kofi
Annan calling for UN-corporate "partnerships," UN agencies
have entered into an array of partnerships with giant corporations,
including many that citizen movements have denounced for violations
of human and labor rights, environmental destruction and endangering
consumers. Among the UN's new partners: McDonald's, Disney, Chevron
and Unocal.
Largely for these reasons, as well as a concern that the partnerships
will undermine the UN's ability to serve as a counterbalance to
global corporate power, citizen groups around the world are increasingly
challenging the new partnership arrangements. They are calling
on the UN to pull back from the partnerships and, at a minimum,
set clear guidelines for any cooperative ventures with business
enterprises.
THE UN GOES TO MARKET
Fueling the partnership initiatives is a new business-friendly
ideology at the UN and, perhaps more importantly, a desire to
curry favor with the United States, the UN's largest funder. All
UN officials are keenly aware that support from the United States
is predicated upon a friendly stance toward business. U.S. business
pressure led to the closure of the
UN's Center on Transnational Corporations (CTC) in the early
1990s. And the U.S. practice of withholding dues from the UN has
cast a shadow over its budget and jeopardized its operations.
While the corporate partners say they have charitable impulses,
they are relatively open about their other motivations: to improve
their image and expand into new markets.
Non-governmental groups first became alarmed about the UN
partnerships a year ago, when Ward Morehouse of the New York City-based
Center for International and Public Affairs obtained an internal
memo from the United Nations Development Program (UNDP) detailing
plans for a UN-private sector partnership called the Global Sustainable
Development Facility (GSDF).
Among the GSDF corporate partners were: Rio Tinto Zinc, a
British mining company with a record of environment and human
rights and development abuses from Namibia to New Zealand; Dow
Chemical, the world's largest producer of chlorine, the root source
of dioxin, and one of the largest pesticide companies; and Asea
Brown and Bovari, a leader in promoting a "corporate environmentalist"
image since the Earth Summit in 1992, but also one of the main
suppliers for the controversial Three Gorges Dam in China, which
is projected to displace nearly two million people from their
homes.
Morehouse and other critics charged that partnerships with
these companies violated the UNDP's own guidelines for "Mobilization
of Resources from the Private Sector." In those guidelines,
UNDP officers are required to consider if a corporation's activities
are "ethically, socially or politically l controversial or
of such a nature that involvement with UNDP cannot be credibly
justified to the general public."
An even more profound problem with the GSDF, critics said,
was its basic concept. The GSDF's awkward slogan was 2B2M 2020,
or "providing market access to two billion people by the
year 2020." The program's goal was to direct private sector
money into development projects that would serve the poor.
But as Roberto Bissio of Uruguay's Third World Institute told
then-UNDP Chief Gus Speth, "The concept that giant corporations
are relevant for the development of the poor goes against the
good work the UNDP itself has done on the root causes and solutions
to poverty." The two billion poorest people in the world
are precisely those of least interest to the global corporations,
Bissio argued. Their interests are much more likely to be served
by fostering small and medium enterprises, micro-credit programs
and other smaller scale initiatives, says Bissio.
When the citizen groups learned about the GSDF in March 1999
, about 15 companies had already contributed $50,000 each to get
the process going, but technically the GSDF did not yet exist.
After representatives of the groups met with Speth in May, the
project went into the "deep freezer," according to one
UN official. In August, the new UNDP Administrator, Mark Malloch-Brown
wrote to GSDF critics that the agency was carrying out "an
assessment of our key partnerships-an area to which I assign the
highest priority." The GSDF seemed to be on indefinite hold.
But since then, the UNDP has gone public with some of its
other private sector partnerships. On December 10, International
Human Rights Day, the New York Times painted a glowing picture
of how "big companies' strategic partnerships [with UNDP]
open doors in developing countries." Among the "success"
stories: a BP Amoco oil concession contract in Angola and Chevron's
contribution toward a UNDP-run business center which assists small
businesses in developing business plans, filling out loan applications
and developing entrepreneurial skills in Kazakhstan.
Prodded by Secretary General Kofi Annan, the UNDP is just
one of many UN agencies moving forward with the new partnerships.
Last year, at the World Economic Forum in Davos, Switzerland,
Annan challenged the world's elite business leaders to take up
a "Global Compact" with the UN.
The Compact challenges business to "do its part by demonstrating
good global citizenship wherever it operates." It sets out
nine principles derived from key labor, human rights and environmental
treaties for business to adopt. And the Compact states that three
key UN agencies -the UN Environment Program, the UN High Commission
on Human Rights and the International Labor Organization "stand
ready to work directly with corporations in advancing the Global
Compact." Yet there is no provision for monitoring or enforcement
in the Compact.
No company has yet signed on to the Global Compact, though
the International Chamber of Commerce has endorsed it.
Despite the slow progress of the Global Compact itself, other
UN agencies are moving ahead with private sector partnerships.
The Secretary General may not have complete control over these
partnerships, but they do have his blessing.
UN High Commissioner on Refugees Sadako Ogata has co-chaired,
with Unocal President John Imle, a meeting of the Business Humanitarian
Forum, a group founded and headed by a former Unocal vice president.
Unocal is a business partner with Burma's murderous military regime,
and human rights advocates charge Unocal's gas pipeline project
in Burma has generated thousands of refugees seeking to escape
the militarized pipeline area.
The UNHCR's position on sharing the podium with Unocal echoes
Unocal's argument for investing in Burma. In a letter to groups
objecting to the association with Unocal, UNHCR's Communications
Director John Horekens writes, "entering into a dialogue
with corporations, including the give and take of positive criticism
when required, will produce better results than reinforced positions
of mutual isolation. "
UNESCO, the UN's educational arm, is teaming up with Disney
and McDonald's to present "Millennium Dreamer" youth
awards this April at Disney World. It "should have crossed
UNESCO officials' minds that young people have more than enough
exposure to those two brands already," says Beth Handman,
a curriculum specialist in the New York City Public Schools. "It's
very important for kids to learn that commercial motivations and
educational values are two different things," says Handman.
The World Health Organization has aggressively sought corporate
partners among the pharmaceutical industry, especially those selling
nicotine-replacement products.
Health Action International, an international network of consumer
and public health organizations, has challenged WHO's partnerships
with drug companies and other corporations. "We believe there
is a fundamental difference between the core purpose of the WHO-which
is to serve the public interest-and the aim of pharmaceutical
companies, which is to maximize profits for their shareholders,"
HAI Europe Coordinator Bas van der Heide wrote in a May 1999 letter.
HAI expressed the greatest concern about WHO accepting secondments-staff
on loan-from the pharmaceutical industry. "We have deep doubts
about whether it will be possible to know if in the future when
communicating with WHO the WHO staff member is actually accountable
to a public organization or the international commercial sector."
WHO Secretary General Gro Harlem Brundtland, the former Norwegian
Prime Minister, responded in a June letter that, "In the
case of the secondment to the Tobacco Free Initiative, the company
had no interest in the area of smoking cessation, the person seconded
brings to the project a specific and needed expertise for a time
limited period, and the person is specifically excluded from involvement
in activities in which the company from which she is on secondment
could have any interest."
Brundtland denied the staff person might seek outside direction
from her drug company employer. "There are clear undertakings
on confidentiality, and on the person involved not seeking or
accepting instructions from anyone outside WHO, specifically the
company from which she is on secondment," Brundtland wrote.
In July, WHO drafted guidelines to regulate its interaction
with corporations, to help "avoid conflict of interest, real
or perceived."
But HAI says the guidelines fall short of addressing the problem.
"The main flaw of the draft guidelines is that they do not
give sufficient guidance for a serious evaluation of the activities
of potential and current commercial partners and therefore do
not substantially reduce the problem of conflicts of interest,"
according to van der Heide.
THE UN AS TROJAN HORSE
For the companies involved, the partnerships offer marketing
opportunities and political protection. "Companies know that
if they help the United Nations with its pet projects, it will
open doors and act as a valuable buffer between them and the governments
of countries in which they wish to operate," reports Claudia
H. Deutsch of the New York Times.
"Of course we want to eradicate neonatal tetanus,"
Gary M. Cohen of Becton Dickinson and Company, which manufacture
those devices told the New York Times. "But we also want
to stimulate the use of non-reusable injection devices."
"The companies are using the UNDP, with its good reputation
in the developing world, as a Trojan horse to gain access to markets,"
says Sanho Tree of the Institute for Policy Studies in Washington,
D.C.
Sometimes, the corporate motivation reflects even longer term
thinking than Becton Diekinson evidences. Chevron spokespersons,
for example, say the company is supporting the business center
in Kazakhstan as part of an effort to develop a market economy,
which in turn will provide the stability the oil giant needs to
operate safely.
A CITIZENS COMPACT
That the UN will have to interact with corporations is not
in doubt. How they will interact is the question.
The approach of the UNDP, UNESCO and UNHCR represents what
John Cavanagh of the Institute for Policy Studies calls the "low
road" of kowtowing to corporate interests.
Miloon Kothari, the UN representative of the South Africa-based
Habitat International Coalition, discerns a high road in the approach
of the UN Human Rights Commission's Sub-Commission on Protection
and Promotion of Minorities. The Sub-Commission has resolved to
examine the impacts of multinationals and global trade deals,
analyze possible liability of multinationals and look at mechanisms
for legal monitoring standards for multinationals, and has even
re-opened the idea of a Code of Conduct for multinationals based
on international standards.
Kothari is part of an alliance reaching out to Kofi Annan
and the UN. At the World Economic Forum in Davos last year, Kofi
Annan presented the Global Compact to business leaders. This year
in Davos, NGOs responded by presenting an alternative to the Global
Compact.
Called the "Citizens Compact on the UN and Corporations,"
it lays out nine principles that the UN should follow in its dealings
with private business. The first principle states that "multinational
corporations are too important for their conduct to be left to
voluntary and self-generated standards. A legal framework must
be developed to govern their behavior on the world stage."
The stakes in the UN corporate partnership initiative are
very high, as they involve the core values of the UN itself. At
issue, insist critics, is the primacy of human rights, health,
labor rights and environmental protection over markets and profits.
Many non-governmental organizations are offering Kofi Annan
and the UN their ongoing support for a stronger UN to counterbalance
the WTO and other global institutions perceived as commercially
biased.
But these UN supporters will not back down from insistence
that, as Ward Morehouse puts it, "the UN's job must be to
monitor and hold corporations accountable, not to give out special
favors."
Kenny Bruno is research associate at the Transnational Resource
and Action Center and one of the drafters of the Citizens Compact
on the UN and Corporations.
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