United MacNations?

The UN's growing alliance with multinational corporations

by Danielle Knight

Dollars and Sense magazine, July / August 2000


Some strange bedfellows met up last May at Florida's Walt Disney World Resort. The United Nations Educational, Scientific, and Cultural Organization (UNESCO) teamed up with Disney and McDonald's to present the "Millennium Dreamer" prize- touted as the "most prestigious" youth award of its kind-to 2,000 young people worldwide who have made a "significant and positive impact on their communities."

Prize winners probably didn't include children who wrote letters to Disney as part of a campaign against deplorable labor conditions at the multinational's subcontractors in Haiti, Indonesia, and China. And it's doubtful that any one of the "Millennium Dreamers" attempted to "make a difference" by protesting against the World Trade Organization last year outside a Seattle McDonald's.

Some human-rights and environmental activists worry that the youth prizes are symbolic of a fundamental shift taking place at the United Nations-towards "new partnerships" between the institution and multinational corporations. From Malaysia to Zimbabwe, non-governmental organizations say that UN agencies have fallen into alliances that boost the public images of huge international companies, while threatening UN efforts on human rights, labor standards, health, and ecological protection.

Many United Nations agencies could act as counterbalances to growing corporate dominance. The International Labor Organization (ILO) formulates international labor standards. It supports freedom of association, the right to organize and bargain collectively, the abolition of forced labor, and equality of opportunity and treatment. The United Nations Development Programme (UNDP) proclaims the goals of "employment creation and sustainable livelihoods, the empowerment of women and the protection and regeneration of the environment, giving first priority to poverty eradication." UNESCO has, through its World Heritage Sites program, helped protect threatened natural parks and historical sites. In Australia, aboriginal-rights activists have used the World Heritage Site status of Kakadu Park to pressure for the expulsion of uranium mining companies from the area. Finally, the UN once included a special body, the Center on Transnational Corporations, to monitor global companies' environmental and social impact. It was created in the 1970s at the behest of developing nations. While it was never very radical, its efforts were still seen as a potential threat to the ideology of corporate self-regulation. It was shut down in the early 1990s, reportedly due to business pressure.

According to environmental and human-rights groups, the critical role of such agencies is threatened by the UN's new emphasis on corporate "partnerships." Last year, Secretary-General Kofi Annan set the stage for the new orientation by calling on CEOs to join a "Global Compact" with the UN. He challenged business leaders to enact nine principles derived from UN agreements on labor standards, human rights, and environmental protection. "What we have to do is find away of embedding the global market in a network of shared values," Annan said at the World Economic Forum, an annual meeting of finance ministers and CEOs, in January 1999. The Secretary-General said the UN High Commissioner for Human Rights, the ILO, and the UN Environment Programme (UNEP) "stand ready to assist" corporations that wish to incorporate these principles into their missions and company practices. He reiterated the plea in a speech before the U.S. Chamber of Commerce in June 1999: "A fundamental shift has occurred in recent years in the attitude of the United Nations towards the private sector. Confrontation has taken a back seat to cooperation. Polemics have given way to partnerships."

Human-rights groups can hardly complain about UN efforts to get companies to act more responsibly. But Joshua Karliner, director of the Transnational Resource Action Center, a San Francisco-based corporate watchdog organization, says that while corporations gain a valuable public-image boost by wrapping themselves in the UN flag, they make no commitments to adjust their behavior to reflect the institution's principles. "The quid pro quo of this overarching UN policy is that if corporations voluntarily accept these human rights, labor and environmental standards, the UN will... increase its support for their globalization agenda," says Karliner. "And there is a huge contradiction there, because in fact the globalization agenda is what is driving the exacerbation of a lot of these problems."


Facing a funding crisis as billions of dollars in back dues remain unpaid-largely by the United States-the UN has tried to attract financial support from the private sector. In his speech to the Chamber of Commerce, Annan asked business leaders to lobby Congress to pay the dues. But the UN is not only asking for corporate help to restore government funding. It is also seeking direct corporate aid on an unprecedented scale.

Last year, the UNDP invited major companies to contribute $50,000 to its Global Sustainable Development Facility (GSDF). At the time, then-UNDP Administrator James Gustave Speth argued that the project would channel corporate money to sustainable-development initiatives worldwide. "This global initiative is central to our effort to engage in the corporate sector," he wrote. The GSDF is now headed by a steering committee that includes Asea Brown Boveri (the Swiss-Swedish firm targeted by environmental groups for its involvement in China's controversial Three Gorges Dam) and Dow Chemical (a producer of toxic substances including dioxins).

According to the UNDP, 16 corporations had formally committed to the GSDF project by February 1999. Four other companies were considering the proposal. Royal Dutch Shell, notorious for its links to a brutal military dictatorship in Nigeria, was one of them. The UNDP also invited oil giant BP Amoco, criticized by Greenpeace for its drilling projects in the Arctic and its efforts to open up the Arctic National Wildlife Refuge in Alaska to oil exploration. Nine experts on economic development-including Karliner, Walden Bello of Thailand's Focus on the Global South, and Mohammed Idris of the Malaysia-based Third World Network-wrote Speth asking him to call off the project. They warned that the companies were using the GSDF as an opportunity to "greenwash" their public images. As word got out about the GSDF, officials within the United Nations also voiced concern. In an April 1999 speech, UN Children's Fund (UNICEF) Executive Director Carol Bellamy urged caution in dealings with big business. "It is dangerous to assume that the goals of the private sector are somehow synonymous with those of the United Nations," she argued, "because they most emphatically are not."

As a result of the controversy, the GSDF is now on the back burner, according to Sid Kane, a spokesperson at the UNDP. Meanwhile, however, UN-corporate allegiances have popped up at other UN agencies.


The UN has a special agency, the Business Humanitarian Forum (BHF), to encourage dialogue between relief organizations and corporations, and to gain business support for humanitarian projects. UN High Commissioner for Refugees (UNHCR) Sadako Ogata and Union Oil of California (UNOCAL) Vice Chairman John Imle co-chair the BHF. The Forum includes energy giant Enron, which has been linked to human-rights violations in India, and the presidents of CARE and Interaction, two major humanitarian aid agencies.

EarthRights International and the Free Burma Coalition are two of the NGOs asking how the UNHCR, of all UN agencies, could join hands with UNOCAL. The oil company does profitable business in Burma, whose military dictatorship has sent a wave of refugees to neighboring Thailand, according to rights groups. "How ironic and disturbing that UNHCR would associate with a company whose behavior is so antithetical to the mission of helping refugees," said a statement released by the groups outside the last conference of the BHF, held in Washington, D.C., in November.

Human-rights activists regard UNOCAL as a pariah company for its Yadana gas pipeline project, built with the aid of Burma's military junta, and for its now-suspended efforts to conclude gas deals with Afghanistan's Taliban regime. Ka Hsaw Wa, an award-winning Burmese activist who now directs EarthRights International, has documented thousands of cases of forced labor, execution, rape, and confiscation of property carried out by the Burmese military in support of the Yadana project, operated by a consortium including UNOCAL and the French company Total. The consortium has contracted with the Burmese army to provide security for the project. "It's discouraging to find respected UN agencies sharing the podium with companies like UNOCAL," Ka Hsaw Wa says, "especially to those of us who are fighting everyday against their human-rights abuses."

Last October, EarthRights International and the Free Burma Coalition wrote to High Commissioner Ogata asking her to resign from the Forum. But the UN agency argued that the private sector has a major role to play in post-conflict reconstruction. "In this era of globalization, humanitarian issues cannot be addressed in a vacuum," said UNHCR spokesman John Horekins. "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."


At this year's World Economic Forum in Davos, Switzerland-one year after Annan announced the Global Compact-an international coalition of non-governmental organizations proposed a "Citizens Compact." Signatories include the Third World Network, Washington's Institute for Policy Studies, Zimbabwe's International South Group Network, India's International Group for Grassroots Initiatives, and John Sellers of the Ruckus Society, which organized protests against the World Trade Organization in Seattle last year. The alternative compact outlines nine principles aiming to "safeguard the image, mission and credibility of the United Nations as it deals with the private sector." While the UN should help companies improve their human rights and environmental records, the Citizens Compact states, this should not be seen as a "partnership." Before working with a corporation, the UN should "thoroughly evaluate whether the objectives of that company are compatible with those of the United Nations." The UN should not "endorse or promote products or brand names of any private corporation."

Perhaps most importantly, corporations should not govern themselves though "voluntary and self-generated standards," as Annan's Global Compact would permit. Instead, as the Citizens Compact argues, "A legal framework, including monitoring, must be developed to govern their behavior on the world stage." The more the United Nations aligns itself with the private sector, the less it is going to be able to act as a countervailing force to the corporate-driven globalization agenda, say the signers. Public opposition to corporate-dominated globalization is on the increase. The United Nations, argues Kenny Bruno of the California-based Transnational Resource and Action Center (TRAC), could provide the framework of global governance necessary to hold today's globetrotting corporations in check. "The United Nations is our best hope to monitor and hold accountable the giant companies that control so much of our economies and our lives," he says. If that vision is to become a reality, however, opponents of corporate globalization must put the brakes on the UN's "new partnership" with these same corporations-and fast.


Danielle Knight is a journalist in Washington, D.C., for Inter Press Service, an international newswire.

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