The Global Compact: Challenges in Agenda Setting

Overview What is the Global Compact? How did the agenda setting come about? – Who supported the UNGC, and why? What challenges did the Compact overcome? – What issues does it still face?

The Global Compact: Overview Voluntary policy initiative: companies commit to be more responsible – Broad principles, not strict rules Proposed by Kofi Annan at the World Economic Forum on Jan – Adopted by General Assembly on July 26, 2000 Currently in force with over 7,000 companies No enforcement mechanism; relies on companies to comply with the UNGC principles

The Global Compact: Principles Human Rights – Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 1 – Principle 2: make sure that they are not complicit in human rights abuses. Principle 2: Labor Standards – Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 3 – Principle 4: the elimination of all forms of forced and compulsory labor; Principle 4 – Principle 5: the effective abolition of child labor; and Principle 5 – Principle 6: the elimination of discrimination in respect of employment and occupation. Principle 6 Environment – Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 7 – Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 8 – Principle 9: encourage the development and diffusion of environmentally friendly technologies. Principle 9 Anti-Corruption – Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Principle 10 Source: (Adapted from the UN Global Compact website,

Agenda Setting: Key Players UNGC is an excellent case study of agenda setting in a controversial, high-stakes setting Broad coalitions in favor of the Compact – Issue Framing: “A small step in the right direction.” Corporations The United Nations Some international NGOs Local NGO networks Groups challenging the Compact – Issue Framing: “The Global Compact is meaningless corporate eyewash backed by the UN.” Most NGOs Some state governments

Agenda Setting: UNGC Supporters The United Nations supported the UNGC because of: – Real commitment to human rights and sustainable, responsible business practices. The UN has no enforcement power, and having a voluntary commitment could win buy-in from the private sector but avoiding a “End Corporate Immunity” framing. – A way to recognize the limits on their own power and the changing role of the state in global power arrangements—especially in states where human rights abuses are a problem. – Opportunity to let the UN influence the corporate agenda, impossible to achieve with an adversarial framing. The UN was able to push for particular items to be on the UNGC, as Kofi Annan did with Corruption as the tenth principle. – Presence of a norm-creation effect, and some pressure for companies to comply with the principles, because non-compliances causes companies to lose face – Increased political and financial support from corporations "The United Nations once dealt only with Governments. By now we know that peace and prosperity cannot be achieved without partnerships involving Governments, international organizations, the business community and civil society. In today's world, we depend on each other.“ – Kofi Annan, December 2000

Agenda Setting: UNGC Supporters The Corporate Community supported the UNGC because it is: – Voluntary, and has no enforcement, so can make a company look good for relatively little effort. There are no binding standards. – An opportunity access to the human rights and UN agenda as they pertain to corporate behavior, and so they have some control over what standards are set, and how the UN treats them in its resolutions, statements, etc. – A way to partner with the UN, offering corporations the same access as NGOs, which levels the interaction and advocacy networks. – A way to gain public support and build the moral of their customers and staff. This is a way for companies to make a commitment to human rights and social responsibility and still look like the good guys, rather than getting punished in some court process or looking as though they caved to NGO pressure. – A framework in which to improve their performance; it limits and defines what their responsibilities are as compared to those of the state and other actors.

Agenda Setting: UNGC Supporters Some of the NGOs supported the UNGC because: – The Global Compact is a good way to pressure companies into human rights commitment, however tenuous – Joining the UNGC gives NGOs a point of access to companies and their social responsibility priorities. – Additionally, working with corporations and advising them on how to follow the Compact gives NGOs an opportunity to expand their programming and reputation. Greater opportunity for UN support when most NGOs opposed the Compact in the first place

Agenda Setting: UNGC Supporters Some of the local NGO networks supported the UNGC because: – These networks are often bodies that help frame the Compact in local contexts and help corporations carry out work on the ground. – The UNGC was a chance for local groups to have a say in what corporations are doing and to grow as they gain reputation and work from implementation. – UNGC’s local adaptations allow local networks to advocate for solutions that are important in their own contexts.

Agenda Setting: UNGC Opponents Many major NGOs opposed the UNGC because: – The Compact was too vague to be useful; it allowed corporations to look good while doing nothing for development – The UNGC was seen as corporations taking the UN and twisting its institutions to their own goals – The agenda was not sufficiently comprehensive to actually give meaning to the 10 principles Firstly why the Secretary-General has "not at any stage of developing this covenant consulted with the many public interest groups involved in campaigns against corporate power abuse around the world?" But secondly, "why business should not simply be forced to follow mandatory international standards for corporate behaviour"? Has the UN been bought off in some unstated way? Is that a secret clause of the Compact? Who would be able to provide a trustworthy answer? – The Corporate Europe Observer (October 1999, #5)

Challenges facing the UNGC Then: Problems in developing the Compact – Involving the right people in agenda setting – Giving the Global Compact teeth – Winning legitimacy from core actors (NGOs) Now: Ongoing problems – Vagueness of the compact – Attrition / non-compliance – Pressure from China

Involving the right people United Nations tried to incorporate all the relevant actors – Getting major corporations to provide input – Involving NGOs substantially more difficult Few major corporate watchdogs actually involved – Relatively little input from state governments But there isn’t a formal legal partnership between the UN and corporations – Companies pledge to uphold vague values

Giving the Global Compact teeth Major tension between attracting businesses and making the Compact mean something – Companies wanted Compact to focus on general principles of good business Provision for local interpretation of principles – Civil society hoped Compact would have specific, strict rules for companies and monitoring mechanism Companies win: 10 general principles, with no formal monitoring mechanism

Establishing legitimacy Problems: widespread criticisms of the process by commentators and civil society Concern: lack of involvement by key stakeholders – Lack of specific requirements for businesses Compact seen as too weak Solutions: attempts by Compact supporters to involve NGOs and state governments Some NGOs co-opted to gain support – Issue Framing: treating Compact as useful incremental step

Ongoing Challenges of the Compact Vagueness of the compact – Principles don’t have any binding power on signatories – Local interpretations allow companies considerable flexibility in following the Compact – Other companies don’t sign agreement at all Attrition / non-compliance – 1,000 companies (16%) delisted from Compact since 2008 Pressure from China – More difficult economic environment for companies to comply with heightened labor standards, anti-corruption measures, etc.