Falling short

In 1999, Kofi Annan, then secretary-general of the United Nations, launched a program offering international companies a partnership agreement with the world body called "Global Compact."

The deal makes companies agree to comply with nine general principles concerning human rights, labor standards and protecting the environment. In return, they receive permission to call themselves UN partners and to use the United Nations Environment Program's blue logo in their publications and advertising material.

The program added a 10th principle against corruption in 2004.

Annan launched the program after he criticized the governments of member states, for what he said was their failure to implement and satisfactorily monitor international agreements on human rights and labor law.

All UN's 193 member states have agreed to a comprehensive set of international human rights standards. The International Labour Organisation has come up with more than 170 conventions around labor law and social issues. Since the end of the 1980s UN members have also put in place numerous international agreements in a bid to protect the environment.

But due to the difficulties governments were having adhering to the agreed-upon standards, Annan decided to approach the private sector.

No binding criteria

During Global Compact's start-up phase, around 50 companies around the globe were involved in negotiations on the agreement's details.

They deliberately avoided establishing binding criteria and measures to monitor whether companies were in fact keeping the ten voluntary commitments. Largely due to that, very few non-governmental organizations (NGOs) heeded Annan's call to take part in the program.

Most NGOs were critical of the initiative, charging that many of the more than 7,000 Global Compact companies were merely using their UN partnership as a form of "blue wash," that is, burnishing their corporate image without enforcing the program's human rights, labour, social and environmental protection standards.

A significant number of companies are suspended from Global Compact every year because they do not even fulfil the minimum requirement of delivering a report on their efforts to implement the standards.

UN image problem

Criticism of the program has become ever louder within the UN itself.

"Ten years after it was founded, the aims and results of Global Compact are still unclear," said a report published by the UN's Joint Inspection Unit (JIU) in mid-March of this year.

"It also involves considerable risks," the report continued. "If it isn't improved, it could tarnish UN's image."

As the UN's only independent external oversight body, the JIU is tasked with monitoring and evaluating the work conducted by the UN's various departments and special organizations.

The inspectors' report concludes with 16 concrete recommendations for improving Global Compact, which will be discussed at the UN General Assembly this fall. The inspectors said that above all, Global Compact needs more stringent admission criteria.

Improved monitoring

Companies wishing to join Global Compact need only to fill out an application; no further evaluation is carried out. The JIU recommended that independent external experts examine applications using set criteria, similar to the practice at UNICEF, the U.N. Children's Fund, which also has a partnership program with the private sector.

"The instruments used to monitor the targets need to be much more efficient," the JIU said.

Right now, companies merely have to provide the Global Compact office in New York a self-assessment once a year. There is no further evaluation, even if an NGO or the media publish reports criticizing a company or if it is sued in court.

Author: Andreas Zumach / mm
Editor: Kyle James