Kofi Annan’s ‘global compact’ a whitewash for western corporations

M.A. Shaikh

Dhu al-Qa'dah 22, 1421 2001-02-16

World

by M.A. Shaikh (World, Crescent International Vol. 29, No. 24, Dhu al-Qa'dah, 1421)

Kofi Annan, United Nations secretary-general, urged business leaders gathered at Davos, Switzerland, on January 29 to help him to achieve his goal of getting a thousand corporations to back his Global Compact. It pretends to be aimed at involving companies in partnerships to help develop social infrastructures and reduce poverty in the ‘developing world’. He warned them that failure to contribute to development would confront them with a backlash against globalisation and the growth of protectionism. As if to reassure them, he announced that the recruitment of corporations for the initiative would be led by Goran Lindahl, a prominent businessman who has resigned as chief executive of the Swiss-Swedish engineering group ABB to do just this task.

But the businessmen Annan was addressing do not need the warning or the reassurance. They know that the International Chamber of Commerce (ICC) has been closely involved in the development of the UN initiative since its inception, and that in any case it comes at a time when corporations have been receiving very poor publicity in the media and from academics and non-governmental organisations (NGOs) worldwide. They are accused of dumping unwanted pharmaceutical products in the developing world, and are suspected of smuggling cigarettes and arms to Asian and African countries, thereby not only fuelling the civil wars in those regions and corrupting politicians but also undermining health-programmes. What better publicity can they get than being associated with a UN scheme to ‘aid’ those regions? The UN secretary-general is from Africa and is supposed to be the official representative of that continent. Yet Kofi Annan is deferential to Washington, and will not drive a hard bargain to admit corporations into partnership with the world body.

But the world compact is not confined to the developing world. It also covers issues such as human rights, labour relations and environmental matters, which have great relevance to the ‘developed world’. The so-called “nine principles” of the initiative require businesses to support and respect internationally recognised human rights; promote and develop environmentally-friendly practices, initiatives and technology; and to eliminate discrimination and child-labour; all this while upholding freedom of association and the ‘right to collective bargaining’. Merely being seen to be associated with this programme will also benefit corporations in the industrialised countries, where they are receiving even worse publicity. It is not, therefore, surprising that corporations in the developed world, represented by the ICC, are jumping on the bandwagon, with 300 of them signing up so far. The UN hopes that a thousand will endorse the Global Compact eventually. The ICC — determined to extract maximum publicity from the project — in November 1999 opened a Global Compact section on its website (www.iccwbo.org), “with news stories about corporations that fulfil the compact”, as its advertising tracts put it. This section, the ICC says, was opened at the suggestion of the UN.

But the ICC is not contenting itself with opening a website. It also takes out large sponsored sections in newspapers with international circulation, in which it explains how it has been deeply involved in the development of the global compact concept from its beginnings. For instance, its sponsored section in the International Herald Tribune on January 25 claims that Annan and ICC leaders “foreshadowed the Global Compact to establish a regular dialogue between business and the UN as long ago as February 6, 1998.” Annan first proposed the initiative at the World Economic Forum in Davos on January 31, 1999, and officially launched it at UN headquarters on July 26 last year.

This ill-advised project — which has already played into the hands of the ICC and the Western governments that push the idea of unfettered capitalism and globalisation — has received little critical approval, even in the west. The odd die-hard capitalist, such as George Soros, the billionaire share-dealer, has even been known to discuss its irrelevance to the economic and social development of the ‘developing world’. Soros, speaking at Davos in late January, described the Global Compact initiative as a “whitewash”.

Could Annan have been influenced by the fact that his term of office is ending soon? He knows that the US government will be influential in deciding whether or not he gets a second term, and that corporate America can affect Washington’s decision. Should he fail to get this second term, the ICC would be likely to seek his services in exchange for a lavish reward. This is merely a typical example of how short-term personal considerations influence important decisions in international politics.