The Global Compact: Challenges in Agenda Setting

1
The Global Compact Challenges in
Agenda Setting
2
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?

3
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 31 1999
• 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

4
The Global Compact Principles

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

Source (Adapted from the UN Global Compact
website, www.unglobalcompact.org)
5
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

6
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 arrangementsespecially 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

7
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.

8
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

9
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.
• UNGCs local adaptations allow local networks to
  advocate for solutions that are important in
  their own contexts.

10
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)

11
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

12
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 isnt a formal legal partnership
  between the UN and corporations
• Companies pledge to uphold vague values

13
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

14
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

15
Ongoing Challenges of the Compact

• Vagueness of the compact
• Principles dont have any binding power on
  signatories
• Local interpretations allow companies
  considerable flexibility in following the Compact
• Other companies dont 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.