MARCH 2000 VOLUME 21 NUMBER 3


ECONOMICS

 
Perilous Partnerships
The UN's Corporate Outreach Program
 

Kenny Bruno is research associate at the Transnational Resource and Action Center and one of the drafters of the Citizens Compact on the UN and Corporations.

by Kenny Bruno

Not long ago, Unicef made its reputation in the United States by sending children out trick-or-treating at Halloween with collection boxes. Now the UN is increasingly going hat in hand to a new source: the world's largest multinationals. With Secretary General Kofi Annan calling for UN-corporate "partnerships," UN agencies have entered into an array of partnerships with giant corporations, including many that citizen movements have denounced for violations of human and labor rights, environmental destruction and endangering consumers. Among the UN's new partners: McDonald's, Disney, Chevron and Unocal.

Largely for these reasons, as well as a concern that the partnerships will undermine the UN's ability to serve as a counterbalance to global corporate power, citizen groups around the world are increasingly challenging the new partnership arrangements. They are calling on the UN to pull back from the partnerships and, at a minimum, set clear guidelines for any cooperative ventures with business enterprises.

The UN Goes To Market
Fueling the partnership initiatives is a new business-friendly ideology at the UN and, perhaps more importantly, a desire to curry favor with the United States, the UN's largest funder. All UN officials are keenly aware that support from the United States is predicated upon a friendly stance toward business. U.S. business pressure led to the closure of the UN's Center on Transnational Corporations (CTC) in the early 1990s. And the U.S. practice of withholding dues from the UN has cast a shadow over its budget and jeopardized its operations.

While the corporate partners say they have charitable impulses, they are relatively open about their other motivations: to improve their image and expand into new markets.

Non-governmental groups first became alarmed about the UN partnerships a year ago, when Ward Morehouse of the New York City-based Center for International and Public Affairs obtained an internal memo from the United Nations Development Program (UNDP) detailing plans for a UN-private sector partnership called the Global Sustainable Development Facility (GSDF).

Among the GSDF corporate partners were: Rio Tinto Zinc, a British mining company with a record of environment and human rights and development abuses from Namibia to New Zealand; Dow Chemical, the world's largest producer of chlorine, the root source of dioxin, and one of the largest pesticide companies; and Asea Brown and Bovari, a leader in promoting a "corporate environmentalist" image since the Earth Summit in 1992, but also one of the main suppliers for the controversial Three Gorges Dam in China, which is projected to displace nearly two million people from their homes.

Morehouse and other critics charged that partnerships with these companies violated the UNDP's own guidelines for "Mobilization of Resources from the Private Sector." In those guidelines, UNDP officers are required to consider if a corporation's activities are "ethically, socially or politically controversial or of such a nature that involvement with UNDP cannot be credibly justified to the general public."

An even more profound problem with the GSDF, critics said, was its basic concept. The GSDF's awkward slogan was 2B2M 2020, or "providing market access to two billion people by the year 2020." The program's goal was to direct private sector money into development projects that would serve the poor.

But as Roberto Bissio of Uruguay's Third World Institute told then-UNDP Chief Gus Speth, "The concept that giant corporations are relevant for the development of the poor goes against the good work the UNDP itself has done on the root causes and solutions to poverty." The two billion poorest people in the world are precisely those of least interest to the global corporations, Bissio argued. Their interests are much more likely to be served by fostering small and medium enterprises, micro credit programs and other smaller scale initiatives, says Bissio.

When the citizen groups learned about the GSDF in March 1999, about 15 companies had already contributed $50,000 each to get the process going, but technically the GSDF did not yet exist. After representatives of the groups met with Speth in May, the project went into the "deep freezer," according to one UN official. In August, the new UNDP Administrator, Mark Malloch-Brown wrote to GSDF critics that the agency was carrying out "an assessment of our key partnerships -- an area to which I assign the highest priority." The GSDF seemed to be on indefinite hold.

But since then, the UNDP has gone public with some of its other private sector partnerships. On December 10, International Human Rights Day, the New York Times painted a glowing picture of how "big companies' strategic partnerships [with UNDP] open doors in developing countries." Among the "success" stories: a BP Amoco oil concession contract in Angola and Chevron's contribution toward a UNDP-run business center which assists small businesses in developing business plans, filling out loan applications and developing entrepreneurial skills in Kazakhstan.

Millennium Dreams
Prodded by Secretary General Kofi Annan, the UNDP is just one of many UN agencies moving forward with the new partnerships. Last year, at the World Economic Forum in Davos, Switzerland, Annan challenged the world's elite business leaders to take up a "Global Compact" with the UN.

The Compact challenges business to "do its part by demonstrating good global citizenship wherever it operates." It sets out nine principles derived from key labor, human rights and environmental treaties for business to adopt. And the Compact states that three key UN agencies -- the UN Environment Program, the UN High Commission on Human Rights and the International Labor Organization "stand ready to work directly with corporations in advancing the Global Compact." Yet there is no provision for monitoring or enforcement in the Compact.

No company has yet signed on to the Global Compact, though the International Chamber of Commerce has endorsed it.

Despite the slow progress of the Global Compact itself, other UN agencies are moving ahead with private sector partnerships. The Secretary General may not have complete control over these partnerships, but they do have his blessing.

UN High Commissioner on Refugees Sadako Ogata has co-chaired, with Unocal President John Imle, a meeting of the Business Humanitarian Forum, a group founded and headed by a former Unocal vice president. Unocal is a business partner with Burma's murderous military regime, and human rights advocates charge Unocal's gas pipeline project in Burma has generated thousands of refugees seeking to escape the militarized pipeline area.

The UNHCR's position on sharing the podium with Unocal echoes Unocal's argument for investing in Burma. In a letter to groups objecting to the association with Unocal, UNHCR's Communications Director John Horekens writes, "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."

UNESCO, the UN's educational arm, is teaming up with Disney and McDonald's to present "Millennium Dreamer" youth awards this April at Disney World. It "should have crossed UNESCO officials' minds that young people have more than enough exposure to those two brands already," says Beth Handman, a curriculum specialist in the New York City Public Schools. "It's very important for kids to learn that commercial motivations and educational values are two different things," says Handman.

The World Health Organization has aggressively sought corporate partners among the pharmaceutical industry, especially those selling nicotine-replacement products.

Health Action International, an international network of consumer and public health organizations, has challenged WHO's partnerships with drug companies and other corporations. "We believe there is a fundamental difference between the core purpose of the WHO -- which is to serve the public interest -- and the aim of pharmaceutical companies, which is to maximize profits for their shareholders," HAI Europe Coordinator Bas van der Heide wrote in a May 1999 letter.

HAI expressed the greatest concern about WHO accepting secondments -- staff on loan -- from the pharmaceutical industry. "We have deep doubts about whether it will be possible to know if in the future when communicating with WHO the WHO staff member is actually accountable to a public organization or the international commercial sector."

WHO Secretary General Gro Harlem Brundtland, the former Norwegian Prime Minister, responded in a June letter that, "In the case of the secondment to the Tobacco Free Initiative, the company had no interest in the area of smoking cessation, the person seconded brings to the project a specific and needed expertise for a time limited period, and the person is specifically excluded from involvement in activities in which the company from which she is on secondment could have any interest."

Brundtland denied the staff person might seek outside direction from her drug company employer. "There are clear undertakings on confidentiality, and on the person involved not seeking or accepting instructions from anyone outside WHO, specifically the company from which she is on secondment," Brundtland wrote.

In July, WHO drafted guidelines to regulate its interaction with corporations, to help "avoid conflict of interest, real or perceived."

But HAI says the guidelines fall short of addressing the problem. "The main flaw of the draft guidelines is that they do not give sufficient guidance for a serious evaluation of the activities of potential and current commercial partners and therefore do not substantially reduce the problem of conflicts of interest," according to van der Heide.

The UN As Trojan Horse
For the companies involved, the partnerships offer marketing opportunities and political protection. "Companies know that if they help the United Nations with its pet projects, it will open doors and act as a valuable buffer between them and the governments of countries in which they wish to operate," reports Claudia H. Deutsch of the New York Times.

"Of course we want to eradicate neonatal tetanus," Gary M. Cohen of Becton Dickinson and Company, which manufacture those devices told the New York Times. "But we also want to stimulate the use of nonreusable injection devices."

"The companies are using the UNDP, with its good reputation in the developing world, as a Trojan horse to gain access to markets," says Sanho Tree of the Institute for Policy Studies in Washington, D.C.

Sometimes, the corporate motivation reflects even longer term thinking than Becton Dickinson evidences. Chevron spokespersons, for example, say the company is supporting the business center in Kazakhstan as part of an effort to develop a market economy, which in turn will provide the stability the oil giant needs to operate safely.

A Citizens Compact
That the UN will have to interact with corporations is not in doubt. How they will interact is the question.

The approach of the UNDP, UNESCO and UNHCR represents what John Cavanagh of the Institute for Policy Studies calls the "low road" of kowtowing to corporate interests.

Miloon Kothari, the UN representative of the South Africa-based Habitat International Coalition, discerns a high road in the approach of the UN Human Rights Commission's Sub-Commission on Protection and Promotion of Minorities. The Sub-Commission has resolved to examine the impacts of multinationals and global trade deals, analyze possible liability of multinationals and look at mechanisms for legal monitoring standards for multinationals, and has even re-opened the idea of a Code of Conduct for multinationals based on international standards.

Kothari is part of an alliance reaching out to Kofi Annan and the UN. At the World Economic Forum in Davos last year, Kofi Annan presented the Global Compact to business leaders. This year in Davos, NGOs responded by presenting an alternative to the Global Compact.

Called the "Citizens Compact on the UN and Corporations," it lays out nine principles that the UN should follow in its dealings with private business. The first principle states that "multinational corporations are too important for their conduct to be left to voluntary and self-generated standards. A legal framework must be developed to govern their behavior on the world stage."

The stakes in the UN corporate partnership initiative are very high, as they involve the core values of the UN itself. At issue, insist critics, is the primacy of human rights, health, labor rights and environmental protection over markets and profits.

Many non-governmental organizations are offering Kofi Annan and the UN their ongoing support for a stronger UN to counterbalance the WTO and other global institutions perceived as commercially biased.

But these UN supporters will not back down from insistence that, as Ward Morehouse puts it, "the UN's job must be to monitor and hold corporations accountable, not to give out special favors."