Bringing TNCs into the UN framework


NEW YORK: The President of the UN General Assembly, Ambassador Razali Ismail of Malaysia, announced on 25 June the elements of a proposed framework of cooperation between the UN, the private sector, governments and NGOs.

The announcement followed a high-powered lunch on 24 June attended by representatives of big business, government leaders, the UN Secretary-General and NGO representatives.

The invitation-only lunch-cum-Round Table on "Cooperation between Governments, Private Sector and the UN in meeting Sustainable Development objectives" was organized and hosted by Ambassador Razali and Mr Bjorn Stigson, executive director of the World Business Council on Sustainable Development (WBCSD).

It was planned as one of the "side-events" of the Rio+5 Summit at the UN General Assembly Special Session (UNGASS), to review implementation of Agenda 21, on 23-27 June.

The lunch had originally been proposed by the WBCSD as an opportunity for chief executive officers of some transnational corporations to meet with leaders of the Group of 7 countries and UN officials.

Following discussions between the WBCSD and the office of the General Assembly President, it was agreed that participation at the lunch meeting would be broadened to also include government leaders from the South and a few representatives from the NGO and research community.

Among those attending the Round Table lunch were Secretary- General Kofi Annan, Under-Secretary-General Nitin Desai, UNDP Administrator Gus Speth; Norway Premier Thorbjoern Jagland, US Deputy Treasury Secretary Larry Summers, Guyana President Samuel Hinds, Ministers (of Environment, Overseas Development or Foreign Affairs) of Netherlands, UK, Canada, Japan, Russia, China, India, Brazil, South Africa and Costa Rica.

From the big business side came the Secretary General of the International Chamber of Commerce, Maria Cattaui, Chairmen or CEOs of ten corporations - 3M, Waste Management International, VIAG AG, Tokyo Electric Power, Noranda Inc., Eskom, Norsk Hydro ASA, Grupo IMSA, Anova Holding AG and Henkel KGAA.

From civil society and academia were the NGO representatives of the Washington-based World Resources Institute, the New York-based People-Centered Development Forum, the Third World Network and the Asian Women's Indigenous Network.

The aim of the Round Table was to initiate dialogue on the relationship between the private sector and the UN to meet the objectives of sustainable development.

Some observers had viewed the WBCSD initiative as an attempt by big business to institutionalize the already growing influence of private corporations in the UN system.

Officials of the UN and its agencies, caught up in a financial crisis caused mainly by the non-payment of dues by the US, are seen by many as being eager to "embrace" the private sector as an alternative source of finance, in exchange for being accepted as a "partner in development."

However, there are presently no rules, guidelines or framework to guide the relations between the UN and the private sector. Given the vacuum, concerns have been raised by some observers and NGOs that big business would increasingly encroach onto UN territory and influence its policies and activities.

The lunch-Round Table was an attempt by the General Assembly President to explore a possible framework of relations between the UN, governments, NGOs and the private sector.

In a "background briefing" issued following the Round Table, Ambassador Razali Ismail said, "the Round Table was an initial attempt to explore the prospects of building a collaborative relationship in the context of meeting sustainable development objectives."

"It was a confidence-building measure which allowed for an elaboration of views from different perspectives. Further discussions on the diverse viewpoints are needed to establish a framework of cooperation."

Elements of a framework

The briefing note said the elements for such a framework would include the following:

* that the Commission on Sustainable Development would be the focal point of interaction for governments, the private sector and other stakeholders in operationalising sustainable development;

* that there would be readiness on all parts to volunteer information and experience, both positive and negative, to be jointly examined;

* that future discussions would consider objective scientific findings and international standards;

* that government and private sector would undertake their expected roles; governments in the context of directing and regulating sustainability and the private sector in accepting corporate responsibility;

* that there would be no hindrance of access to information; and

* that the four active sectors, the governments, private sector, NGOs and academics would actively be involved in further discussions and in fleshing out the elements of a framework of collaboration.

Razali added: "The framework of cooperation would be necessary to facilitate participation of the private sector in the programmes and projects undertaken by relevant bodies of the UN." He also suggested that these ideas would have to be brought up for consideration and possible acceptance by the CSD.

At the Round Table-lunch, held at the Delegates' Dining Room of the UN Building, brief statements were reported to have been made by the General Assembly President, the UN Secretary General, the UNDP Administrator, several leaders from Northern and Southern countries, three business leaders and an NGO representative.

In his introductory remarks, Ambassador Razali said a framework is needed for defining cooperation between the UN and private sector. Governments submit reports to the CSD and the private sector should also voluntarily do so.

UN Secretary-General Kofi Annan emphasized that two changes had taken place. Firstly, businesses could no longer afford to think in local terms only. Secondly, in the area of governance there are many stakeholders with impact on sustainable development and there were several areas where cooperation at the international level is needed.

A business representative said the WBCSD wished to be "constructive and responsible", for example, by promoting eco- efficiency and willing to share best practices. He emphasized that business is not monolithic; a lot remains to be done but "we do see a paradigm shift".

A political leader said that market forces alone do not pay for schools and health care and there was a need to address employment and inequitable access to technology. Global taxation was needed for a strong UN. He wondered why business is against global taxes.

Another political leader said poverty elimination is the key to sustainable development and unity between developed and developing countries. The business sector should come to realize this. There is a need to ensure sustainable livelihoods; it is not enough to say that wealth will somehow trickle down. Targets should be set for poverty reduction and elimination. Another political leader noted that "we cannot get to sustainable development if business does not work together with governments in the same framework."

An NGO representative said, TNCs had grown larger since Rio and there had been many negative impacts of corporate activity on the ground. How can the private sector be expected to deliver sustainable development? The UN, in an increasingly globalized world, needs to be an international arbiter and needs to ensure an open and transparent process for developing a framework for the private sector to operate.

The Round Table has elicited contrasting responses among the UNGASS participants. Some felt that it was a timely initiative to start a dialogue between business, the UN and governments. "It is necessary to get to grips with the role of the private sector, and to develop a framework to set the role of business in the UN on a proper course," said one diplomat.

Some NGOs were more skeptical. The NGO daily bulletin "Outreach 1997", published by the CSD/NGO Steering Committee, commented that the lunch-dialogue "revealed the degree of helplessness felt by UN agencies and member governments in trying to control transnational corporate activities causing global ecological degradation."

"The dialogue could signal the surrender of any UN attempt to regulate business and possibly a corporatization of the UNCED process" said the article, headlined "CSD: Corporatizing Sustainable Development?".

The article also noted that the WBCSD was established before the Rio Earth Summit of 1992, as an initiative by the global business community to influence the UNCED debate.

[At that time the WBCSD proposed its own measures for corporate self-regulation of their activities, and this voluntary model was used to side-track the calls by NGOs that TNCs should be regulated by the international system to make them more socially and environmentally responsible and accountable].

The NGO bulletin article said that "some view the initiative in light of current UN downsizing, which leaves it desperate for financial resources... Others believe it could herald the next stage of UN reform, this time under the direct influence of the private sector." (TWE No. 165, 16-31 July 1997)