Vol. V, Bulletin No. 11.                                                                                  August 1, 2000 

UN's 'Global Compact': What Good Is It?

    Campaign to Get Multinational Corporations Involved
    In Promoting International Labor Standards Intensifies

"The problem is this," Kofi Annan, secretary general of the United Nations, told 1,000 corporate chieftains at the Swiss mountain resort of Davos in January 1999. "The spread of markets outpaces the ability of societies and their political systems to adjust to them, let alone to guide the course they take."  To help guide that course, he urged business leaders to join a "creative partnership" with the UN to promote "a set of core values in the areas of human rights, labor standards, and environmental standards" in the global economy.

At the UN headquarters on July 26, the CEOs of nearly 50 multinational corporations responded by signing a "global compact" to respect human rights, labor standards, and environmental standards in their business operations. Of the compact's nine general principles, four involve labor standards, which include upholding "freedom of association and the effective recognition of the right to collective bargaining."

The labor standards principles are drawn word for word from the International Labor Organization's Declaration on Fundamental Principles and Rights at Work, adopted with the unanimous support of employer representatives at the ILO Conference in June 1998.  The other principles come from the UN Universal Declaration of Human Rights and the Rio Principles on Environment and Development.

Compact No Substitute for Binding Rules: International Labor Leaders

John Evans, general secretary of the Trade Union Advisory Committee of the Paris-based Organization of Economic Cooperation and Development (OECD), led a three-man international trade union delegation that attended the high-level UN meeting.  Afterward, the delegation had these comments:

"The UN Global Compact offers a further opportunity for global dialogue between enterprises, trade unions, and non-governmental organizations. In so doing, it fulfills a critical need, but it must not usurp the role of binding rules to regulate the behavior of multinational companies."
Annan said the UN would establish a Global Compact Office to "finalize a priority plan for collaborative action."  But there will be no monitoring of how the business partners--which include Bayer, BPAmoco, Dupont, Ericsson, Nike, and Unilever--comply with the terms of the Compact.  (For more information about the meeting, check the Global Compact's Website.  For previous HRFW reports on the UN initiative, see "UN Chief's Challenge to Corporate Leaders," "How Kofi Annan Weakened His Initiative," and "Coming: Global Sullivan Principles for Business.")

In a letter to Kofi Annan, a group of 19 human rights and environmental activists last month criticized the Global Compact for its lack of monitoring and enforcement provisions, and proposed an alternative--a Citizens Compact that stresses the need of "a legal framework for corporate behavior in the global economy."

"We are well aware," they wrote, "that many corporations would like nothing better than to wrap themselves in the flag of the United Nations to 'bluewash' their public image, while at the same time avoiding significant changes to their behavior...Asking corporations, many of which are repeat offenders of both the law and commonly accepted standards of responsibility, to endorse a vague statement...draws attention away from the need for more substantial action to hold corporations accountable for their behavior."
Among the signers of the letter were Kenny Bruno, UN project director for the Transnational Resource and Action Center (TRAC), which monitors cooperation between corporations and the UN on its Corporate Watch Website.
*  *  *

China: The Global Compact's Supreme Test

What will the Global Compact matter to the men and women who work for us in Asia, the Caribbean, and Latin America?  There are so many millions of them employed producing for the American market that they are de facto members of the U.S. labor force.

The supreme test of the Global Compact is what effect it will have on the immense labor force of ours in China, which is bound to expand once China enters the World Trade Organization.  Will it make any difference to the many women in China's sweatshops?  Will it, for example, insure the payment of a decent wage?  But the Global Compact's principles say nothing about wages. Neither, oddly, do the ILO's Fundamental Principles.

Both the ILO and the Global Compact principles, however, are fairly explicit about freedom of association and the right of collective bargaining.  That's a challenge to the many Global Compact corporate partners who have business operations in China. China is the world's ideal "union-free" environment.  Employers there don't have to intimidate or fire union organizers. The government's security police does that for them. "Troublemakers" are locked up in labor re-education camps.  The Party units that operate in workplaces maintain discipline in-house.

Kofi Annan says that a company operating in a country that does not allow unions should permit its workers to organize and bargain. Nice idea, but naive, unless the UN can work a miracle.  Most U.S. multinationals are notorious for opposing unionization, by fair means or foul, in the United States, Malaysia, and other countries where unionization is legally permitted. Why would they embrace unions where they are prohibited?

Corporate cooperation is absolutely necessary to succeed in wiping out sweatshops and guaranteeing worker rights.  Kofi Annan is right about that. But it will take more than the current design of the Global Compact to change the anti-unionism that pervades modern corporate culture. The first to step is to recognize two realities:

A Book's Missing Dimension: Human Rights

You can't understand globalization, says Thomas L. Friedman, the foreign affairs columnist of the New York Times, unless you look at the world in 6-D: the six dimensions of politics, culture, national security, financial markets, and technology.  Friedman makes that point in his best-seller "The Lexus and the Olive Tree."  He acknowledges that when he began his journalistic career as the Times' Middle East correspondent, he was "the most narrow of reporters," with only the two-dimensional perspective of politics and culture.

Now Friedman has updated and expanded his 1999 hardback. Among the additions he makes in the Anchor paperback edition of his book are some newly acquired insights into how workers are exploited in large parts of the global economy.  "One of the biggest questions to arise in the age of globalization," he writes, "is how we deal with the important issue of worker rights and sweatshops."

He goes on to quote from an interview with Michael Posner, executive director of the Lawyers Committee for Human Rights:

"In the Cold War, the main issue was how do you hold governments accountable when they violate laws and norms.  Today the emerging issue is how do you hold private companies accountable for the treatment of their workers at a time when government control is ebbing all over the world, or governments themselves [such as China (Friedman's insertion)] are going into business and can't be expected to play the watchdog or protection role."
Friedman cites that quote to bolster his case for "bottom-up regulation...--not top-down regulation" by government. To perform that "bottom-up" role he urges "the human rights community...to retool in this post-Cold War World, every bit as much as the old arms makers have had to learn how to make subway cars and toasters instead of tanks."

Some human rights organizations are indeed retooling. Often, by the way, with financial and other help from government.  But journalists, too, need to retool to see and describe globalization as it is.

"Now that I am up to six D's, I don't know what's next," Friedman writes. "But if and when a new dimension becomes apparent, I will add it."  Too bad that  the human rights dimension has not yet become apparent enough for him to integrate it into the complexities of globalization. Hopefully it will become clearer.  Hopefully, too, as his insights evolve, he will see that government--yes, "top-down regulation"--still plays a crucial and often indispensable role in every dimension of globalization.

(For more on Friedman and his book, check http://www.lexusandtheolivetree.com.)

Competition Poisoning Asian Shoe Workers

Initiatives to advance international worker rights have "focused lopsidedly on the issues of wages, optimum length of working hours, and the right to collective bargaining, without paying enough attention to occupational safety and health (OSH) problems."  So say two researchers, Meei-shia Chen of the National Cheng Kung University in Taiwan and Anita Chan of the Australian National University in Canberra, writing in a recent issue of the International Journal of Health Services.

In an article titled "China's 'Market Economics in Command': Footwear Workers' Health in Jeopardy," they charge that "the Chinese state is being driven by an economic imperative in which the profit motive overrides other concerns, causing a deterioration in [worker health and safety] conditions."  Among their findings from four years of research in China:

As a result of comparative research elsewhere in Asia, Chen and Chan point out that such health and safety problems are not confined to China, but are severe also in Vietnam, Indonesia, and other Asian countries that manufacture footwear. "The situation seems likely to deteriorate," they write, "as labor-intensive industries in China and elsewhere in Asia and the world become more competitive."

China is by far the world's largest maker of footwear, producing some four billion pairs a year, about a fourth of which are imported into the United States.

(International Journal of Health Service is published by the Baywood Publishing Co., whose Web address is http://baywood.com.)
Email: No Way To Rate Life in This Jungle

Dear HRFW:

I am involved in a research project for an Organization Leadership-Business Ethics class at Chapman University. I was wondering if there is any list of businesses (similar to Nike) and other industries rating them according to best and worst practices.  Nike took a lot of heat for [health conditions at] the Tae Kwang Vina Factory [in Vietnam], but are there reports that show that the competitors are any better?

--Steve Cardova, San Diego, Cal.
Dear Steve Cardova:

Interesting question, but it raises an even broader ethical issue: In judging behavior, whether of individuals, corporations, or governments, how significant are comparisons to what others do?  For example: If a husband batters his wife once a week, does it lessen his guilt when other men in his neighborhood batter their spouses twice a week?  If a plantation owner has fewer slaves and treats them better than other plantation owners, is that a justification for slavery?

But specifically to your question. I know of no comparative list of the kind you seek.  The basic problem is that, for millions of the most vulnerable men, women, and children, the international labor market is a lawless jungle. Moreover, the danger of singling out this or that corporation as better than others is that you may let that corporation off the hook and lessen pressures for it to make the progress that is still urgently needed.

--Bob Senser

Human Rights for Workers: Bulletin No. V-11, August 1, 2000
Robert A. Senser, editor
Copyright 2000
hrfw@senser.com. (Send e-mail)

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