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A Perilous Partnership

The United Nations Development Programme's Flirtation with Corporate Collaboration

by Joshua Karliner, John Cavanagh, Phyllis Bennis and Ward MorehouseCorpWatch, IPS and CIPA
March 16th, 1999


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Contents

Perilous Partnership Cover

Executive Summary
Corporations Threaten to Divert UNDP Agenda
Box: UNDP's Corporate Sponsors
The UN and Corporations: Which Future?
Conclusion
Endnotes
Additional Resources

A Perilous Partnership
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File Size: 162KB/17 pages



This report was written by Joshua Karliner, TRAC, with assistance from John Cavanagh and Phyllis Bennis, IPS, and Ward Morehouse, CIPA.

TRAC—The Transnational Resource & Action Center works to build global links for human rights, environmental justice and corporate accountability. Our website Corporate Watch www.corpwatch.org is an Internet magazine and resource center. TRAC, P.O. Box 29344, San Francisco,CA 94129 USA, Tel: 415-561-6568, Fax: 415-561-6493, E-mail: corpwatch@corpwatch.org

IPS—For 35 years, the Institute for Policy Studies has linked research and innovative ideas to social change. IPS' Foreign Policy in Focus project, in conjunction with the Interhemispheric Resource Center, produces weekly briefs on global issues at www.foreignpolicy-infocus.org. IPS, 733 15th Street, NW, Suite 1020, Washington, DC 20005 USA, Tel: 202-234-9382

CIPA—The Council on International and Public Affairs is a research, education and advocacy group working on environmental, human rights and social justice issues. CIPA staff have worked with the United Nations and several of its specialized agencies since 1978. CIPA—777 UN Plaza, Suite 3C, New York, New York 10017 USA, Tel: 212-972-9877, Fax: 212-972-9878, E-mail: cipany@igc.apc.org

Thanks to Sarah Anderson, Marc Beck, Robert Bray, China Brotsky, Kenny Bruno, Teena DiNota, Deborah Holder and the Unitarian Universalist Veatch Program, Danny Kennedy, Leonard Kurz, Rochelle Lefkowitz, Tarjei Leer-Salvesen, Julie Light, Patrick McCully, Kathy Parrent, Amit Srivastava. Designed by Tristi Tanaka



Executive Summary

  • The independence of the United Nations Development Programme (UNDP), one of the most important UN agencies, is threatened by a plan -- not yet made public -- to launch collaboration with a group of global corporations in June, 1999.

  • Called the Global Sustainable Development Facility (GSDF) -- 2B2M: 2 Billion People to the Market by 2020 -- the plan is outlined in a series of internal documents obtained by TRAC, CIPA and IPS.

  • The documents and independent interviews show that the UNDP appears to be selling a group of global corporations -- many of which are well known for their negative development, human rights and environmental records -- unprecedented access to its country offices, high level governmental contacts and its reputation.


The Companies

The documents list 11 corporations as sponsors of the proposed facility. UNDP has reportedly recruited 7 more. UNDP is selling these sponsorships for US$50,000 each. The companies include:

Rio Tinto Plc, a British mining corporation which has created so many environmental, human rights, and development problems that a global network of trade unions, indigenous peoples, church groups, and community activists has emerged to fight its abuses. The company stands accused of complicity in, or direct violations of environmental, labor and human rights in Indonesia, Papua New Guinea, Philippines, Namibia, Madagascar, the United States and Australia, and elsewhere.

ABB Asea Brown Boveri (GSDF steering committee member) is a Swiss-Swedish company that has faced sustained campaigns by environmentalists and human rights advocates against its involvement in various hydro projects, including the Three Gorges Project in China and the now indefinitely postponed Bakun Dam in Malaysia.

Dow Chemical (GSDF steering committee member) is one of the biggest polluters in the United States, the world's largest producer of chlorine -- the root source of the carcinogen and endocrine disrupter dioxin -- and one of the world's largest pesticide companies.

Citibank played an important role in the Asian financial crisis that threw millions out of work in 1997. As a major lender to developing countries in the 1960s and 1970s, Citicorp's lending patterns fueled the Third World debt crisis. It has recently made headlines for allegedly serving as a conduit for millions of dollars of drug money moved by Raul Salinas (brother of the former Mexican president) from Mexico to Switzerland.

Stat Oil, Norway's state-owned oil company is involved in several environmental and development conflicts at home, as well as in Venezuela, Russia, Malaysia and Nigeria.


The Consequences

  • Given the collective record of many of the UNDP's proposed corporate partners, it is unclear whether they see this proposed joint venture with the United Nations as linked to its stated goal of "sustainable development." Rather, it may be more of an opportunity for these corporations to practice "greenwashing" -- a public relations exercise aimed at improving their troubled images. In fact, the documents show that UNDP is considering creating a logo which each GSDF corporate sponsor could use for "highlighting the special relationship with the UNDP."

  • The UNDP claims that the lives of the world's poorest 2 billion people can or will be improved by drawing them into the world economy -- the stated objective of its corporate collaboration. Yet the most pressing needs of the poor -- the provision of basic health, education, and food resources -- are of little or no interest to global corporations. Indeed, corporate activities -- including those of a number of GSDF partners -- frequently do damage to the world's most vulnerable inhabitants, for instance, by polluting local water and food sources.

  • The "joint venture" raises the specter of UNDP programs and priorities increasingly serving corporate shareholder interests rather than humanitarian goals. This is a sharp diversion from the central mission of the UNDP in particular. Yet the UNDP documents indicate no conflict citing instead the "strong relationship...between sustainable human development and the growth of shareholder value."


The Broader Context

  • The UNDP project reflects a broader UN trend of growing collaboration with global corporations. This trend first gained prominence at the UN Earth Summit, and has been accelerated by Secretary General Kofi Annan over the past year.

  • On January 31, 1999, the Secretary General called on business leaders in Davos, Switzerland to join in "a global compact of shared values and principles" with the UN. This challenge is an important step in pressing transnational corporations to adhere to universal values defined by the UN in the areas of human rights, labor rights and the environment. But it fails to address the fundamental divide between the interests of global corporations and the multilateral trading system on the one hand, and the interests of the world's poor, the environment and democratic institutions on the other.

  • While corporate collaboration is increasing with projects like the GSDF, efforts are underway to eviscerate a sub-group of the UN's Human Rights Commission which is beginning to address the impacts of transnational corporations on a broad spectrum of human rights issues.

  • Financial troubles, created in large part by the United States' failure to pay the US$1.6 billion it owes in back dues, play a role in the United Nations' pursuit of financial and political support from transnational corporations. Just as public institutions in the US and other nations have become dependent on corporate support as their government budgets have been reduced, the UN now faces a similar situation.


The Solutions

  • The UNDP should call off its GSDF project.

  • Secretary General Annan should reconsider his call for a "global compact" with transnational corporations which could seriously damage the UN's reputation. He should continue to openly explore ways in which the UN can position itself at the center of efforts to build a future where human rights, labor rights and the environment come first.

  • The Secretary General should pay particular attention to maintaining the ability of the Human Rights Commission to address the impacts of transnational corporations and globalization.

  • The U.S. should pay what it owes the UN while refraining from using its financial clout in an attempt to impose its economic perspective on the world body.


Corporations Threaten to Divert UNDP Agenda

The well respected United Nations Development Programme (UNDP) has reached out to at least 30 major global corporations to create a new joint program called The Global Sustainable Development Facility -- 2B2M: 2 Billion People to the Market by 2020."1

Although the initiative has yet to be made public, so far, more than eleven transnational corporations are paying US$50,000 each to sign-on as sponsors.2 Many of these companies are well known for the negative impacts their activities have had on human rights, the environment and development.


"For US$50,000 companies' tarnished images could be brightened by UN partnership."


Dedicated to alleviating poverty, the UNDP is the largest operating part of the United Nations system, with offices in 135 countries and programs in 174 nations. In its own words, the UNDP "has 40 years experience of field work in developing countries, a global framework of great diversity, with governmental and institutional contacts at the highest levels."3

However, the UNDP now appears to be selling a group of global corporations unprecedented access to its network of country offices, high level governmental contacts, and its reputation. The UNDP is attempting to market these resources to potential corporate sponsors as "benefits of cooperation" and a way to "reduce the risk of future business ventures."4

While it has been criticized by non-governmental organizations and others for a number of misguided initiatives over the years,5 the UNDP has also built an excellent reputation in global development circles. For example, it has redefined international understanding of development by creating the "Human Development Index" -- a way of measuring development that incorporates a wide variety of educational, health, and other social indicators alongside economic information. The Index has highlighted the grave disparity between rich and poor nations, while also pointing out that people in countries like Canada and Norway have a higher quality of life than their counterparts in the United States.

Given the important role that UNDP plays in helping define the global development debate, it is of serious concern that this UN agency is planning on collaborating with a group of corporations, some of whom have quite tarnished records when it comes to human rights, labor rights, the environment and sustainable development (see box).


Sustainable Development or Corporate PR and UN Fundraising?

The leadership of UNDP plans to establish the Global Sustainable Development Facility (GSDF) outside the UN system, while maintaining intimate ties with it. As the UNDP puts it, the GSDF will "benefit from the advice and support of the UNDP through a special relationship."6

Part of this "special relationship" appears to be financial. Merely for the privilege of dialoguing about the collaboration, each of at least eleven participating corporations is paying UNDP US$50,000.7 This may be a wise investment for sponsoring transnationals such as the British Rio Tinto Plc., and the Swiss-Swedish Asea, Brown, Boveri (ABB), as well as GSDF Steering Committee member Dow Chemical (U.S.) -- companies whose development, human rights and environmental images may be significantly brightened by their collaboration with the UN.


"UNDP is considering creating a special logo to be used by participating corporations."


For instance, the UNDP is considering creating a special GSDF logo which could be used by participating corporations. The logo would be created with the aim of "highlighting the special relationship with the UNDP."8

This raises the question of the motivation of the UNDP's proposed corporate partners -- and whether, for them, the venture has much to do with its stated goal of "sustainable human development." Transnational corporations have a long history of what many have referred to as "greenwashing," whereby they wrap their destructive activities in the rhetoric of helping the environment in order to gain public relations victories with consumers, government officials and others.9

It is not inconceivable that a company like ABB, which may be building a controversial and environmentally destructive mega-dam or nuclear power plant in a developing country could benefit -- politically and image wise -- from touting its collaboration with the United Nations on a small development project strategically located nearby. It is also not inconceivable that a company might get preferential access to developing country markets and resources because of its links with the UNDP's GSDF.

While it might represent a new trend, the GSDF would not mark the UN's first sale of logos to corporate sponsors. The precedent was established in 1992 by U.N. Earth Summit Secretary General Maurice Strong, who created an "Eco-Fund," to help finance that event. The Eco-Fund franchised rights to the Earth Summit logo to big polluters such as ARCO, ICI and Mitsubishi group member Asahi Glass.10 Today Mr. Strong is a member of the GSDF Steering Committee.11

The UNDP's motivation may also be misplaced. In a memo to his Regional Bureau Directors in June 1998, UNDP Administrator Gus Speth stated: "The main beneficiary of our success will be our country offices that will be able to use the [facility] as direct support..."12

The UNDP, like the rest of the United Nations, is suffering from serious budgetary contraints. This is due in part to the U.S. government's failure to pay its back dues which makes income from private corporations increasingly attractive.


Poverty Alleviation and the "Free Market"

The vision behind this new UNDP project is also problematic. The purpose of the 2B2M/GSDF project, in the UNDP's own words, is to "create sustainable economic growth and allow the private sector to prosper through the inclusion of two billion new people in the global market economy."13 In other words, the UNDP is claiming that the lives of the world's poorest 2 billion people can or will be improved by drawing them into a ruthless world economic system dominated by a few hundred giant corporations, including some GSDF sponsors.

Yet the most pressing needs of the world's poorest citizens are in arenas of little or no interest to global corporations: the provision of basic health, education, and food resources.14


"The pressing needs of the world's poorest are in arenas of little interest to global corporations."


Corporations have shunned these areas because poor people, by definition, have little disposable income and because providing clean water, new classrooms and sufficient food rarely yields a profit. The poverty of this group is graphically illustrated in the latest UNDP Human Development Report, which calculates that the world's poorest 2.5 billion people have a collective income roughly equal to the collective wealth of the world's richest 225 billionaires.15

Furthermore, global corporations' activities -- including those of companies which have agreed to participate in the UNDP joint venture -- are frequently at odds with the goals of "sustainable human development."16 For instance, UNDP partners such as Rio Tinto and StatOil have consistently polluted local food and water sources, undermining traditional communities, economies, ecosystems and cultures around the world. (see box)

Transnational corporations and the globalization process they lead frequently extract wealth from communities and countries, resulting in severe social, economic, human rights and environmental costs. Meanwhile, the basic needs and desires of the world's poor -- the two thirds of the global population marginalized from the global economy -- are often diametrically opposed to the corporate imperatives to maximize profits and accumulate wealth and power.


UN Governance and Shareholder Value

The proposed UNDP "joint ventures"17 with global corporations raise fundamental questions about the United Nations' governance structure and the UNDP's primary mission of alleviating poverty.

UN agencies operate based on the participation of governments. Non-governmental actors are accorded observer status. The proposed collaboration would create a separate legal entity, the Global Sustainable Development Facility, which would be mostly funded by participating corporations. According to the UNDP, the GSDF would "be primarily governed by the participating corporations."18

Hence, a quasi-UN facility whose goal purports to be "sustainable development," would be governed by corporations whose bottom-line goal is private profit for shareholders. Indeed, a corporate-run GSDF raises the specter of UNDP programs and priorities increasingly serving corporate shareholder interests rather than those of the poor. This is a sharp departure from the original intentions of the United Nations and of the UNDP in particular.

The UNDP apparently sees no conflict, asserting, with no substantiation, that "in the long term, a strong relationship exists between sustainable human development and the growth of shareholder value."19


The UN and Corporations: Which Future?

"Our expanding relationship is part of a trend that holds great promise for global peace and prosperity: the growing awareness that the goals of the United Nations and the goals of business can and should be mutually supportive. In today's interdependent world, the United Nations and the private sector need each other."

UN Secretary General Kofi Annan20

In the past year the United Nations Secretary General, Kofi Annan has positioned the UN to develop a close working relationship with the world's largest transnational corporations, via the International Chamber of Commerce (ICC) and other business associations.

The spirit of this growing collaboration is embodied by a joint statement the UN and ICC issued after Annan met with 25 corporate leaders and ICC representatives including those from Coca Cola, Unilever, McDonalds, Goldman Sachs and Rio Tinto in early 1998. It is based in the belief that the broad global, political and economic changes of the last decade "have opened up new opportunities for dialogue and cooperation between the United Nations and the private sector." It is also founded in the vision that "there is great potential for the goals of the United Nations -- promoting peace and development -- and the goals of business -- creating wealth and prosperity -- to be mutually supportive."21 It is in this broader context that the UNDP Global Sustainable Development Facility has been devised and is evolving.22


"Kofi Annan has challenged business leaders to build globalization with a human face."


Recently, in February 1999, at the World Economic Forum in Davos, Switzerland, the Secretary General called on business leaders and the United Nations to "initiate a global compact of shared values and principles."23 The Secretary General's challenge to business leaders represents an important step in pressing transnational corporations to adhere to universal values defined by the United Nations in the areas of human rights, labor rights and the environment. The Secretary General also suggested that corporations encourage governments to give the UN the resources and authority to monitor the progress toward these internationally agreed upon values.

However, the Secretary General's hopeful vision fails to address a fundamental divide: that between the interests of global corporations and the multilateral trading system they have been instrumental in devising on the one hand, and the interests of the world's poor, the environment and democratic institutions on the other. The growing concentration of wealth and power in the hands of fundamentally undemocratic global corporations and other institutions of globalization clashes with the overriding purpose of the United Nations to enhance human dignity and the capacity for self-governance.

This conflict of interest was most recently illustrated when the United States government sabotaged the Biosafety Protocol of the Convention on Biological Diversity, negotiated under UN auspices. Prioritizing the interests of the US biotechnology industry and the multilateral trading system over those of the global environment and human health, the US worked with five allies to torpedo an international agreement sought by the rest of the world. "There were two compromises that we were not prepared to make," said US delegate Rafe Pomerance. "One is to tie up trade in the world's food supply. The second is to allow this regime, without a lot of deliberation, to undermine the WTO [World Trade Organization] trading regime." 24


Human Rights, Corporations and the UN

This conflict between corporate interests and sustainable human development has been documented by the UN's own Commission on Human Rights, particularly through its Sub-Commission on Prevention of Discrimination and Protection of Minorities.25

In fact, in August, 1998 the Sub-Commission resolved to establish a working group to examine the impacts of transnational corporations on a broad spectrum of human rights issues.26

At the same meeting, the Human Rights Sub-Commission also adopted a significant resolution entitled "Human Rights as the primary objective of trade, investment and financial policy," which asserted that already established international human rights laws and covenants should be reflected in and inform international and regional trade and investment agreements.27


"A UN Sub-Commission is examining the human rights impacts of transnational corporations and globalization. The US wants to eliminate the Sub-Commission."

--

In many respects the UN is at a crossroads. It could follow the path being forged by the GSDF initiative -- a project which represents what may be a worst case example of the potential outcome of the "Global Compact" proposed recently by the Secretary General in Davos. Meanwhile, the Human Rights Sub-Commission illuminates a different trail which the UN could blaze, one which would allow it to promote labor, environmental and human rights in this, the age of globalization.

Unfortunately, powerful proponents of the new multilateral trading system, such as the United States oppose the Sub-Commission addressing the relationship between human rights and globalization. Or as US Ambassador Betty King told the General Assembly recently, the US did not agree that "international macroeconomic policy-making, globalization and debt relief were proper subjects for consideration in this forum.28

In fact the US, which has called on the UN to eliminate the Sub-Commission entirely, is also one of the main forces behind a move that may substantially diminish the independence and the ability of the Sub-Commission to take on these important issues.29 The proposals by the governing board of the Sub-Commission would, among other cutbacks, reduce its meeting time from 4 weeks to 2, thereby drastically diminishing its capacity to have any substantive debates, or do other useful work. The proposed changes would also eliminate the Sub-Commission's country focus and its ability to issue resolutions, limiting its scope to preparing reports for the Human Rights Commission and depriving it of one of its most important functions. According to experts, when taken together these changes "will diminish substantially the role currently played by one of the few independent human rights bodies within the United Nations."30


Political and Economic Realities

A partial explanation for the UN's stepped-up efforts to wed corporate interests to its own may be found in the precarious economic and political position that the inter-governmental body finds itself, especially with respect to the United States government.31 While the U.S. continues to withhold US$1.6 billion it owes, the UN appears to be hoping that the International Chamber of Commerce (ICC) may be an effective lobbyist on its behalf. As the United Nations Department of Public Information (UNDPI) puts it: "Business is building support for the UN, recognizing that diminishing the Organization's role or its capacity to act because of budgetary restrictions only means that the world will be less able to address globalization effectively."32

Indeed, just three months after Mr. Annan and the ICC issued their joint statement, the ICC went to bat on behalf of the UN. As the UNDPI reports, the ICC advised the Heads of State of the G8 -- the major industrialized countries -- that "the UN and other intergovernmental organizations 'require sufficient resources and more authority' to handle complex global problems."33


Institutionalizing a Trend

The Secretary General's burgeoning relationship with transnational corporations does not come out of the blue. Rather it is the latest step in a process that in many respects began in 1992.


"With the US as a deadbeat donor, the UN may be looking to corporations to help fill the gap."


It was then that Boutros Boutros Ghali, the U.N. Secretary General at the time, drastically downsized the U.N. Centre on Transnational Corporations (UNCTC), which had been set up to help developing countries negotiate more effectively with large corporations and to monitor their investments -- including social and environmental impacts. It was downsized into a unit of the UN Conference on Trade and Development and its orientation was shifted to facilitate corporate access to developing countries. Eliminating the UNCTC had long been an objective of the United States, as well as some of the U.N.'s most vocal critics, such as the U.S.-based right wing think tank, the Heritage Foundation.34

The virtual elimination of the UNCTC coincided with a series of events related to the U.N. Conference on Environmental and Development (UNCED) or Earth Summit. While the UNCTC had been slated to submit a series of recommendations to UNCED on addressing corporate activities, its submissions were never accepted and circulated to delegates. Rather, the official submission came from a new entity created at the behest of Earth Summit Secretary General, Maurice Strong: the Business Council for Sustainable Development (BCSD). Today, Bjorn Stigson, President of the reconstituted World BCSD (WBCSD) is a Senior Advisor to the GSDF project.35

The BCSD was made up of the CEOs of some of the world's most powerful corporations. Together with the ICC, the BCSD made sure that most every reference to transnational corporations -- some of the world's most environmentally destructive entities -- in the Earth Summit texts referred to self-regulation rather than any other mechanism to control their activities.36 While many non-governmental organizations were critical of this approach, the ICC and others were extremely pleased with the results. As Jan-Olaf Willums and Ulrich Goluke write in the ICC's 1992 book From Ideas to Action:

In general, the feeling among business participants was that the substantive output of UNCED was positive. It could have taken a negative stance on "market forces" and the role of business, and there was at one time the real possibility that the conference might be pushed to lay down detailed guidelines for the operations of transnational corporations. Instead, it acknowledged the important role of business...
National governments have now begun to formulate their own policies and programs in accordance with commitments given in Brazil. We expect that these national laws and regulations will not be as stringent, bureaucratic and 'anti-business' as some feared before UNCED.37

In addition to the Earth Summit experience, other instances of corporate influence in the United Nations include:

  • Undue corporate influence at the ongoing negotiations of U.N.- sponsored international treaties and conventions to protect the global environment such as the Montreal Protocol to Protect the Ozone Layer, the Kyoto Protocol to the Climate Convention and the Biodiversity Convention. In each and every one of these international meetings, corporate lobbyists, their industry associations and public relations firms have aligned themselves with governments resisting these treaties and have aggressively attempted to undermine other governments' efforts to address such pressing global environmental problems.38

  • Reports of growing corporate efforts to influence the International Labour Organisation and the World Health Organisation by manipulating scientific standards and information.39

  • A November 1997 workshop aimed at supporting women's participation in sustainable development co-sponsored by the Nestlé Corporation and the UN Department of Social and Economic Affairs. Held at Nestlé's offices in Lausanne, Switzerland, and paid for primarily by Nestlé, the "UN" workshop came under criticism from the International Baby Food Action Network (IBFAN), which has been investigating the marketing practices of the baby food industry for 17 years. IBFAN has documented that Nestlé is the most systematic corporate offender of the UN's International Code of Marketing Breastmilk Substitutes. The code was created to promote breast feeding in developing countries in order to protect children from malnutrition, disease and death.40

  • The United Nations Conference on Trade and Development (UNCTAD) recently launched the "Partners in Development" initiative, which aims to strengthen "strategic" partnerships between governments and corporations through specific projects.41 The ICC and UNCTAD have also agreed to create a series of business investment guides to the least developed countries. The aim of these guides is to increase corporate investment in the world's poorest nations.42 And UNCTAD is engaging in "close cooperation with the ICC in helping countries to formulate competition and consumer protection law and policy."43

The UN also recently launched a "one stop shop" website which documents what the UN considers positive interactions with corporations, and provides a starting point for corporate web users to explore how they might collaborate with various UN agencies.44


Conclusion

At a moment when the gap between rich and poor countries and people is growing, it would be a grave disservice to the goal of sustainable development for a key United Nations agency to have its agenda diverted by an exercise that is likely to primarily benefit the public images and bottom lines of several global corporations.

While the Secretary General calls for giving "a human face to the global market," efforts such as the UNDP's GSDF project may only serve to mask the unfortunate nature of the core activities of many of these transnational companies. Indeed, the GSDF initiative represents a worst case example of the potential outcome of the "Global Compact" proposed recently by the Secretary General in Davos.

Furthermore, if the United Nations in general, and the UNDP in particular, increase their collaborative relationships with transnational corporations and their industry associations, they will become increasingly reluctant to criticize these entities which are central players in many of the human rights, environmental and development dramas unfolding every day across the globe.45

One could argue that this is already occurring. For instance, the International South Group Network recently launched a critique of UNDP's 1998 Human Development Report on consumption. This critique accuses the UNDP of "shielding the very forces that create impoverishment in the South." According to the South Group, "the Report avoids carefully the issue of production and how it is linked with consumption and the inexorable need for corporate profits."46


"UNDP should call off its GSDF project."


In recent years, many public institutions in the United States and elsewhere have turned to the private sector for support as government funds have become increasingly scarce. In turn, they have often fallen silent when they might otherwise be criticizing questionable corporate practices. Indeed, the overall free market agenda of shrinking governments in favor of "market-based" solutions pushes increasing numbers of public entities into dependence on transnational corporations whose interest is to maximize profits for shareholders. This dynamic casts the United States' US$1.6 billion default on its obligations in an interesting light.

It is certainly a sign of the times that the United Nations is flirting with corporate collaboration. But this perilous partnership is distressing on many levels. At a moment when institutions such as the World Trade Organization are being granted unprecedented political and economic power, the United Nations stands as one of the last bastions with the moral authority and political potential to subordinate socially and ecologically blind market forces to human and environmental rights and needs.

Today, the UN finds itself at a crossroads, needing to find a way to inject itself more forcefully into the debate about globalization. But to base that intervention on misguided initiatives such as the GSDF is a step in the wrong direction. By equating the goals of business with the goals of the United Nations, by asserting that corporate profits and the growth of shareholder value go hand in hand with sustainable human development, the United Nations threatens to undermine both its credibility with the public and its ability to address poverty, human rights and environmental destruction around the world.


"Secretary General Annan should rethink his alliances with global corporations."


The potential evisceration of the Sub-Commission on Human Rights represents another step in the wrong direction. The work of this UN group could well help identify ways in which the ravages of the so-called "free market" can be subordinated to the imperatives of human rights, environmentally sustainable and socially equitable development, the rights of women, indigenous people and of the poor.

The United Nations can and should serve as a counterbalance to unrestrained globalization. It should be monitoring the human rights and environmental impacts of corporations in developing and industrialized countries, while helping to build truly effective and enforceable mechanisms of international accountability. It should not be building collaborative projects with corporations which are the architects of a system that is usurping the UN's authority, and which are the perpetrators of human rights and environmental problems which so hinder sustainable human development.

Once again, the United States government must be singled out for aggravating the problem. And it is with a change in the United States' behavior and attitude toward the United Nations that a solution must necessarily begin. The U.S. must pay the dues it owes while refraining from using its financial clout in an attempt to impose its own policies on the UN -- be they economic, political or military.

At the same time, UNDP should call off its GSDF project, and in doing so, preserve the credibility of its mission to serve the world's poor.

Similarly, Secretary General Annan should re-examine his expanding alliances with global corporations, while paying particular attention to maintaining the ability of the Human Rights Commission to address the impacts of transnational corporations and globalization. By taking these steps the United Nations could maintain its position at the center of efforts to help build a future where human rights, labor rights and the environment come first.



UNDP's Corporate Sponsors

The global corporate sponsors and Steering Committee members of the UNDP's Global Sustainable Development Facility include several companies whose activities have come under public scrutiny for human rights, environmental, labor and development abuses. Many are working at cross purposes to the goals of UN programs, treaties and conventions.

ABB (Sweden-Switzerland): ABB's President and CEO Goran Lindahl sits on the GSDF Steering Committee. ABB is a global power generation corporation that claims to be a world leader in responding to environmental problems. But the Swiss-Swedish corporation specializes in building and operating nuclear, fossil fuel and hydroelectric power plants. ABB has faced sustained campaigns against its involvement in various hydro projects, including the Three Gorges Project in China and the now indefinitely postponed Bakun Dam in Malaysia. In the latter case, Malaysian NGOs and over 200 international environmental and human rights groups expressed their "strongest objection against the involvement [of ABB] in the implementation of Bakun dam." ABB also has the contract for the Ilisu hydropower project on the Tigris river in Turkey; critics claim the project violates core provisions of the 1997 UN Convention on the Non-Navigational Uses of Transboundary Watercourses.

Concerns over ABB's involvement in dams has led to ABB being excluded from the portfolios of almost all ethical investment funds in its home country—Switzerland. What's more, while it claims to be a "clean technology company," ABB has been repeatedly fined for pollution in Poland. It is marketing energy systems such as nuclear power and a new coal technology which emits almost as many global warming gasses as traditional coal fired plants. Meanwhile, ABB appears to have rejected developing more sustainable renewable energy paths such as solar.47

Citibank (USA): Citibank touts itself as the new financial supermarket of the world; its proposed merger with Travellers will create a company that sells financial services to roughly 100 million people. Yet none of these 100 million come from the world's poorest 2 billion, nor are they likely to anytime soon. Citicorp was one of the top U.S. lenders to the Asian nations that fell into financial crisis in 1997.48 Six U.S. banks had over US$19 billion in loan exposure to Thailand, the Philippines, Indonesia and Korea at the time the crisis broke in mid-1997. Critics charge that much of this lending was done recklessly, since the banks knew that if the loans went bad, bailouts were likely. Indeed, the U.S. Treasury department worked closely with the IMF to orchestrate massive bailouts to the tune of US$121 billion, much of which went to repay U.S. banks and other financial institutions. Although Citicorp played a role in the crisis that threw millions of workers out of work, the bank's CEO did very well in 1997. Top executive John Reed earned US$4 million in salary and bonus, a 15% increase over 1996.49

Citicorp was also a leading lender to developing countries in the 1960s and 1970s, leading up to the Third World debt crisis. Many of its loans- such as those for the Westinghouse nuclear power plant in the Philippines - funded wasteful, unnecessary projects where the world's poorest people ended up repaying debts incurred by corrupt, unaccountable governments. Citibank has also made headlines over the past two years as the bank which served as a conduit for millions of dollars of drug money moved by Raul Salinas (brother of the former Mexican president) from Mexico to Switzerland.50

Dow Chemical (USA): Dow's Director and former Vice President David Buzzelli sits on the GSDF steering committee. Dow is the second largest chemical company in the US. It is, by far, the world's leading producer of chlorine, and one of the world's largest pesticide corporations. In the past it has produced such notorious chemicals as DDT, Agent Orange and ingredients for napalm. As a chlorine producer, Dow Chemical is probably the world's largest root source of dioxin—a chlorine byproduct closely associated with reproductive disorders, birth defects, increased rates of cancer, and endocrine disruption. Dow has used its economic and political power to influence scientific and public opinion about dioxin, and to shape legislation and regulation. Dow has regularly exported pesticides unregistered in the U.S. for use in developing countries.51

Rio Tinto Plc. (UK): This British mining giant is notorious for having an entire international network dedicated to fighting its abuses. Labor unions, indigenous peoples, church groups, community activists and aid agencies from around the world have repeatedly criticized Rio Tinto for attempting to pressure people into accepting inequitable and environmentally destructive mining projects. Legal wrangles over compensation for loss of land, pollution, workers' health and safety, and the destruction of culturally important sacred sites are a few examples of the many problems Rio Tinto faces in its relations with communities around the world. The most serious indictment against Rio Tinto is that the company has allowed, or even actively collaborated in, the denial of basic human rights enshrined in international conventions. Rio Tinto has passively accepted the intervention of the military or police using brutal and repressive actions to quell legitimate protest against some of its mining operations.

For instance, the company stands accused of complicity in or direct violations of environmental and human rights at the Grasberg mine in Irian Jaya, Indonesia, at the Rossing uranium mine in Namibia, in a major mining project in Madagascar, and of trade union rights in Australia.52

StatOil: Norway's state-owned oil company is the largest industrial corporation in the country, and is active in thirty-eight nations. In spite of being owned 100% by the government, Statoil operates more or less independently. For instance, StatOil recognizes seven ILO conventions, while the Norwegian government recognizes 100. Among those that the company refuses to recognize is ILO 169 on indigenous peoples and landrights. At home, Statoil finds itself in several environmental conflicts, including over plans to build two natural gas plants with low energy efficiency; these plants would increase the country's C02 emissions by 5%. Under the UN's Kyoto Protocol, Norway is committed to stabilizing its C02 emissions, with only a 1% increase by the year 2012. Abroad, the company is in conflict with local populations around impacts of its drilling operations on Lake Maracaibu, Venezuela, and off the coast of an area inhabited by the indigenous Nenets people in Russia. Its refinery in Melaka, Malaysia has caused a series of bitter conflicts with the local population. In Nigeria the company has done nothing to promote any kind of democratization, but rather has benefitted, together with other transnational oil corporations, from its relationship with the ongoing dictatorship there. StatOil operates in East Timor, accepting the Indonesian occupation there.53

GSDF Corporate Sponsors not profiled here:

AT&T (USA); Owens Corning (USA); Cultor Corporation (Finland); ESKOM (South Africa); Telia AB (Sweden); IKEA International (Sweden); LM Ericsson (Sweden)



Endnotes

1 "The Global Sustainable Development Facility: 2B2M," internal document, The United Nations Development Programme, New York, July 1998.

2 Memorandum to Regional Bureau Directors from James Gustave Speth, UNDP, New York, June 15, 1998. The US$50,000 figure comes from Personal Communication with Ward Morehouse, Council on International and Public Affairs, re: October 28, 1998 meeting with UNDP Functionaries," November 3, 1998; it was reconfirmed in an author's telephone interview with Henry Jackelen, Director, Private Sector Development Programme, UNDP, February 23, 1999.

3 "The Global Sustainable Development Facility: 2B2M," p. 2.

4 Ibid.

5 For instance see Letter to Mr. James Gustave Speth, UNDP Administrator from Owen Lammers, Executive Director, International Rivers Network endorsed by NGOs in sixteen countries, June 22, 1995. This letter addresses the potential mal-effects of a number of UNDP supported infrastructure projects, in the Lower Mekong Basin (Laos, Thailand, Cambodia and Vietnam), in South America -- the Hidrovia Project (Brazil, Bolivia, Paraguay, Argentina, Uruguay) and the Tumen River Area (North Korea, South Korea, China, Russia and Mongolia); and "Human Development: Consumption Related to System of Production, A Critique of the Human Development Report," the International South Group Network, in The Progressive Response, Interhemispheric Resource Center and the Institute for Policy Studies, Silver City and Washington DC, Vol. 2, No. 29, September 10, 1998.

6 "The Global Sustainable Development Facility: 2B2M," p. 2.

7 Author's telephone interview with Henry Jackelen, UNDP, February 23, 1999.

8 "The Global Sustainable Development Facility: 2B2M," p. 2.

9 Kenny Bruno and Jed Greer, Greenwash: The Reality Behind Corporate Environmentalism, Apex Press/Third World Network, New York and Penang, 1997; Joshua Karliner, The Corporate Planet: Ecology and Politics in the Age of Globalization, Sierra Club Books, San Francisco, 1997, pp. 168-196.

10 Joshua Karliner, The Corporate Planet, p. 172; Thomas Harding, Danny Kennedy and Pratap Chatterjee, Whose Summit Is It Anyway? An Investigative Report on the Corporate Sponsorship of the Earth Summit, Rio de Janeiro: ASEED-International Youth Network, June 1992.

11 Interoffice Memorandum from Elmi Watanabe, Assistant Administrator and Director, Bureau for Development Policy, UNDP, New York, July 12, 1998.

12 Memorandum to Regional Bureau Directors from James Gustave Speth, June 15, 1998.

13 "The Global Sustainable Development Facility: 2B2M," p. 1.

14 See Richard J. Barnet and John Cavanagh, Global Dreams: Imperial Corporations and the New World Order, Simon and Schuster, New York, 1994; and "The relationship between the enjoyment of human rights, in particular, international labor and trade union rights, and the working methods and activities of transnational corporations," Commission on Human Rights, Sub-Commission on Prevention of Discrimination and Protection of Minorities, 24 July 1995, E/CN.4/Sub.2/1995//11 or http://www.unhchr.ch/html/menu4/subrep/95sc11.htm

15 UNDP, Human Development Report 1998, Oxford University Press, New York, 1998, p. 30.

16 For instance see "The relationship between the enjoyment of human rights..." paragraphs 25-35; Richard J. Barnet and John Cavanagh, Global Dreams; Joshua Karliner, The Corporate Planet.

17 UNDP Administrator Gus Speth calls the projects to be carried out under the GSDF "joint ventures." Memorandum to Regional Bureau Directors from James Gustave Speth, June 15, 1998.

18 "The Global Sustainable Development Facility: 2B2M," p. 2.

19 Ibid. p. 1.

20 "UN and private sector need each other _ Kofi Annan" ICC Business World, International Chamber of Commerce, September 23, 1998 http://www.iccwbo.org/Business_World/1998/UN_and_private_sector.htm

21 "Cooperation Between the United Nations and Business: Joint Statement on Common Interests By the Secretary-General of the United Nations and the International Chamber of Commerce," ICC Business World, International Chamber of Commerce, New York, February 9, 1998. http://www.iccwbo.org/html/Cooperation%20Between%20the%20UN.htm

22 Memorandum to Regional Bureau Directors from James Gustave Speth, June 15, 1998.

23 Secretary-General Proposes Global Compact on Human Rights, Labour, Environment in Address to World Economic Forum in Davos, United Nations Press Release, SG/SM/6881, 1 February 1999. http://www.un.org/partners/business/sgstate.htm

24 Andrew Pollack, "U.S. and Allies Block Treaty on Genetically Altered Goods" The New York Times, February 25, 1999.

25 See "The relationship between the enjoyment of human rights, in particular, international labor and trade union rights, and the working methods and activities of transnational corporations," Commission on Human Rights, Sub-Commission on Prevention of Discrimination and Protection of Minorities, 24 July 1995, E/CN.4/Sub.2/1995//11 or http://www.unhchr.ch/html/menu4/subrep/95sc11.htm

26 The resolution calls for a working group "to examine the effects of the working methods and activities of transnational corporations on the enjoyment of economic, social and cultural rights and the right to development, as well as civil and political rights." See "The relationship between the enjoyment of economic, social and cultural rights and the right to development, and the working methods and activities of transnational corporations" United Nations High Commissioner for Human Rights, Sub-Commission resolution 1998/8, August 20, 1998. http://www.unhchr.ch/html/menu2/2/50sub/s50main.htm

27 "Human Rights as the primary objective of trade, investment and financial policy," United Nations High Commissioner for Human Rights, Sub-Commission resolution 1998/12, August 20, 1998 http://www.unhchr.ch/html/menu2/2/50sub/s50main.htm; also see Miloon Kothari and Peter Prove, "A UN Human Rights Response to Globalisation," Third World Resurgence, December 1998/January 1999.

28 Thalif Deen, "US 'No' to Development as a Basic Human Right," Inter Press Service published in Third World Resurgence, December 1998/January 1999.

29 Author's interview with a member of the Sub-Commission who wished to remain anonymous. February 23, 1999.

30 "UN Sub-Commission on Human Rights" Human Rights Advocates, Winter 1998, Vol. 32; David Weissbrodt, Mayra Gómez, and Bret Thiele, Highlights of the 50th Session of the United Nations Sub-Commission on Prevention of Discrimination, Journal of Law & Inequality - (forthcoming 1999)

31 For a discussion of the relationship between the US and the UN see, Phyllis Bennis, Calling the Shots: How Washington Dominates Today's UN, Olive Branch Press, Interlink Publishing, 1996.

32 "The UN and Business: A Global Partnership," United Nations Department of Public Information, June 1998. http://www.globalpolicy.org/reform/un-bus.htm

33 Ibid.

34 Tom Athanasiou, Divided Planet: The Ecology of Rich and Poor, Little, Brown, New York, 1996, pp. 198-201.

35 Ibid., and Joshua Karliner, The Corporate Planet, pp. 52-57.

36 Ibid.

37 Jan-Olaf Willums & Ulrich Goluke, From Ideas To Action: Business and Sustainable Development, The Greening of Enterprise 1992, International Environmental Bureau of the International Chamber of Commerce, Norway, May 1992, pp. 20-21.

38 For an overview see, Joshua Karliner, The Corporate Planet, pp. 50-57; various sources on the climate issue exist, for a diversity of resources see http://www.corpwatch.org/feature/climate, and for a comment by Tim Wirth when he was with the Clinton administration see: John H. Cushman, Jr., "U.S. Will Seek Pact on Global Warming" The New York Times, July 17, 1996; on corporate meddling in the Montreal Protocol's efforts to phase-out methyl bromide see Joshua Karliner, Alba Morales, Dara O'Rourke, The Bromide Barons: Methyl Bromide, Corporate Power and Environmental Justice, Political Ecology Group/Transnational Resource & Action Center, San Francisco, May 1997, pp. 18-21; on corporate influence in the Commission on Sustainable Development regarding the biotechnology issue see "UN Accused of Industry Bias on Biotech" Third World Resurgence, no. 58, Penang, June 1995 and on the Biosafety Protocol to the Biodiversity Convention see Andrew Pollack, "Setting Rules for Biotechnology Trade," The New York Times, February 15, 1999.

39 Barry Castleman and Richard Lemen, "The Manipulation of International Scientific Organizations," Third World Resurgence, No. 95, Penang, July 1998.

40 The report on the meeting, "Mechanisms of Support to Women's Participation in Sustainable Development" whose objective was "to provide a forum to identify and promote viable mechanisms for private sector support of women's participation in sustainable development" was reported on by IBFAN, "Nestle and the United Nations: Partnership or Penetration?" Corporate Europe Observer, Issue 1, Amsterdam, May 1998. http://www.xs4all.nl/~ceo/observer1/nestle.html

41 Reshma Prakash, "UN to Broker Alliances Between Corporations and Poor Nations," Earth Times News Service, November 5, 1998.

42 "Corporate Takeover of the United Nations Continues..." Corporate Europe Observer, Issue 1, May 1998. http://www.xs4all.nl/~ceo/observer1/un.html

43 UNCTAD document cited in "The Geneva Business Dialogue: Business, WTO and UN -- Joining Hands to Regulate the Global Economy?" Corporate Europe Observer, Issue 2, October 1998. http://www.xs4all.nl/~ceo/observer2/gbd.html

44 See http://www.un.org/partners/business/

45 For a discussion of the dangers of corporate giving to the UN, see Phyllis Bennis, "Turner's Gift To UN Has a Downside," The Baltimore Sun, September 28, 1997.

46 "Human Development: Consumption Related to System of Production, A Critique of the Human Development Report," the International South Group Network, in The Progressive Response, Interhemispheric Resource Center and the Institute for Policy Studies, Silver City and Washington DC, Vol. 2, No. 29, September 10, 1998.

47 Nicholas Hildyard, High Risk -- Low Return? ABB's Hydropower Strategy Under Review, The Berne Declaration, Zurich, February 5, 1998; Peter Bosshard, "Ilisu -- A Test Case of International Policy Coherence" The Berne Declaration, Zurich, November 1998; Kenny Bruno and Jed Greer, Greenwash, pp. 203-209.

48 Data from the Congressional Research Service, drawn from the data of the Federal Financial Institutions Examination Council.

49 Citicorp, corporate proxy statement, 1998.

50 "Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering," Month in Review, United States General Accounting Office, December 1998.

51 Jack Weinberg et. al., Dow Brand Dioxin, Greenpeace, Washington DC, 1995; Kenny Bruno and Jed Greer, Greenwash, pp. 71-79.

52 Rio Tinto Tainted Titan: The Stakeholders Report 1997, The International Federation of Chemical, Energy Mine and General Workers Union, Brussels, 1997. http://www.icem.org/

53 English language version of the Executive Summary of a report on StatOil by NorWatch, http://www.ngo.grida.no/ngo/fivh/norwatch/index.htm



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