The United Nations has finally agreed a complaints procedure to deal
with any allegations that corporate signatories to its Global Compact
might be breaching its underlying principles.
The ‘integrity measures’, which have now been formally endorsed by the
secretary-general Kofi Annan, take effect immediately as part of a
revised governance structure for the five-year-old compact.
Until now any corporate signatory has theoretically been able to flout
the compact’s ten principles on issues such as human rights, bribery
and the environment with impunity – leading to complaints from
non-governmental organizations and some of the 1500 corporate
signatories that it is a boon for ‘free riders’. However, under the new
rules, complaints can now be lodged with the UN Global Compact Office,
which will relay them to the company and can help to remedy any
concerns.
If the company fails to respond satisfactorily, it will be removed from
the signatories’ list and barred from Global Compact activities and use
of the Compact logo until it rectifies the irregularity. Action will
also be taken against signatories that fail, for two consecutive years,
to file an annual report detailing their performance on meeting the
principles. Such offenders will be regarded as ‘inactive’ and will be
publicly identified as such.
The new system could lead to a flurry of complaints from pressure
groups. The US-based Corpwatch NGO, which monitors global companies’
ethical behaviour, has already named six multinationals it alleges have
broken Compact principles, including Aventis and Nike.
The OECD, which in 2000 decided to put in place a process for dealing
with allegations of ‘non-observance’ of its guidelines for
multinational enterprises, says it has since had to deal with more than
100 formal complaints submitted by pressure groups and trade unions to
national contact points.
The new Compact complaints procedure is part of a revised governance
framework to be introduced next year. One aspect of this will be
greater reliance on cash support from signatories rather than the UN
and national governments.
