• The UN Rapprochement With the Private Sector – A Dangerous and Undemocratic Orientation

  • By Chloé Maurel | 16 May 13
  • For some decades now increasingly intimate connections have been developing between the United Nations and the private sector. While it would seem logical that the UN, a worldwide and universal body, should control the multinational firms, who by definition escape state regulation, this is not the direction which this world institution has been going in the last few years.

    Already in 1992, the UN’s draft Code of Conduct on Transnational Corporations (TNC), drawn up in 1982 and which was to see to it that ‘the TNFs observe the rights of people and the fundamental freedoms in the countries where they are carrying out their activities’,1 was abandoned, and the United Nations Centre on Transnational Corporations (UNCTC), charged with acting to this function, disappeared under pressure from the United States. This marked the end of the UN’s aim of regulating the activities of TNCs.

    This aim had first appeared in the 1970s in the context of an awareness of the abuses committed by these firms and the scandals that had been revealed (like the revelation of ITT’s involvement in the 1973 coup d’état in Chile). In the same spirit, in 1977 the UN’s International Labour Organisation (ILO) adopted a Declaration of Tripartite Principles Concerning Multinational Enterprises and Social Policy. Although this lacked any binding force, it did aim at controlling and supervising the social policies of TNCs.

    However, since the 1990s the UN’s attitude to multinational firms is no longer characterised by a wish to supervise them; rather, the wish is one of partnership. Yet this partnership, to the extent that it has been put into effect, seems much more favourable to the corporations than to the UN’s ­values.

     

    Neoliberal orientation

    By 1996, then UN General Secretary Boutros Boutros-Ghali conveyed to the Davos World Economic Forum his desire ‘to associate the multinational firms more closely with international decisions’. His successor Kofi Annan went still more strongly in this direction. The development of the UN towards liberal economic orientations was clearly illustrated by Kofi Annan’s report ‘The Entrepreneurial Spirit and Privatisation in the Service of Economic Growth and Lasting Development’ (1998).

    In July 2000, Kofi Annan launched the United Nations Global Compact.2 This project was intended to give transnational corporations (described as ‘privileged partners for development’) a central place within the United Nations in exchange for their commitment to observe ten principles based on human rights, working standards, the fight against corruption and respect for the environment.3 Indeed, Kofi Annan felt that the private sector should have a role within the United Nations virtually equivalent to that of the states. However, we should recall that the words ‘enterprise’, ‘firm’ or ‘corporation’ do not appear in the UN Charter or in the Universal Declaration of Human Rights. Despite this, the UN established a partnership with the Davos World Economic Forum, enabling a growing involvement of big multinational companies in regulating world affairs. The report of the UN High Commission for Human Rights ‘Business and Human Rights’ (2000) takes the same line, affirming the idea that business and human rights are mutually reinforcing, even going so far as to recommend privatisation of the management of human rights. This trend has continued under the present General Secretary Ban Ki Moon.

    The Global Compact project, which today brings together 7,000 firms from 133 countries, has justifiably aroused strong criticism from social NGOs and civic movements, which have decried this partnership as a fools bargain. Indeed, this partnership does not fall within the scope of any clear legal framework. If, on paper, a mechanism to control these firms linked to the UN has been established (leading, it is true, to the debarring, as of 2008, of over 600 firms that did not communicate their observance of the ten principles of the Global Compact4), no rigorous mechanism has been provided for controlling these firms’ observance of their commitments – they are merely supposed to make an annual report. In many respects, partnership seems largely intended to give the TNCs the means of increasing their power and an opportunity for improving their public image. In fact, the United Nations exerts no control over the way the transnational signatory firms carry out this compact. Nevertheless, the firms can use the UN Global Compact logo (subject to approval by the Global Compact office). In effect, the Global Compact actually blocks the development of effective standards of social responsibility for firms.

    Besides the Global Compact, it is also through ad hoc partnerships set up between UN institutions and firms that the gradual erosion of the United Nations by the private sector is taking place. Take UNESCO for example, the UN’s educational, cultural and scientific organisation. It has developed a partnership with Oréal for awarding prizes to women scientists; with the MacArthur Foundation for a programme on the natural heritage; with DaimlerChrysler in the context of the Mondialogo programme, which promotes intercultural dialogue; with Samsung for a programme on the material cultural heritage; with Microsoft in the framework of a programme of world economic and social development; with Proctor and Gamble and Nokia for educational programmes … not to mention the partnership between UNESCO and the Gems network — a firm that federates private schools worldwide and promotes private education.5

     

    Partnership with TNC

    Thus, in its partnership with Nokia, the company supplies mobile telephones to African populations that have just become literate. To offset the lack of reading materials for the newly literate, UNESCO’s educational programme sends them reading exercises by SMS, to which they have to reply, also by SMS. While the effectiveness of this has not been proven, it seems that it essentially enables Nokia to unload its old telephones and get good publicity. Similarly, the partnership with Procter and Gamble has enabled this firm to place the UNESCO logo on its packets of sanitary napkins sold in the West in exchange for supplying sanitary napkins to young African girls, enabling them to continue to go to school during their periods (traditionally they would stay at home at these times, thus missing their classes).6 These programmes seem attractive at first sight, but in reality the proliferation of such operations, often conceived by the firms themselves, gradually leads to the United Nations relinquishing control of the conceptualisation of its own programmes and to a dissipation of its activities.

    UNESCO’s partnership with the company Gems Education, initiated in 2011, aims at setting up teacher training programmes to cope with the shortage of teachers in developing countries (particularly in Kenya, Ghana and India). However, on the French page of UNESCO’s internet site presenting the project, it is nowhere disclosed that Gems Education exclusively federates private schools and that the programme, therefore, consists of strengthening private schools in developing countries.7 UNESCO’s choosing to strengthen private education at world level is not innocuous or without consequences. In particular, it correlates to the long-standing links between UNESCO and Catholic networks and the Vatican.8

    In the opinion of Qian Tang, who since 2010 has managed the education sector of UNESCO, this proliferation of partnerships between UNESCO and private firms is a good thing for both partners.9 Similarly, the UNESCO annual report on education published at the end of 2012 stresses the importance of financing education by the private sector and praises the activity of private foundations like that of the MasterCard Foundation facilitating the gaining of employment experience by young people.10

    It is true that UNESCO has received grants from some of these enterprises, which have enabled it to have money needed to carry out its programmes, money that is welcome in this period when ordinary budgets are decreasing.11 Nevertheless, is UNESCO, through this, not tending to ‘sell’ itself, selling its name, its ‘brand’, to the companies? Are not UN institutions in danger of being instrumentalised by these firms?

    Moreover, there are whole sections of the management and operations of UN organisations that have tended to be sub-contracted to these firms. The Director General of UNESCO from 1990 to 2009, Kuichiro Matsuaura, set about privatising many sections of the organisation’s activity. Peter Smith, the American whom he appointed Assistant Director General for Education, is responsible for restructuring all the organisation’s educational activities. He has sub-contracted this task to a private American company, Navigant Consulting, which, based in Chicago, had no skills or experience in this field. He nevertheless signed contracts that stipulate generous payments to it , without going out to public tender. In just one year he paid the company 2.15 million dollars. This sub-contracting resulted in considerable waste and breaches of UNESCO’s budgetary rules. As a result, Peter Smith was obliged to resign12. However, the present Director General of UNESCO, Irina Bokova, has maintained this trend, saying she was in favour of public-private partnerships.

     

    Money from the private sector

    This trend is far from only affecting UNESCO. In particular, the WHO has considerable collusion with the private sector. This orientation was encouraged by its executives starting in the 1990s. From the beginning of her term as head of WHO in 1998, Gro Harlem Brundtland encouraged the tightening of links between WHO and the private pharmaceutical laboratories and called for an increase in the financing of the organisation by the private sector. She accordingly directed WHO’s discourse and programmes towards the interests of private actors (as in her January 2001 speech at the Davos World Economic Forum before the CEOs of the biggest transnational firms). ‘We absolutely need private financing. […] Since the American economy is the richest in the world, we must make WHO an attractive system for the US and the financial markets’, pointed out her chief of staff David Nabarro in no uncertain terms.13

    In 2009-2010, the crisis over the H1N1 flu brought to light the links between the WHO and the interests of the pharmaceutical industry. In this ‘crisis’, the WHO acted on the advice of its Strategic Advisory Group of Experts (SAGE), virtually all the members of which had financial links with the private pharmaceutical industry, which casted doubts on their alleged independence. Moreover, representatives of pharmaceutical firms themselves took part as observers in meetings of the SAGE.

    The pandemic alarm issued by WHO is said to have enabled the major pharmaceutical firms to cash in 7.5 to 10 billion dollars of profits. The ‘A flu’ operation was thus a very profitable one for the laboratories.14

    Apart from its management of the ‘A flu’, in many areas of its activity the WHO works closely with the pharmaceutical industry, especially in the area of the struggle against AIDS, which raises the issue of conflict of interests.15

    Thus, is not the United Nations, through the multitude of partnerships set up by UN organisations with private firms (going, sometimes, as far as a veritable sub-contracting of whole sections of their programmes to firms) as well as by the spread of recourse to experts linked to the private sector, in the course of being privatised, in accord with the wishes of the dominant powers?16

    It would seem urgent that the United Nations control the private sector, regulate its social practices (which often leave a lot to be desired) rather than give it an increasingly important place and decision-making powers within the UN at the expense of democratic values. This is indispensable if the UN and its agencies are to properly carry out their important mission of social progress — of which the world has so great a need.

                                                                                     

    Notes

    1. United Nations’ Code of Conduct  on Transnational Corporations, 23 I.L.M. 626 (1984).

    2. http://www.unglobalcompact.org/

    3. See Tagi Sagafi-Nejad, The UN and Transnational Corporations: From Code of Conduct to Global Compact, Bloomington, Indiana University Press, 2008; Thomas G. Weiss and Ramesh Thakur, Global Governance and the UN: An Unfinished Journey, Bloomington: Indiana University Press, 2010.

    4. http://greentechexpert.blogspot.fr/2008/07/630-entreprises-exclues-du-global.html

    5. http://www.gemseducation.com/

    6. Interview with Elspeth McOmish, UNESCO official, 28 November 2012.

    7. http://www.unesco.org/new/fr/media-services/single-view/news/unesco_partners_with_gems_education_to_bolster_teacher_training/

    8. See Chloé Maurel, ‘L’influence du Vatican et des réseaux catholiques à l’Unesco (1945-1974)’, Cahiers d’histoire. Revue d’histoire critique, No.119, April-June 2012, pp. 101-120.

    9. Interview with Qian Tang, 17 December 2012.

    10. Rapport mondial de suivi sur l’Education pour tous 2012 de l’Unesco, Jeunes et compétences. L’éducation au travail, Paris, UNESCO, 2012, p. 547.

    11. Since the admission of Palestine to UNESCO in 2011, the United States has suspended payment of its financial contribution to this organisation, thus depriving it of a major part of its budget.

    12. Gabrielle Capla, ‘The silent revolt to save UNESCO’.  Le Monde diplomatique, September 2009: http://www.monde-diplomatique.fr/2009/09/CAPLA/18155

    13. J.-L. Motchane, ‘When WHO espouses the cause of the pharmaceutical companies’. Le Monde diplomatique, July 2002.

    14. See Chloé Maurel, ‘L’OMS et la gestion des crises et catastrophes mondiales’, Chantiers Politiques, No. 8, June 2010, pp. 116-126.

    15. On this subject, see Auriane Guilbaud, L’insertion progressive des entreprises dans la gouvernance mondiale de la santé. Le cas de la lutte contre le Vih/Sida et les maladies négligées, a doctoral thesis in Political Science, supervised by  Guillaume Devin, Sciences Po, CERI, 2012.

    16. See Collectif, Une autre ONU por un autre monde, Tribord : Brussels, 2010; Anne-Cécile Robert, ‘Qui veut étrangler l’ONU?’, Le Monde diplomatique, February 2012 ; Christian Caubet G., ‘Liaisons dangereuses avec le monde des affaires’, Le Monde diplomatique, September 2005.