By Edward Alden in Washington
With the prospects for future trade negotiations still clouded by the Seattle protests, governments and multinational businesses are launching a series of initiatives to try to counter the charge that trade liberalisation has threatened environmental and labour standards.
Under the auspices of the United Nations, 50 of the world's largest corporations this week signed a "global compact" that commits them to support free trade unions, abolish child labour and protect the environment. The signatories included several companies that have been targets for protests, such as Royal Dutch/Shell and Nike.
The initiative comes just a month after the 29 governments of the Organisation for Economic Co-operation and Development signed a new set of guidelines for multinational enterprises. The OECD guidelines beefed up recommendations on how corporations should act to safeguard core environmental and labour standards.
Earlier this year, nearly 36 corporations, including Chevron, General Motors and Procter & Gamble, agreed to abide by the so-called "Sullivan principles" which similarly set standards for responsible social conduct.
John Ruggie, special adviser to Kofi Annan, UN secretary-general, said the initiatives were aimed in part at getting the debate over environmental protection and labour rights out of the World Trade Organisation. "The WTO was never designed and cannot handle being an arbiter of human rights, labour and environmental issues," he said.
The UN global compact was launched by Mr Annan at the Davos summit in January 1999 when he warned the assembled executives that globalisation could face a backlash because global rules for protecting corporate interests had become far more robust than those for safeguarding social standards. If those issues were forced into the WTO, he warned, they could become a pretext for protectionist policies that would hurt developing countries' interests.
In addition to the corporate pledges, the global compact initiative is supported by a smattering of non-governmental organisations. Chris Hailes, international programme director at the World Wildlife Fund in Geneva, said that by coaxing companies into public commitments under UN auspices, they will face greater scrutiny and accountability than previously.
The initiative will require companies to post a yearly update on their progress under the compact, and they will be subject to criticism by NGOs on their performance. In addition, the companies are expected to co-operate with UN agencies on various social projects in the developing countries in which they operate.
But Susan Aaronson, a senior fellow at the National Policy Association in Washington, said the UN action is unlikely to defuse NGO pressure for binding mechanisms to enforce corporate social responsibility. The global compact, she said, "is sincere but totally non-binding". Many of the groups that organised the protests against the WTO in Seattle will see the initiative purely as a public relations exercise, she said.
Many NGOs are calling either for the use of trade sanctions to enforce labour and environmental standards - anathema to the corporations and most developing countries - or for negotiations on a binding code of conduct for multinational corporations. Mr Ruggie acknowledged that adherence to the global compact is purely voluntary, but said the UN simply had no mandate to negotiate a binding code: "If we started those negotiations again the companies would walk away and we would sit here for another 15 years." And the alternative is far from toothless, he argues. "Transparency and the accountability of public opinion can be as powerful a force as any enforcement mechanism that can be devised," he said.:
