The Global Compact: shifting the politics of international development?

Author:Therien, Jean-Philippe

The UN Global Compact epitomizes the current state of the politics of international development in three distinct ways. First, the Compact illustrates a major turn in development thinking. After decades of hostile relations, the UN and business now acknowledge their common interest in the promotion of sustainable development. Second, the Compact brings to light the gradual emergence of more inclusive forms of global governance, in response to the failure of traditional mechanisms of development cooperation. Third, ongoing discussions about the Global Compact attest to the competing worldviews that structure today's development debate. Overall, the Compact demonstrates that, beyond its ever changing dynamics, international development ultimately remains a political, rather than a technical, process.

KEYWORDS: Global Compact, development, United Nations, multilateralism, public-private partnerships.


When he introduced the idea of the Global Compact at the 1999 World Economic Forum in Davos, UN Secretary-General Kofi Annan opened a new chapter in the history of the United Nations. Never before had the organization expressed such a willingness to join with business in promoting international development. Centered on the ambitious objective of "[giving] global markets a more human face," (1) the Global Compact has since become, thanks to the direct leadership of the secretary-general, a key instrument in the UN's overall strategy to foster a more inclusive and sustainable world economy.

The mission of the Global Compact is framed on the basis of two primary objectives. First, the Compact is a corporate citizenship initiative that invites the private sector "to embrace, support and enact ... a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption." (2) The 2,400 companies that had joined the Global Compact as of the end of 2005 were committed to voluntarily applying, within their sphere of influence, ten principles drawn from four major international agreements: the Universal Declaration of Human Rights, the Fundamental Principles and Rights at Work of the International Labour Organization (ILO), the Rio Declaration on Environment and Development, and the UN Convention Against Corruption. (3) Participating companies, whether transnationals like Shell, Nike, and Novartis, or small and medium enterprises from the South, are expected to report annually on the progress they have made in the implementation of the Compact's principles.

Second, the Global Compact constitutes a forum whose aim is to facilitate cooperation among the various economic and social actors in the global arena in order to promote UN values. Thus, besides the private sector and the UN Secretariat, the Compact involves six UN specialized agencies--ILO, UN Development Programme (UNDP), UN Environment Programme (UNEP), Office of the High Commissioner for Human Rights (OHCHR), UN Industrial Development Organization (UNIDO), and UN Office on Drugs and Crime (UNODC)--as well as a number of nongovernmental organizations (NGOs), labor associations, business associations, think tanks, and government representatives. Because most of the participants belong to over fifty national and regional networks, the Global Compact is often referred to as a "network of networks." (4) Through the action program that it spearheads, the Compact seeks to promote dialogue on corporate social responsibility and development and to foster new forms of partnership among member stakeholders. To reach these goals, the Global Compact relies above all on its ability to bring people together, which it effectively demonstrated in 2004 by organizing the largest meeting of business, labor, and civil society leaders in the history of the United Nations.

Rooted in a tradition that stresses the role of multilateral institutions as "intellectual actors," (5) this article argues that the Global Compact epitomizes the current state of the politics of international development in three distinct ways. First, the Compact illustrates a major turn in development thinking and in North-South relations. It should be recalled that the UN actively nurtured the "negative chemistry" that long prevailed between the Third World and the business community. (6) In opposition to this deep-seated trend, the Global Compact is premised on the assumption that the UN and the private sector have a common interest in the promotion of sustainable development on a global scale. The Compact thus reflects a historic change of attitude within the UN regarding the role of business and markets in the fight against world poverty.

Second, the Compact bespeaks the need to adapt the mechanisms of international governance to the contemporary challenges of development. Old forms of multilateralism have clearly failed to bridge the gap between rich and poor countries. This failure has been one of the catalysts in the emergence of a new set of international practices that has been referred to as "complex multilateralism." (7) Often considered the most vivid example of the public-private partnerships initiated by the UN over the past few years, the Compact is a striking manifestation of this evolution toward a bottom-up, nonhierarchical model of multilateral cooperation.

Third, the Global Compact offers an excellent vantage point for an assessment of the competing worldviews that currently structure the development debate. It is generally recognized that the end of the 1990s led to an unprecedented convergence between the "UN paradigm"--the interventionist policies traditionally promoted by the UN and its specialized agencies--and the "Bretton Woods paradigm"--the promarket policies defended by the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). (8) This changing multilateral environment, however, has yet to generate a truly global development consensus. The debate over the Compact reveals how profoundly divided the development community remains as to the best response to the specific needs of third world countries.

Building on these insights about the significance of the Global Compact for the politics of international development, the article comprises three parts. The first, proceeding from a historical perspective, analyzes how the Global Compact partakes of the recently initiated reorientation of the UN paradigm. The second part explains the innovative nature of the model of governance proposed by the Compact, a model that draws upon the practices of several international bodies. Finally, the third section summarizes the ongoing debate between supporters and critics of the Global Compact. Overall, the Compact experiment clearly shows that beyond its ever changing dynamics, international development ultimately remains a political, rather than a technical, process.

From Hostility to Partnership: The UN and Business

Beginning in the 1950s, the UN was prompted to keep its distance from the corporate sector by the Cold War environment and the need to display a relative impartiality toward market economy and planned economy advocates alike. That attitude turned into institutionalized animosity in the 1960s when developing countries entered the organization en masse. Indeed, the rise of the North-South conflict led the UN to make the regulation of the private sector, and of transnational corporations in particular, one of its top development priorities for over a generation.

After the inauguration of the United Nations Conference on Trade and Development (UNCTAD) in 1964, the UN systematically defended the notion that the transnationals, left to themselves, would further enlarge the gap between developed and developing countries. As a corrective measure, the UN put forward a series of interventionist policies aimed at regulating such issues as the price of commodities exported by the third world, restrictive business practices, and technology transfers. During the 1970s, in the wake of discussions on the New International Economic Order, the founding of two institutions--the Center on Transnational Corporations (CTC), entrusted with helping developing countries to build up their capacity to negotiate with the transnationals, and the United Nations Commission on Transnational Corporations (UNCTC), mandated to establish a code of conduct for transnational corporations--only exacerbated the climate of confrontation between the UN and business.

In line with the belief that underdevelopment resulted from external factors related to the international environment, the "antibusiness prejudice" (9) remained a conspicuous feature of the UN paradigm until the end of the Cold War. The UN's mistrust toward the private sector, it should be stressed, stood in sharp opposition with the policies defended on the basis of the Bretton Woods paradigm. In fact, one of the chief objectives behind the creation of the IMF, the World Bank, and the General Agreement on Tariffs and Trade (GATT) was precisely to facilitate the opening of markets on which the corporate sector's prosperity was said to depend. Thus, the question of the appropriate attitude for the UN to adopt toward business long persisted as a major source of friction between its agencies and the Bretton Woods institutions.

In recent years, the international dynamic of social forces caused all the multilateral organizations to revise their approach toward development. As suggested above, the dialogue between the UN paradigm and the Bretton Woods paradigm is more intensive today than ever before. The UN acknowledges more and more the "great opportunities" (10) that globalization affords, while the Bretton Woods institutions are more ready than before to admit its risks and perils. (11) In keeping with this logic of convergence, the international financial institutions increasingly regard the fight against poverty as "the paramount challenge of the 21st century"; (12) for its part...

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