Reuters Africa, July 4, 2007

U.N. TOLD TO OVERHAUL CORPORATE RESPONSIBILITY PACT

[Rachel's introduction: In early July, non-governmental organizations urged the United Nations to strengthen its voluntary "global compact," which says transnational corporations should "support a precautionary approach to environmental challenges."]

GENEVA, July 4 (Reuters) -- Human rights and environmental activists urged the United Nations on Wednesday to overhaul its seven-year-old initiative on business responsibility, saying it needed teeth to spur companies to improve their practices.

Amnesty International, Greenpeace and ActionAid, speaking ahead of a summit of the U.N. Global Compact expected to draw more than 1,000 executives and officials to Geneva, said that voluntary rules had done little to improve companies' practices.

They said the United Nations should monitor adherence to the Global Compact's 10 principles, such as pledges to abolish child labour and work against corruption, and sanction signatory companies who are not upholding them.

"What is needed are legally binding regulations to control corporate activities with respect to human rights," Aftab Alam Khan of ActionAid told journalists in Geneva.

The Global Compact was created in 2000 as a counterweight to anti- globalisation protests, such as those that disrupted the 1999 World Trade Organisation meeting in Seattle.

More than 3,000 businesses have signed onto the initiative, which has no enforcement mechanism beyond public scrutiny and the requirement for participants to report annually on their progress in meeting the 10 principles.

Greenpeace International advisor Daniel Mittler said many of the initiative's guidelines were so ambiguous that companies did not need to make any changes to their policies, citing as an example Principle 7 that reads: "Businesses should support a precautionary approach to environmental challenges."

"The principles are vague and they are not enforced," he said. "The Global Compact is simply not delivering."

Executives from Coca-Cola Co. , Ericsson and Anglo- American are among those participating in the two-day conference in Geneva which will open on Thursday with an address from U.N. Secretary-General Ban Ki-moon.

While Global Compact Executive Director Georg Kell has said some 600 firms have been delisted in past years for failing to deliver real changes, Amnesty International said such companies were dropped for "technical reasons", such as not filing reports on time, and not for their performance on substantive issues.

"It is not possible to either suspend or expel participating companies in cases of substantive breach of the Global Compact's principles," Audrey Gaughran, Amnesty International's head of economic relations, told journalists in Geneva.

"The Global Compact must find ways to strengthen how companies are held to account for non-compliance with its principles," she said.

In a survey of 391 chief executives of firms participating in the Global Compact, released this week by the consultancy McKinsey & Co., 59 percent said they were incorporating environmental, social and governance issues into their core strategy "much more" now than five years ago.

Another 34 percent said they were doing so "somewhat more" and 7 percent said they were integrating the issues the same amount or less than in 2002.

Copyright Reuters 2007