Business takes up Kofi
Annan’s challenge
By
Maria Livanos Cattaui
Paris 15 March 1999
– At the recent World Economic Forum in Davos, United Nations Secretary
General Kofi Annan called for a closer and mutually supportive partnership between
the UN and the private sector to defend humanitarian values.
Mr Annan issued that invitation as a challenge
to business to join with the UN in what he called "a global compact of
shared values and principles" in three specific area: human rights, labor
standards and environmental practice.
Business accepts the challenge an
d is eager to
cooperate with the UN and other public sector bodies to enhance all three. Alongside
them however, we must place a fourth value – the economic responsibility
incumbent upon any company to its customers, to its employees and to its shareholders.
Fulfillment of that responsibility is the key to
the other three, for without it companies cannot remain in business.
As the organization that speaks for world business,
the International Chamber of Commerce needs to define exactly where respective
responsibilities lie, what cooperation can achieve in practical terms, and how
business and the UN can work together most effectively.
Business should not be called upon to meet demands
and expectations that are properly the preserve of governments. The private
sector cannot, for example, ensure that the rule of law reigns in a given country,
that all citizens have access to education and enjoy freedom of speech, that
wealth is fairly distributed, and that there is an adequate social safety net
for the old, the sick and the jobless.
And it is for governments, with the help and advice
of business, to negotiate and perfect global rules in areas like investment,
intellectual property protection, competition and the suppression of corruption,
without which competitive enterprise cannot achieve its full potential. ICC
has long provided business input to this task.
Framing and updating global rules will do much
to counter the danger that Mr Annan perceives when he asserts that national
markets are at least held together by shared values, but that in the global
market people have no confidence that minimum standards will prevail.
In fact, globalization has already become a powerful
force for spreading higher standards and best business practice throughout the
world. Global companies have their own global corporate standards, which they
apply in areas such as training and employee relations, technology and environmental
management, and responsibility to local communities.
Of course, global companies have to respect local
laws, social conventions and expectations when they set up subsidiaries or form
joint ventures with local partners. But they strive to fit in with the local
way of doing things without betraying their basic principles.
What companies can do is to be good corporate citizens
in their relations with the community in which they operate and in their treatment
of employees, suppliers, sub-contractors, customers and business associates.
They can conduct their business fairly and honestly, and resist corruption.
The continued spread of corporate "best practices",
reinforced with global rules framed by governments in which business can thrive,
is a powerful combination for progress towards a world which, in Mr. Annan’s
words, "offers everyone at least a chance of prosperity, in a healthy environment".
No master plan created the global market and no
master plan can give it a human face. Rather it resulted from the interaction
of many forces over decades – technological progress, ubiquitous, instant
communications and progressive liberalization of trade and investment. The aspirations
of many millions of people for a better life are driving globalization and it
is for business to respond.
Robust economic growth and expanding trade and
investment will give the global compact Secretary General Annan proposes a real
opportunity to improve human rights, labor standards and environmental progress
across the world. The opportunity today is far better than when the world was
made up of fragmented national or regional economies, sheltered by tariff walls
and preferences and separated by distance.
The more business activities and markets become
global, the more readily corporate best practice will spread. Competition will
see to that.
Maria Livanos Cattaui, Secretary
General of the International Chamber of Commerce