Being a good corporate global citizen

I am not anti-globalisation, or anti-corporations.

The market is a powerful tool for development, provided it is properly regulated. Otherwise, it will simply do what it does best: concentrate wealth in the hands of those who already have it. It does tend to have the incidental benefit of raising absolute standards of living (a good thing), but will often reinforce relative gaps in wealth.

This is exactly what has happened in global markets since 1945. Average developing-world standards of living have risen, but so has the relative North-South gap. Globalisation, unsurprisingly, favours the strong.

Superficially, at least, it is thus a good thing that the UN is launching (a second) corporate social responsibility compact – a set of voluntary core principles which corporations are encouraged to sign up to, including corporate partnership ventures, including MNCs helping to foster local eco-friendly businesses. It’s fine to acknowledge that to achieve real change governments will have to work increasingly with business.

The worrying aspect is the continuing, behind-closed-doors integration of the trans-national commercial classes with the trans-national diplomatic classes and their combined culture of secrecy or, more politely, “confidentiality”.

In focussing on “partnership” the UN is being constructive, but risks allowing MNCs to trade on the UN’s prestige. I would feel far more comfortable with a transparent certification process, a prestige-based UN stamp of approval on these partnership projects, which could be withdrawn if they fail.

If one thinks of the successes of Fair Trade certified products, this might harness some of the power of consumer pressure and give the UN a little more arms-length distance from these projects.

There is already a worrying democratic deficit in the conduct of international affairs which diplomats and businessmen tend, naturally enough, to be blind to. If you’re used to brokering bilateral deals (be they a corporate merger or a cease-fire agreement) confidentiality is the name of the game.

However, in the exercise of public power on the international stage and multilateral projects that affect the lives of millions of real people, it’s hardly an acceptable way of doing business.

What’s worse is this is the way things are already done. Dozens of inter-government technical and standards-setting bodies are staffed by “industry representatives” not government officials and have often succeeded in universalising proprietary technologies as the relevant international standard.

Such an approach just doesn’t square with the calls from within the UN for civil society to play a more active role in international affairs.