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Nongovernmental Organizations (NGOs) and the Global Compact


Part 4 of: "Globalization": the UN's "Safe Haven" for the World's Marginalized


Legal problem for the UN: are multinational corporations "NGOs" ?
UN's Legal problems of receiving funds from "NGOs"
Treatment of NGOs during the emergence of the Global Compact
Attitude of NGOs to the Global Compact

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Legal problem for the UN: are multinational corporations "NGOs" ?

In order to further clarify the status of multinationals in relation to NGOs in their respective relationship with the UN, it would be interesting to know exactly how the UN Office of Legal Affairs understands the legality of the Compact and of the adhering multinationals (or national business entities). This is especially intriguing when the adherence of such entities may be refused by a process, and with criteria, as yet to be determined - especially in the light of the exceptions already permitted in the initial accessions. The UN has long experience of the challenges posed by this process in relation to traditional NGOs - and has proven to be extremely "flexible" with its own principles in responding to political and other pressures.

Specifically, since multinationals have no international legal status and are effectively jumbles of national holding companies, exactly with what bodies is the UN establishing this relationship - when they "adhere" as "partners" to the Compact -- and how is their legal status, or that of the "partnership agreement" perceived in international law? Legally is this tantamount to a form of international recognition? Is the Secretary-General empowered to make international law in this way?

Secondly, since the relationship of the UN with NGOs is so carefully specified by the much-debated Article 71 of the UN Charter, and no other article exists governing relationship with other "nongovernmental" bodies, is it to be understood that multinationals are being related to by the UN under Article 71 and the resolutions based upon it? Are the multinationals effectively defined as "NGOs"? Does this mean, after decades of discussion and proposals, that traditional NGOs will be accorded some form of legal recognition "by the back door" through the extension of recognition accorded to multinational corporations? Should traditional NGOs convert themselves into offshore, profit-making multinationals to benefit from this new opportunity for creative partnership with the UN?

Again from a legal perspective, given the many past UN system resolutions on transnational corporations, is it to be assumed that these are now considered "inoperative" and that there is no inconsistency in the current arrangement with any unrescinded resolutions? It is however unclear how the UN "terminates" the legal standing of earlier resolutions when it revises a historical position. There are many ancient multilateral treaties still on the statute books.

Most intriguing is how the UN is going to handle the adherence of thousands of smaller business entities when it has long been overwhelmed by the administrative challenge of minimum correspondence with NGOs. Should NGO members encourage their local grocer to adhere to the Global Compact? Ironically, stepping back from the possible adherence of smaller corporations, John Ruggie indicated that the target was 1,000 "major" companies with 3 years (13 October 2000). Intriguingly there is no question of their geographic representativity -- long a major issue for the UN in considering the legitimacy of "NGOs". Nor is there any question of whether most of them might be headquartered in in a small number of industrialized countries -- also a point of considerable import in dealing with "NGOs."

When challenged on such points, the UN will of course be obliged to back off and reinterpret the current initiative and its future intentions. Thus the UN Office of Legal Affairs, has been obliged to clarify that there is no formal legal relationship between any business entity and the United Nations in respect of the Global Compact. Instead, companies have made "pledges" to adhere to the principles of the Global Compact, both in their individual corporate practices and by supporting appropriate public policies. From the perspective of the Office, the Global Compact is a set of principles to be promoted and applied by business. The Compact thus does not give rise to issues on the nature of those entities and their relationship beyond that commitment to uphold those principles. And indeed, on exploration of the UN Global Compact Network website (http://www.unglobalcompact.org), the much hyped reality of "partnership" vanishes into a pattern of words signifying no such relationship, formal or informal.

However in the "partners" section of that website, the Secretary-General's statement still indicates (December 2000) that:

"The United Nations once dealt only with Governments. By now we know that peace and prosperity cannot be achieved without partnerships involving Governments, international organizations, the business community and civil society. In today's world, we depend on each other." (http://www.un.org/partners/civil_society/home.htm)

Clearly CEOs of multinationals can be invited to lunch by the Secretary-General in his official capacity, and he can speak at their conferences and initiate "partnerships" with them, but the bodies in question actually have no legal reality for the UN -- despite what he has to say about them. They are a kind of international "legal ghost" -- on which the UN now "depends" in today's world. The ghosts are asked to make "pledges" to adhere to principles. A funny business -- very reminiscent of problems faced by conventional NGOs. But on the other hand, UNDP can cut a deal with individual multinationals in exchange for $50,000, or in its NetAid initiative with the multinational CISCO (http://www.netaid.org/) -- not listed as an early adherent of the Global Compact. But one wonders how the legalities of a contract with non-entities work.

Of course the technical way around this strange UN "partnership" with the spirit world of global reality is that the UN only deals with the "NGOs" representing such multinationals (ICC, World Economic Forum, and WBCSD) who effectively act as "mediums". For the occasion they are however called "business associations" (http://www.un.org/partners/business/asso.htm) -- a form of entity not defined by the Charter. It is curious that the UN is now obliged to indulge in a kind of "spiritualism" -- but maybe the Global Compact should indeed be understood as a compact with the "world of the spirit". For the Secretary-General, attendance at the Davos Symposium is very much like attendance at a kind of global seance at the invitation of a medium. There he speaks with over a 1,000 disembodied entities (in terms of the UN's international legal reality) through the ICC (making its secretary-general the most powerful medium in the world?). So powerful is the medium that the Secretary-General can even physically encounter these disembodied entities and "recreate" with them on that occasion. For those with very strong negative views of multinational corporations, would this metaphor evoke associations of the archetypal Bal des Vampires? It would be interesting to know the extent to which UN policies are now influenced by "spirit guides" speaking through mediums. Are the "partnership meetings" of the Global Compact also somewhat akin to seances?

Making a "pledge" of any kind is normally a very serious matter and is done before witnesses to give weight to the commitment. Now that the legalities of "partnership" has been conveniently abandoned, it is remains unclear how the pledge of adherence to Global Compact principles is made, to whom, and by whom the act is witnessed. But maybe it is really just a notional pledge of little weight to any of those involved. It would however be curious if ghostly non-entities made their pledges in "seances" with UN officials as witnesses.

stly non-entities made their pledges in "seances" with UN officials as witnesses.


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