UN Allies Itself with Big Business

by Naomi Klein

Because the Millennium Summit wasn't hosted by one of the many international agencies whose sole mission is to open up markets for free trade, while assuring a wary public that economic growth will magically eliminate poverty and save our ailing planet.

This meeting was hosted by the United Nations, which, by its mandate, places human and ecological needs ahead of the voracious demands of the market. Imperfect as the UN system may be, it is generally viewed by critics of globalization as a ray of moral hope on the international stage. More significantly, many activists assume that when the time comes to stop pointing out the failures of corporate-driven globalization and to start advancing an alternative, the UN agencies will be there to help.

For instance, the International Labor Organization, with its treaties asserting the right to form unions and to earn a living wage, could be reformed to be more than a collection of well-meaning documents and could actually enforce labor rights across borders. The UN environmental agencies could play similar roles regulating polluters, with real sanctions for violators.

Only there's a problem: If the time ever comes to seriously consider this more active, regulatory role for the UN, it may be too late. That is the conclusion of the research paper Tangled Up in Blue, released recently by the Transnational Resource and Action Center (TRAC) and presented at a conference in New York.

The paper chronicles a set of policy decisions that are steering the UN away from its potential role as an independent regulator of transnational corporations and toward a model where the UN is just as entangled in corporate interests as all the other international financial agencies.

Two years ago, Secretary-General Kofi Annan began warning business leaders that globalization was losing its credibility because of the widening disparity between rich and poor. Pointing to the growing number of protesters, he began to float a proposal: If multinationals wanted to avoid a whole new set of trade rules governing labour and environmental standards, they should sign onto his Global Compact, a set of voluntary ethical guidelines drawn from UN declarations and conventions.

If companies agree to these guidelines in principle, and there is no monitoring to make sure they are followed and no economic sanctions if the guidelines are broken, individual corporations are welcomed into a "partnership" with the UN. The companies get the public relations boost of being associated with the olive branches, and the UN gets new financial partners to help it close the global wealth and health gap (not to mention to the gap of unpaid U.S. dues and of declining international aid).

When Mr. Annan launched the Global Compact in New York on July 26, representatives from roughly 50 companies were by his side. Two of the companies that have endorsed the compact are Nike and Shell: fittingly, the transnationals whose track records are most directly responsible for triggering the anti-corporate backlash the Global Compact is now trying to diffuse.

Nike's use of sweatshop labor in Southeast Asia and Shell's human-rights and environmental record in Nigeria have convinced a great many people that the inequalities of the global economy are not growing pains that can be fixed with some gentle prodding and voluntary codes. Rather, these companies have provided graphic evidence that the current economic boom is being built on the ability of multinationals to exploit inequality, whether it's cheap labour in China or lax environmental standards in Africa. (A fact that might explain why the companies now rushing to partner with the UN under its voluntary code have vigorously resisted attempts to set enforceable labour and environmental standards at every turn.)

In this sea of doublespeak, the UN could, at the very least, be a beacon of moral clarity, vigorously defending the high standards of decency laid out in its conventions, treaties and declarations. At the most, it could be trying to expand its reach to enforce those standards with the same enthusiasm that the World Trade Organization now rules against Brazilian aircraft subsidies. As the TRAC report states, "The UN could be a counterbalance to the WTO and corporate globalization."

Unfortunately, Kofi Annan, afraid that the UN "will be left behind" by history, has clearly shown his bias for an institution that is incapable of regulating corporations because it is in business with them. And if the international community ever decides it wants a different kind of UN, one that brokers a Global New Deal instead of settling for a humanitarian niche in a corporate Brave New World, it could well be too late. By then, the option of a strong, independent UN will have long since disappeared.