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Monday, July 9, 2007

Business shortcomings on anti-corruption measures remain-UN study

Published in the Philippine Daily Inquirer
July 9, 2007

A United Nations survey said Monday that there were still major shortcomings in business's approach to human rights and anti-corruption measures despite progress in adopting socially and environmentally responsible standards.

The first report on the corporate response to the UN's seven-year-old partnership with companies, the Global Compact, said there was "much room for advancement" on corporate assessments of their impact on human rights, reporting cases of corruption, and in overseeing their suppliers' compliance.

"The survey shows there are distinct areas where companies are excelling and others where they lag," it added.

The human rights group Amnesty International said the voluntary arrangement had not been effective so far and voiced frustration at the lack of enforcement of the 10 pledges dealing with human rights, labour, the environment and anti-corruption.

The report was released ahead of the biggest meeting yet on the UN's Global Compact in Geneva on Thursday and Friday.

It is due to bring together about 650 business executives, as well as ministers, campaign groups, and international organisations.

The 60 page survey of about 400 companies marks the first time the United Nations has tried to assess the implementation of its 10 principles by the Compact's near 4,000 strong corporate members.

The public benchmarking will now be annual, Global Compact Executive Director Georg Kell said.

Eighty-nine percent of companies said they gave employees greater say in policies on labour standards, more than 80 percent said they had measures against discrimination, while 69 percent allowed trade unions.

Half said they had set up policies against forced or child labour, while just 38 percent monitored labour standards in their supply chain.

Forty-three percent of the companies said they had environmental performance targets, but only a quarter to 29 percent had targets for sustainable consumption or production.

Sixty-one percent of companies claimed a "zero tolerance" policy towards corruption, but only seven percent said they publicised political donations and just 23 percent set sanctions for policy breaches.

Companies were largely monitoring human rights in the workplace. Only 31 percent conducted assessments on the broader risk their policies might pose for human rights, while just 16 percent examined their actual impact.

Kell told journalists companies had initially joined the Global Compact thinking they could use it to enhance their public relations.

"That has fundamentally changed, there has been a significant shift towards quality," he argued, underlining the increasing business risk involved in transgressions, and the growing implication of top level management in overseeing proper standards.

"We delisted 600 participants last year and we expect another 500 to be delisted this year," he added, citing shortcomings in their reporting.

However, the number of companies joining the Compact is growing by about one-third a year.

Amnesty International criticised the voluntary nature of the Compact, underlining that it did not replace a company's legal responsibility.

"I would say that we are very concerned that it isn't being very effective," Audrey Gaughran of Amnesty told AFP. "There is no analysis of the substance."

At least one of the companies with participants registered for the Geneva meeting, electric engineering giant Siemens, is embroiled in corruption investigations in Germany, including on suspicion of setting up a slush-fund to obtain foreign contracts.

"Siemens is now prepared to totally reconsider its engagement in the Global Compact and to take it far more seriously," Kell commented.