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Global Compact Clears Ill-Reputed Companies

The Chinese weapons shipping company COSCO has received praise from the UN for its reports on social responsibility. Many companies have associated themselves with the UN’s Global Compact initiative solely to obtain a better image, according to a Dutch critic.
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The Chinese weapons shipping company COSCO has received praise from the UN for its reports on social responsibility. Many companies have associated themselves with the UN’s Global Compact initiative solely to obtain a better image, according to a Dutch critic.

(First published in Norwegian 20 May 2008)

By Erik Hagen
Norwatch

The Chinese weapons shipping company COSCO, which since April has been trying to transport weapons to Zimbabwe, has received praise from the UN’s Global Compact initiative for its reports on social responsibility.

Bart Slob, a researcher at the Dutch-based Centre for Research on Multinational Corporations (SOMO), is critical of how Global Compact has given some ill-reputed companies the possibility to clear their names.

The Global Compact initiative is entirely voluntary and requires the companies to commit themselves to respect human rights, environmental standards, employee rights, and so forth. Slob believes that the initiative is not strict enough and makes it possible for some companies to get a free ride. “The only thing a company needs to do to join Global Compact is to send a letter to the UN Secretary General, saying that they respect the Global Compact principles,” Slob told Norwatch.

Afterwards the companies must report yearly on their progress, but the reports are, according to Slob, seldom especially thorough or precise. He says that it is common for the reports sent in to Global Compact to emphasise the companies’ positive progress and seldom mention the negative aspects.

"Bluewashing"
"The UN is a prestigious organisation that people trust and which many companies wish to be associated with," Slob said.

"Some companies that become members of the Global Compact initiative do so solely to be able to adorn themselves with a better reputation – and not necessarily to improve their standards," Slob told Norwatch.

He refers to certain companies’ participation in Global Compact as "bluewashing". The company’s general manager gets to have his picture taken together with the UN’s Secretary General, and afterwards the company gets to wave the UN’s blue flag on its web pages.

The report that COSCO sent in last year received much praise from Global Compact. The UN congratulated the shipping company on wonderful reporting.

"Global Compact is today more a matter of the companies’ reporting than of how they actually comply with the principles. If there is one thing multinational companies are skilful in, it is precisely communication. It is much more interesting whether they are able to comply with the principles that they are supposed to report on," Slob said.

"If you really communicate well, then you must emphasise the critical points. A shipping company that transports weapons should report this. In its next report it would be fair for COSCO to report on this trade. COSCO must report not only on how they comply with the principles but also on how they do not comply with them."

Requires Action
Slob says that it must become possible for Global Compact to exercise more criticism and control with regard to its members. "I think it is much too voluntary. There must be a mechanism to check whether the members actually comply with the principles," Slob told Norwatch.

Now his organisation, SOMO, together with organisations from 17 other countries, has sent a letter to Global Compact in which it requests the initiative to use its influence to induce another Chinese company, PetroChina, to stop the humanitarian crisis in Sudan. The letter was sent on 12 May.

PetroChina is, on the one hand, a member of Global Compact, but, on the other hand, it has been the most important supporter of the regime in Sudan. The Sudanese government is considered to be mainly responsible for the 5-year-long humanitarian crisis that has been allowed to develop in Darfur – a country where both the regime and the insurgents are equipped with Chinese weapons.

Slob also administrates the blog http://globalcompactcritics.blogspot.com/, which publishes concerns about the Global Compact initiative.