24/06/2004
Press Release
SG/SM/9383
ECO/69


global compact participants travellers on ‘common historic journey’


to fairer, more stable world says Secretary-General at un summit


Following are Secretary-General Kofi Annan’s opening remarks at the Global Compact Leaders Summit in New York, 24 June:


I am very pleased to welcome so many of you to this Global Compact Summit.


This is the largest and highest-level gathering of leaders from business, labour and civil society ever held at the United Nations.  Indeed, far more of you were determined to attend than we anticipated in our wildest estimations.  Our apologies to those we could accommodate only in an overflow room, and to others whom, I regret, the limitations of space made it impossible for us to accommodate at all.


We are travellers on a common, historic journey.


We meet as stakeholders of the Global Compact, which has become by far the world’s largest initiative promoting global corporate citizenship.  Of all such efforts, the Global Compact alone is based on universal principles that have been accepted by all the world’s leaders.  And more than any other, it engages the developing countries, which are home to half its participating firms, two thirds of its national networks – and four fifths of humanity.


We come together in a spirit of cooperation and dialogue.


We want to share experiences in implementing the Compact, building on lessons learned, and generate new ideas for its future directions.


What is our ultimate destination?


A world held together by strong bonds of community, where today there are only tenuous market transactions.


A world in which the gaps between the rich and poor countries grow narrower, not wider, and where globalization provides opportunities for all people, not only the few.


A world in which economic activities coexist in harmony with, and reinforce, human rights, decent working conditions, environmental sustainability and good governance.


And a world in which the rule of law triumphs everywhere, and the legitimacy derived from shared norms transforms power into an instrument of human betterment.


There is much good news to report about the journey so far.  Four years ago, fewer than fifty companies met here at the United Nations to launch the Global Compact.  Today, nearly 1,500 firms participate, from 70 countries.  So, too, do the major international labour federations, representing more than 150 million workers worldwide.  Fifty leaders of transnational non-governmental organizations, North and South, are also with us today, as are senior officials from some 20 countries.  The number of core United Nations agencies involved in the Compact has also grown from three to five, and their executive heads are here as well.


I am also very pleased to announce that, at your urging, and after extensive consultations with all participants that yielded overwhelming expressions of support, the Global Compact henceforth will include a tenth principle, against corruption, reflecting the recently adopted United Nations convention on that subject.  You felt, and I agreed, that corruption so profoundly corrodes sound business practice and good governance, and thus our ability to realize the other nine principles, that it uniquely deserved to be added to the commitments on which our Compact is founded.


But these four years have also brought new challenges, which we hope to begin to resolve today.  Some concern the Compact itself, others the overall context in which we operate.


First, existing commitments within the Compact need to be more fully integrated into mainstream business strategies and practices.  According to the excellent impact assessment conducted by McKinsey & Company, for which I am deeply grateful, nearly half of all participating companies have changed their policies to align them with the Compact’s principles.  That fact is impressive, especially given that so many of you have come on board only recently.  But it also shows that there is ample room yet for improvement -- in your own operations, as well as in your relations with your suppliers and distributors.  The financial community can play a key role in adjusting incentives for everyone to do the right thing, and I eagerly await the announcements on this subject later today.


Second, our efforts need to be scaled up wherever appropriate and feasible.  Above all, this means better articulating the ties and synergies between the global and local levels of activity in the Compact, enabling more companies, and more people, to play an effective part at the local level.  Indeed, this must be the Compact’s core strategic objective going forward.  Accomplishing it will require participants to engage in novel partnerships -- business to business, and businesses with other stakeholders, including the United Nations.  Many of you have dealt with comparable challenges in your own institutions; we hope to benefit from your ideas -- and your willingness to take on an experiment or two within the Compact.


Third, the Compact’s enormous potential can be fully sustained only if it has a governance structure in which leaders from all participating sectors play an active part, and which reflects the complexity of its scope and scale.  I will have more to say about this also later in the day, particularly at the end of the day.


Fourth, we must remain ever mindful of the delicate relationship between the Global Compact, as a voluntary initiative, and the realm of public governance.  In some circumstances, voluntary initiatives can obviate the need for regulatory action altogether.  In others, they can point the way towards best practices.  But where effective laws and regulatory systems are lacking, and where public institutions are weak or corrupt, the Compact can be only a pragmatic interim solution.  Governance gaps and governance failures are a major source of the problems humanity faces today.  Over time, therefore, the Global Compact must also contribute to improved public governance, at both national and global levels, if it is to bring about the beneficial changes we all hope to see.


Finally, my dear friends, we meet today in an overall international context that isn’t nearly as favourable to our agenda as was the case in July 2000.  The threats to globalization seem much more real now than they did then.  International terrorism has become an unmistakable threat to peace, stability and open borders.  Fear of differences -- be they religious, ethnic or cultural -- is on the rise.  The role of the United Nations, the efficacy of its Charter, and the system of collective security are all under great strain, at a time when they are needed more than ever.


But should we relax our efforts because these are troubled times?  No.  In such times, our responsibility to lead humanity on a different path is all the greater.  For, if not us, then who else can we expect to do it?


You, the different stakeholders in this initiative, have different viewpoints and interests.  But rarely has there been a moment in recent history when it has been so critical for all of us to protect our common space, building on what unites us.  Again I ask, if not us, then who?


Indeed, perhaps no one has more at stake than the business community itself.  You have helped drive globalization.  You have benefited greatly from it.  Your vision, strategies, and organization embody it.  And you have even more to hope from it in the future.  Yet our fragile global order stands in jeopardy today.  Securing its future requires your resources and capacities, your advocacy, and your leadership.  It calls for the unique contributions that only private enterprise can make to the creation of public value, at home and abroad.


So I ask all of you to work together -- business, civil society, labour and governments and, of course, us -- and to work with the United Nations, to reduce the global risks we all face, and to realize the promise of a fairer more stable world.


The Global Compact can only be a small part of the solution.  But even the longest and most arduous journey proceeds with one step at a time.  So let’s roll up our sleeves, and see how far we can move -- today and in the weeks and months ahead.  I look forward to hearing your ideas -- and also your pledges to act on them.


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