So what is this "Global Compact" all about?

Simply put, it is a platform sponsored by the United Nations to encourage and promote good corporate practices and learning experiences in the areas of human rights, labour and the environment; an entry point for the business community to work in partnership with UN organizations, in support of the principles and broader goals of the United Nations. And it provides a basis for structured dialogue between the United Nations, business, labour and civil society on improving corporate practices in the social arena, offering means to significantly broaden the number of companies undertaking such activities.

Initiated in Davos in 1999 by Secretary-General Kofi Annan, the Compact is rooted in the Universal Declaration of Human Rights; the Declaration on Fundamental Prin-ciples and Rights at Work, of the International Labour Organization; and the Earth Summit-Agenda 21 principles on the environment. These three texts express a clear set of universal values supported by all Governments. No other initiative on corporate social responsibility has such universal and legitimate underpinning. And in the months since the world trade talks in Seattle, more and more businesses and organizational leaders are recognizing the importance of the Global Compact as a means to address social problems and keep world markets open.

The Compact sets a frame of reference for industry initiatives, as well as regional and government-led efforts. It is not a code of conduct. Corporate partners that join the United Nations in it do not sign anything; monitoring and verification of corporate practices do not fall within the mandate or the institutional capability of the United Nations. But the Compact is not a corporate shield from criticism; it highlights the global citizenship qualities of corporations and opens up opportunities for focused, mediated, directed and constructive dialogue together with other core partners, including labour and civil society.

The Compact does not ask companies to assume the responsibilities of Governments, but to act only within their respective spheres, although in cases such as international intergovernmental conventions, which require action at the company level to be successfully implemented, corporate participation in it can be helpful. Participation in the Global Compact makes it incumbent upon businesses to:

1. Issue a clear statement of support for the Compact and its principles, and publicly advocate it.
2. Post once a year on the Global Compact Web site (www.unglobalcompact.org) a concrete example of progress made or lessons learned in implementing the principles. This can take many forms, i.e. changes in internal management policies or concrete operational experiences.
3. Engage in partnership with UN organizations by undertaking activities that further the implementation of the principles or by entering strategic partnerships in support of broad UN goals, such as poverty eradication.

John Ruggie, a senior member of Secretary-General Annan's team, describes the Compact as "a novel experiment designed to identify and promote good practices and induce other companies to follow". It is an experiment vitally necessary to attempt at a time when there is still, in Mr. Annan's 1999 Davos phrase, "enormous pressure from various interest groups to load the trade regime and investment agreements with restrictions aimed at reaching adequate standards" in the areas of human rights, labour policies and environmental practices.

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