Q: I have found in my brief experience as somebody out of government that the best way that businesses can actually assist in what to do is engage in policies of social responsibility, often in the territories of a conflict. I wonder if you would comment, Secretary-General, on whether these businesses, if they get involved in the Global Compact, can also work with the United Nations people on the ground, because on occasion, they find it quite difficult to do.
SG: Let me say that we are prepared to work with corporations on the ground, particularly in conflict areas or in any of those areas where the UNDP, UNICEF and others are operating. UNDP operates in 134 countries and we are working with corporations at the national level as well. In areas of conflict, yes, we will be prepared to work with corporations on the ground, and, in fact, the Global Compact will start its first thematic dialogue in March where we will discuss how corporations should behave or position themselves in areas of conflict. I think that dialogue and that conversation will explore further how we can work together on the ground. But the simple answer to your question is yes, we are prepared to work with them on the ground in the conflict areas from Sierra Leone on the West Coast to the Democratic Republic of Congo and other parts of the world.
Q: I would like to ask Mr. Lindahl whether it will be his role to try to cooperate with some of many of these organizations which exist or which are interested in having business conduct monitored, especially the importance of having these businesses monitored in some of the emerging countries, because in some of the countries, if you start talking to them about business conduct, they do not even know what you are talking about.
Goran Lindahl, former President and CEO of ABB: I will give a brief response to that. The Global Compact does not exclude any of the other initiatives. The Global Compact created a framework for all initiatives, including those out of the UN organization. This means that we welcome any constituencies or groupings to participate in the dialogue to fulfill the 9 articles that we have in the Global Compact which cover human rights, labor and the environment. So, the response is yes, we want to have a dialogue with each and every party that is prepared to commit to the 9 articles.
SG: And I would want to add that the Global Compact is in effect also encouraging the sort of business ethics that you are referring to. I think most serious corporations are concerned about the issue you raised and are trying to ensure that their personnel are aware of the need to do what is right.
Q: We had a Chinese economist who came to the Harvard Business School or a year on a fellowship to study capitalism and democracy. At the end of his year, we had him to dinner and I asked him what is the most surprising thing you learned about the functioning of capitalism, as his training had been in Marxist economics. And he said without hesitation: I had no idea how important religion is to the functioning of capitalism. I had never thought about this before, but he said think about it. In many ways, America is living on momentum from his past. People go to churches where they are taught by people that they respect that they should voluntarily obey the law and that when they enter a contract, even if conditions change, to be honest, they should follow through on the contract. He said there is a system of belief that has to exist before capitalism will work. He said when you look around the world and Western powers have flipped their fingers and said: we want free markets here now, without a foundation of these basic beliefs, it simply will not work. I just wonder if you have a sense about this, looking around the world where experiments in development have and have not worked. Are the Western countries beliefs in democracy and capitalism ill-founded?
SG: Let me say that if religion is a factor in what you have described, I think I will base it on the fact that each major religion, whether it is Christianity, Islam, Buddhism, or whatever, is an education in social morality. That education in social morality, about honesty, telling the truth, respecting your neighbour, treating your neighbour as you would want to be treated and so forth, gives you a certain understanding of how you relate to others. So perhaps this is what your Chinese friend was getting at.
Klaus Schwab, Founder and President of the World Economic Forum: I just wanted to say Secretary-General that we are joined by about 25 religious leaders here at this meeting because we recognize the importance of what our friend said about establishing a dialogue between the business community and religions.
SG: I wanted to pursue this a little bit. If indeed religion furthers capitalism and democracy and you build on that, then others will have lots of questions for the capitalists who sometimes are not sensitive to the needs of others in society. How can one in some cases have extreme wealth and immense poverty sitting side by side and it does not seem to bother anybody. What does religion say about that? That is the other side of the equation that we may have to ponder.
Mr. Schwab: In promoting the Global Compact, we sometimes have reactions that it is only something for large companies, or there are other reactions which said it is only something for companies in the European sphere where social responsibility is much more traditional, or that it is something which companies from developing countries do not address. How would you respond to those questions because, as I said at the beginning, we would like to have everybody here joining the Compact?
SG: I think the Global Compact in fact does work for the developing countries. First of all, most of the corporations we are targeting or we have asked to join us are operating in the developing world. If we are asking them to embrace these 9 principles and to apply them through their corporate world, and if they are doing it here and in Africa and in Latin America and in Asia, they are also getting the benefits of this good business and corporate behavior.
The other thing I would want to comment on is that we have quite a few companies from the developing world who have joined the Global Compact. In fact, we have had very important sessions in Brazil and in India where there has been quite a bit of interest in the Global Compact. Our difficulty is not attracting people from the developing world. We want to attract more companies from the United States and I think we are beginning to make progress. And thirdly, I do not think the Global Compact is meant only for big corporations. I think it is important for all of us individuals, corporate leaders and companies large and small, in our activities, to respect the environment, the basic human rights and the core labour standards.
Some will tell you it is difficult because it is expensive. I had an interesting discussion with an Indian friend today who said when it comes to child labour, you are asking us to stop it. He said of course we are against enforced child labour, but in some situations, the kids have to work because the parents do not have enough. He said you are not going to get the corporations to endorse this. And I said well they may say we cannot do it today, but they have to accept it as an objective and begin to work on removing this situation where children have to work because they do not have enough to eat. Other societies are dealing with this by telling the families that your children will have a full meal at school. Send them to school and they will be fed. Others are doing even greater experiments where they promise a savings scheme or a loan to the family, but they give it to them at the end of the fourth year when the child has gone through school. So once you accept the premise that children should not be exploited and made to work, you can then begin to move against it. And so I think the Third World has a lot to gain. And I think that all of us, whether we are running small, medium-sized or large companies, can make a contribution and have a role to play. *****