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The UN Goes to Davos

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In January 1999, United Nations Secretary General Kofi Annan called up business leaders at the World Economic Forum in Davos to “give a human face to the global market.”

His timing was awkward. The UN was only just recovering from US budget cuts; the developing world was drowning in debt; much of South and East Asia was still in the grip of the Asian financial crisis; and development aid was at its lowest level in half a century. It was also a time when hostility to corporate-led globalization, most visible in a thriving anti-sweatshop movement, was growing. Mere months after Davos, anti-WTO protests swept Seattle while Naomi Klein published her best-selling anti-corporate critique, “No Logo.”

Annan saw this dissent as an opportunity. “When people lack faith in the market,” Annan warned the business leaders, “protectionism, populism, nationalism, ethnic chauvinism, fanaticism and terrorism” arise. “Our challenge today,” he went on, is to devise a “global compact” to “compensate the victims of market failures” and replicate on a global scale the social policies that restored political stability during the “long post-war period of expansion.”

Urgent in tone but fuzzy on the details, Annan’s speech revealed how much power states had conceded to capital since the 1970s, and how dearly organized labor had paid for it. When he urged executives to not “wait for every country to introduce laws protecting freedom of association and the right to collective bargaining” but to “at least make sure your own employees, and those of your subcontractors, enjoy those rights,” he wasn’t demanding they respect unions; he was pleading for scraps.

The UN Global Compact—the voluntary corporate sustainability pact born out of Annan’s speech a year later—was never meant to correct, or even acknowledge, this power asymmetry. The rise and fall of the UN Center for Transnational Corporations, which was developing binding codes of conduct for corporations until the US government and the Heritage Foundation forced it to close down in 1992, had proved that the United States wouldn’t tolerate a corporate watchdog in the UN system.

What they would allow was a guide dog. It would have no teeth, but brim with enthusiasm for a collaborative, nonthreatening plan to help companies to ‘be better’ on their own terms. Gently, the organization could encourage companies to make ambitious commitments, without policing their actions. That is what the New York based UN Global Compact, which receives funding both from member companies and some governments, became, and remains, to this day.

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