Support our recommendation at the RIO+20 Dialogue

The RIO+20 Dialogue is an online platform which gives participants the opportunity to present recommendations for Rio +20 for discussion and voting. The recommendations with the highest support will be presented to the panelist in the Sustainable Development Dialogues in Rio de Janeiro from the 16th till the 19th of June.

Our recommendation is:
UN members states strengthen the UN Global Compact’s mandate by increasing the accountability of its members through monitoring non-compliance and a selection at the gate.

The UN Global Compact has more than 8000 participants . There is no selection at the gate; companies can become a member of the Global Compact with a commitment by the company’s Chief Executive Officer, and the support of the highest-level Governance body of the organization. They have to commit to the implementation, disclosure, and promotion of its ten universal principles and to a financial annual contribution.  

Companies are required to issue an annual Communication on Progress (COP) which describes the progress made in implementing the ten UN Global Compact principles. However the content of this report will not be checked. Only companies that fail to produce a COP can eventually be expelled.
Companies can also be expelled from the UN Global Compact if their actions are detrimental to the reputation and integrity of the UN Global Compact. However, this hasn’t happened more than once or twice.

Due to the weak accountability mechanisms within the UN Global Compact, there are many companies that violate one or several of the ten Global Compact principles. Because the Global Compact does not routinely track or monitor companies’ activities , these companies misuse the UN logo.
To advance the sustainable development agenda, there should be a selection at the gate of the UN Global Compact and the participating companies should be more accountable for their sustainable development impact. This can be realized by introducing requirements regarding the format and content of the COPs and multi-stakeholder verification of the progress claims made. 

We have little time: untill the 3rd of June but we hope you will support our recommendation!

Remarkable change of discourse in the Global Compact

The executive director of the UN Global Compact, Georg Kell, always seemed to be an exponent of the reactionary forces within the Global Compact. However, currently he is on a mission to clean up the organisation. More than 750 businesses are likely to be removed from the Global Compact in the next six months with hundreds more to follow. In an article of the Guardian March 26, Kell stated that he is dealing with "free riders who joined but had no intention to stay engaged."
Let’s hope that this is not just a change in discourse inspired by a new PR strategy, but that it signals an actual change in direction.

For more information, see also the second article of the Guardian of March 26.

Siemens criticized on its commitment to the Global Compact Principles

According to Western Sahara Research Watch (WSRW) Siemens’ plans to construct and maintain a wind mill farm in occupied Western Sahara are in violation with the UN Global Compact Principles. WSRW expressed its concerns in a letter to Siemens, dated 6 March 2012. As Siemens is a participant to the Global Compact, a copy of the letter was sent to the Global Compact Board.

The Foum El Oued Wind Farm Project includes the construction and operation of a wind farm by NAREVA Holding (a Moroccan industrial and financial group) and Siemens. The location of the wind farm is inside the international recognized borders of the territory of Western Sahara, which is occupied by Morocco.

WSRW has three concerns about the Foum El Oued project.
•    The Saharawi people have not been consulted for the development of the project. The UN Security Council considers natural resource activity in Western Sahara to be in violation of international law if the people of the territory are not consulted.
•    Building infrastructure in occupied territory by Morocco strengthens Moroccan occupation and gives the appearance of legitimizing the illegal occupation.
•    The Saharawi people in exile at refugee camps inside Algeria will practically see no benefit of the Foum El Oued Wind Farm Project.

The Global Compact asks companies to support the ten principles “within their sphere of influence”. Surprisingly, Siemens’ PR officer, Rasmus Windfeld told Danish news service DanWatch that “Siemens’s attitude is that Siemens supplies windmills, and it is the customer who decides where they are to be placed”. This statement reveals that Siemens’ interpretation of its sphere of influence is very limited.

In June 2011 the Lithuanian company, Lifosa was expelled from the Global Compact due to similar violations of the GC Principles in Western Sahara and non-communication in the Compact's dialogue facilitation process.

Delta Lloyd excludes 38 companies for violating Global Compact Principles

Almost half of excluded companies are Global Compact members

Dutch investment company Delta Lloyd has published a list with companies it has excluded from its investment portfolio. Delta Lloyd excludes companies for their involvement in controversial business practices. Delta Lloyd’s exclusion criteria are based on the Global Compact principles. A company that violates these principles repeatedly or seriously is excluded from Delta Lloyd’s investment portfolio.
The recently published list features 38 companies. Almost half of these companies are Global Compact members, including BP (excluded for severe environmental pollution), Goldcorp (excluded for violation of human rights) PetroChina and Total (both excluded for violation of human rights in Birma & Sudan).

World’s third largest pension fund divests from PetroChina

The Netherlands’ largest pension fund ABP has divested its interests in PetroChina and blacklisted the company for non-compliance with the United Nations Global Compact Principles. PetroChina is a participant in the Global Compact. CNPC, its parent company, has been criticized for its presence in war-torn Sudan.

ABP had urged CNPC, repeatedly to improve its behavior to prevent complicity in human rights violations in Sudan. CNPC however failed to adequately address the concerns.

ABP’s investment policy is based on the ten principles of the Global Compact. ABP concludes that PetroChina / CNPC, lacks solid policies to prevent involvement in human rights violations in Sudan. Hence, PetroChina does not comply with the second principle of the UNGC, which states that businesses should make sure that they are not complicit in human rights abuses.

According to Thijs Steger, spokesman for ABP Investments, the pension fund has engaged with the local management of CNPC in Sudan and requested that the company would fulfill several demands. These included that the management should:

• execute an assessment of the impact of CNPC’s activities on the local community;
• be transparent on the working methods of their security staff;
• initiate a dialogue with their stakeholders and be accountable towards their stakeholders;
• publish a statement on their role in the democratic development processes in Sudan.

CNPC has responded that they do not comment on political situations. Mr. Steger stated that ABP repeatedly urged CNPC to meet the requirements, but that the company did not progress enough. ABP therefore decided to blacklist PetroChina.

In January 2009, over 80 civil society organizations including human rights, corporate accountability, and religious groups from 25 countries, as well as government officials submitted an open letter to the United Nations Global Compact (UNGC) in support of a formal complaint against PetroChina. PetroChina, the publicly traded arm of CNPC, is the leading oil company operating in Sudan, with extensive financial links to the regime. According to the complainants, the company was uniquely positioned to influence the government of Sudan, but failed to act and denying involvement in the humanitarian crisis in Darfur.

In July 2009 the Global Compact Board announced that they maintained PetroChina as a participant in the Compact. The Vice Chair of the Board, Sir Mark Moody-Stuart, said that CNPC had been “active in supporting sustainable development in the country [Sudan] […]." The Board also took note that CNPC "had engaged in Global Compact learning and dialogue activities on conflict sensitive business practices."

ABP is not the first pension fund that has decided to divest from PetroChina. In 2008 PGGM, another Dutch pension investment giant sold its PetroChina shares after their own engagement strategy failed to produce results. At the time, PGGM said: "CNPC has not taken adequate steps to avoid involvement in these human rights violations or to contribute to resolving human rights issues in that country." Moreover, in January 2009 the US pension group TIAA-CREF also sold its PetroChina shares in protest of PetroChina’s business links to the Sudanese government presiding over genocide in Darfur.

As opposed to findings of the Global Compact Board in 2009, ABP and other major pension funds, have evidence that PetroChina is in breach of principle two of the Global Compact. Therefore, one can conclude that the Board would have to reconsider its position on PetroChina's participation in the Global Compact.

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