Who Runs the UN? A Half Century of Corporate Influence
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WHO RUNS THE U.N.?: A Half Century Of Corporate Influence
By David Lewit July 4, 2000

Depending upon your age and country, you may love, despise, or ignore the United Nations. Actually, about two-thirds of Americans in the US say they support the UN despite a negative national policy toward that institution during the last quarter-century [1]. Recent polls also show that a majority of Americans believe that corporations ought to better serve the community and not just the shareholder bottom line [2]. These two public attitudes are not unrelated— since the fall of the Soviet Union and the rise of civil society activity regarding global environmental and social issues, corporations and their lobbies have sought direct involvement not only in international trade and investment agreements, but in the affairs of the UN as well [3].

Corporate/UN Partnerships

Corporate/UN partnering has already begun, but it is not clear whether corporate motivations are entirely altruistic, or whether corporations stand to gain more than UN agencies. For example, in January of 1999 the UN's Secretary General Kofi Annan blessed the opening of a Business-Humanitarian Forum. Its co-chairs Sadako Ogata and John F. Imie bring together the UN High Commissioner for Refugees and the president of Union Oil of California (UNOCAL), a notorious violator of human rights and environmental integrity and creator of refugees, indicted by the Alliance for Democracy [4]. Other charter members include International Red Cross/Red Crescent, Care USA, United Nations Children's Fund (UNICEF), and Nestle, Rio Tinto (both notorious violators), United Technologies (weapons), and World Business Council for Sustainable Development (WBCSD), a brainchild of the capricious oil entrepreneur Maurice Strong who chaired the compromised Rio environmental summit.

This Business-Humanitarian Forum is just one of several initiatives to bloom after Kofi Annan launched his partnering policy without General Assembly approval. The policy seems to be based on two concerns. The first is the chronic financial malnutrition of the UN, thanks especially to US intransigence in paying its dues, which ripples through the budgets of other UN members who must supply peacekeeping personnel. The second is Annan's express desire to make use of business expertise especially, we might suppose, in computing and telecommunications. The odd thing about this reason is the volunteering and inclusion of some of the worst human rights and environmental corporate offenders who seem to have little expertise to offer the UN.

As I write there is news that a year's civil pressure has succeeded in terminating a new partnership called Global Sustainable Development Facility (GSDF), set up by the UN Development Program (UNDP). Under this project UNDP had sought corporate partners at $50,000 each, a figure familiar to corporate contributors to American political candidates. UNDP was chartered to coordinate other UN agencies in economic development, environmental protection, women's empowerment, job promotion, and the elimination of poverty. Because the US has squeezed UNDP financially, the agency has leaned toward free trade and accommodation to IMF and World Bank structural adjustment policies. Nevertheless UNDP has produced annual reports highlighting its Human Development Index, measurements of outcomes typically ignored by notorious transnational corporations such as Rio Tinto, Dow Chemical, and Novartis, all enrolled in the doomed GSDF.

A "Global Compact," proposed by Kofi Annan at the elite World Economic Summit in Davos, Switzerland in January, 1999 and launched in July with 29 major transnational corporations and the heads of the International Labor Organization (ILO), UN Conference on Trade and Development (UNCTAD), UN High Commission for Human Rights (UNHCR), and the UN Environmental Program (UNEP) provides the rationale for these corporate/UN partnerships. The Compact itemizes nine principles urging companies to do the right thing with respect to human rights and their abuses; labor's freedom of association and collective bargaining, forced labor, child labor, employment and occupational discrimination; the precautionary principle when introducing new products and processes, environmental responsibility, and environmentally friendly technologies. The Compact requires participating companies to insert these values into their mission statements and corporate practices, but is non-binding, and has no monitoring mechanisms or means of enforcement. A special web site permitting civil society to challenge wayward corporations has been launched at www.UNGlobalCompact.org. Unfortunately the "feedback" section is one-way -- visitors cannot read other visitors’ comments.

The Secretary-General told the US Chamber of Commerce that "a fundamental shift has occurred in recent years in the attitude of the UN toward the private sector. Confrontation has taken a back seat to cooperation. Polemics have given way to partnerships... Both the business community and the UN are engaged in the service of something larger than ourselves: human security in the broadest sense... Values, stability, services: it is no surprise that the UN and the private sector are joining forces. The voice of business is now heard in UN policy debates." Yet the US Council on International Business, affiliated with the International Chamber of Commerce, rejects binding codes of conduct advocated by unions, environmental and human rights groups and vehemently opposes independent auditing and verification as "intrusions." Thus it appears that many transnational companies wish to enjoy "greenwashed" (or "bluewashed" or whitewashed) images and official voices in UN councils, but are not serious about meeting UN needs.

Annan's "shift" was already painfully apparent in 1993 with the dissolution of the UN Center on Transnational Corporations (CTC) jointly by then-Secretary-General Boutros-Ghali and Richard Thornburgh, appointed by President George Bush to advise on "streamlining" the UN. Established by the Economic and Social Council (ECOSOC) in 1974 when the scores of "developing" nations were seeking a degree of industrial and agricultural autonomy, the CTC produced a draft code of conduct for transnational corporations (TNCs). The code became so hamstrung with reservations from TNC base-countries that it has languished since 1989. Thornburgh finished off the CTC by dismantling it and transferring some of its personnel to UNCTAD which in the meantime had been weakened by the global North's limiting its authority to negotiate with the General Agreement on Tariffs and Trade (GATT) and other agencies. CTC had been the only UN agency charged with monitoring and regulating the powerful and unaccountable TNCs.

Corporate Influence: An Old Story

Corporate involvement with the UN may be traced to its very origins. The corporate-heavy club Council on Foreign Relations (CFR) has produced most of the US secretaries of state and treasury since 1949. It was during World War II that a United Nations was first conceived in harness with an International Monetary Fund (IMF) and an International Bank for Reconstruction and Development (World Bank) by CFR's Isaiah Bowman, director of the National Geographic Society, in an informal group of mostly CFR members gathered by Roosevelt's secretary of state Cordell Hull [Perloff, 1988]. The principal concern of the world elite which this group represented was ensuring capitalist industrial expansion and power in the event of either a Nazi or an Allied victory in Europe. With the defeat of Italy and Germany, the lucrative reconstruction of Europe physically and economically and its elevation to trading partner was conceived as the principal job of this institutional troika along with NATO protection from Soviet military expansion.

The mood of the whole country, however, was better expressed during President Harry Truman's administration by Eleanor Roosevelt, a tireless worker for a Universal Declaration of Human Rights and a United Nations system to realize it. Thus the United Nations was formed at the end of World War II with ambitious agencies not only to inhibit war, but to foster development and cooperation toward a world of greater sustenance, health, enlightenment and equality. During the Truman, Eisenhower, Kennedy, and Johnson years Europe and Japan were indeed rebuilt with burgeoning industry, along with continued expansion of US industry and trade.

Things changed after the Vietnam War which was ended not only by stubborn Viet resistance with Chinese and Soviet help but by US civil demand. The United Nations had little to do with the war, especially since China and the USSR exercised vetoes in the Security Council. At the same time the success of Japan, Inc., and commercial opportunity in China, along with the humiliation of Washington by the Vietnam defeat and President Nixon's resignation, led to an assertion of corporate power through the newly formed Trilateral Commission and other transnational or international groups like GATT, nominally of the UN. Like CFR, the Trilateral group drew from the global elite, but had its special neoliberal philosophy.

President Carter, himself a Trilateral member, increased the US military budget to the benefit of military contractors. Most significantly, the Trilateralists declared "an excess of democracy" and successfully shifted US government sentiment and policy, especially with President Ronald Reagan and his vice-president and former UN ambassador George Bush, toward the muscular and supposedly "technical" IMF and World Bank, and away from the more socially-minded branches of the UN-- the Economic and Social Council (ECOSOC) and the General Assembly. This continues into the Clinton administration.

The missions of IMF and World Bank, prosocial at first toward European redevelopment, were turned to the benefit of the private sector in development of the global South as European overseas empires dissolved. Retained as UN agencies on some organization charts, they came to operate under their own unaccountable boards of directors without supervision by ECOSOC, the General Assembly, or the UN Secretariat. The IMF assumed the work of loaning large sums to national banks in distress because of sudden massive withdrawals of foreign investment, so that they could help private banks meet obligations to their bond holders as well as secure government loans made to domestic businesses. The World Bank loaned large sums to massive development enterprises such as dams, road and dock facilities, often contracting with large private firms.

To the benefit of longer-term foreign investors, principally corporations, both the IMF and the World Bank in the 1980s and beyond came under transnational corporate pressure to demand "structural adjustment" conditions for loans to their relatively poor clients in Asia, Africa, and Latin America. Such programs required reduction of tariffs and corporate taxes, reduction of government programs including health and education, and the privatization of public services, thus enhancing opportunities for foreign corporations while reducing the competitive potential of regionally directed, government or cooperative agriculture and industry. The IMF and World Bank were operating like private banks themselves, investing for profit and interest repayment in foreign currency, rather than like governments for regional sustenance, development and equality according to UN principles. Thus corporations sought to augment their early profitable arrangements with agencies of the world system, whether IMF, World Bank, or UN.

Well into the 1970s the UN set up various agencies to help control and solve social problems and to help plan and exploit human and economic development opportunities. These included the Food and Agriculture Organization (FAO), World Health Organization (WHO), High Commission for Refugees (UNHCR), Children's Fund (UNICEF), Educational and Scientific Organization (UNESCO), Environmental Program (UNEP), Conference on Trade and Development (UNCTAD), Development Program (UNDP), and Center on Transnational Corporations (CTC). Although such ECOSOC agencies accounted for 80 per cent of the UN's $12 billion budget, they were not big spenders or lenders like the World Bank. Instead they were mostly technical and facilitative- monitoring, analyzing, advising, coordinating, assisting in planning, and reporting to ECOSOC, the General Assembly, and the world at large. Those agencies most sensitive to neoliberal targeting have been partially co-opted (UNESCO, UNDP, UNCTAD) or destroyed (CTC).

Phony Fix

The "Earth Charter," a set of sixteen ecological principles ardently promoted by Maurice Strong, former senior adviser to Kofi Annan and to the president of the World Bank as well as having chaired the 1992 Rio Earth Summit, serves as a coopting device when taken in context. The Charter looks like a positive alternative, but it is more a ruse. Strong writes of an ecological doomsday in 2030, emphasizes the breakdown of "law and order," and calls on us to preventively follow his Earth Charter since national representatives at Rio opted not to.

The Charter carries such admonitions as "Eradicate poverty, as an ethical, social, economic and ecological imperative" and "Affirm and promote gender equality as a prerequisite to sustainable development." Only three principles allude to instrumentalities closer than a distant horizon:
* "Prevent harm to the environment as the best method of ecological protection, and when knowledge is limited, take the path of caution." Here we may think to promote the "precautionary principle" to withhold hormonally treated or genetically modified food products before thoroughgoing proof of safety and nutrition.
* "Establish access to information, inclusive participation in decision-making, and transparency, truthfulness and accountability in governance." Here we might experiment locally with being heard in decision councils of governments and civic organizations, though the chances with private businesses would be slim.
* "Advance worldwide the co-operative study of ecological systems, the dissemination and application of knowledge, and development, adoption and transfer of clean technologies." Here we might insist on community/expert study of ecological systems, and might work through a group like the Loka Institute in Amherst, MA, to promote this and the rest.

Strong's ardor is not matched by his practicality. Admonition will not do it, certainly before 2030, without institutional change and support, about which he says nothing. His emphasis is upon individual responsibility rather than forming powerful organizations or coalitions.

Although distribution rather than production of food has always been the problem in feeding the world, agribusiness slogans emphasize growth of food supply while they corner ownership of seeds and tools. The Food and Agricultural Organization (FAO) sold out small farmers a generation ago by promoting a "green revolution" based on hybrid seeds, chemical fertilizers, pesticides, and massive monoculture farming techniques which see their apogee in present-day chicken and hog factories of the American South, and a global drive toward privatization of fresh water. Sadly, the costs of such agriculture including soil erosion, water pollution, water shortage, family destitution and disintegration, and species depletion have been left for ordinary people to bear. Part of the blame may be placed upon pressures from the corporate-dominated US Department of Agriculture, and part upon lack of coordination with UN agencies responsible for relevant research and education.

The World Health Organization (WHO) has done fine work in promoting public health departments, eradicating diseases, urging standards and good practice regarding food, biologicals, pharmaceutical products, and emergency aid to governments. Its work has also proved sensitive to its directorship, which recently was changed from a primary care and prevention orientation to politically expediency.

A word regarding selection of directors or secretaries-general: Specialized UN agencies have their own rules and practices for selecting or replacing directors, and these processes are not formally related to those of other agencies or the UN in general [Urquhart and Childers, 1996]. The secretary-general of the UN is nominated by the Security Council and "appointed" by the General Assembly, meaning that the five powers with vetoes in the Security Council informally agree on a candidate, and the General Assembly accepts or rejects. Thus, there is no formal concept of leadership coordination or continuity. It should be noted that Western choices have predominated, and that no Chinese or Russian has held an executive post in the UN system (as of 1996).

The oldest UN-related agency, the International Labor Organization (ILO), also has suffered from directorship problems, its bylaws requiring a board of representatives of business and government as well as of trade unions from each member country. The US withdrew twice from the ILO in the 1970s due to the AFL-CIO's avid anticommunism, leaving the organization and the UN as a whole vulnerable to subsequent attacks by neoliberal factions of Congress. Even worse, despite an overwhelming chorus from independent unions world-wide, ILO has no power to enforce its core principles.

Neocolonialism or Big Brother?

One could argue that corporate involvement in the UN is a neocolonial strategy of providing relief and stability to "developing" countries while promoting corporate products and a North oriented world trade system. For example, the Bill and Melinda Gates Foundation earmarked $26 million for a UNICEF program to wipe out tetanus in infants, while Becton Dickinson & Co. donates disposable syringes, and in some of the same countries oil companies help train people in entrepreneurship and human rights. Citibank helps run a small loan program for entrepreneurs. All of these products and services are imported and do little for the development of domestic industry or self-reliance.

The UN has advisory services in place, and companies can use them as vehicles for their "common" purposes. "The UNDP gives us contact with their partners in new countries," says a project manager at Orientation.com, "and with information that we can use in our other portals." "Our investment is not under the veil of philanthropy," said the president of Rebel.com. “"t is coming out of our marketing budget." "We aren't even asking for product donations," says a spokesperson for the UN Population Fund. "If the companies sell contraceptives to the middle classes in [Egypt and India], it will free up our supply for poor people." But, we may ask, what about fostering domestic manufacture of contraceptives in these countries?

Corporate motivation to be involved in the UN may be a straightforward plan to reset the UN's and the world's economic, social, and ecological rules to favor TNCs, to restrict political rules and keep national militaries out of governance and under NATO control, and thus to ensure corporate rule. In 1997 Helmut Maucher remained on the Nestle board but resigned as CEO to become CEO of the International Chamber of Commerce (ICC) and leader of the European Roundtable of Industrialists. Unlike our local Chambers of Commerce, the ICC is made up of several hundred large TNCs. Maucher wants ICC formally to represent business in general in the councils that matter -- the WTO and the UN with its codes of conduct, standards, and international agreements. "We want neither to be the secret girlfriend of the WTO nor should the ICC have to enter the World Trade Organization through the servants' entrance," he said in an interview.

Civil Society Power to Redesign the UN

Maucher is concerned, however, about civil society organizations. Early in his tenure as ICC chief executive he said, "We have to be careful that they do not get too much influence." In fact, civil society organizations (CSOs, or in UN bureaucratise, non-governmental organizations, NGOs) had much to do with the formation and structuring of the UN, and sustaining it in its first fifty years. Civil society also has everything to do with democratizing the UN in its next ten or twenty years, witness the movement for a Peoples Global Assembly leading perhaps to an elected world parliament along the lines of the European Parliament. In a sense CSOs are vying with corporations not just for control of the UN, but for its redesign. The dormant Multilateral Agreement on Investment (MAI) and now extensions of the "services" and "intellectual property" parts of the WTO are the ICC's design being carried over into the UN through its secretary-general. Since the surfacing of MAI more civil society voices have been calling for democratic redesign of all key international institutions, a prime example being the Alliance for Democracy's "Common Agreement on Investment and Society."

The strategy of the corporations, led by ICC, is different from that of CSOs. Increasing thousands of civil society organizations have registered with the UN as observers and consultants, and often publish their observations, hopes, concerns, and foreign service activities. Corporate strategy, on the other hand, has been to influence national governments through their cabinet ministers in private conclaves such as the World Economic Forum (Davos) and in hotel rooms at summit meetings such as G-7 and UN gatherings on population, environment, housing, and so on. Corporations also ingratiate themselves with the public by supporting some popular cultural events, as well as through television advertising and civic sounding slogans. With a United Nations based on national governments rather than popular election, it is hard to beat influence obtained by the "revolving door" of corporate/government appointments, not to speak of employment and consumer links of ordinary people to large corporations. Still, CSOs outnumber TNCs, and American politicians are influenced by the small numbers of citizens who take the trouble to express their political wishes.

At the January 2000 World Economic Forum in Davos, where Kofi Annan promoted his Global Compact with business, a number of dissenting CSOs circulated a "Citizens Compact." Thus far some 77 organizations have signed on world-wide at , including Third World Network, Ecoropa, Institute for Policy Studies, World Development Movement, United for a Fair Economy, and so forth. The Compact calls for
* Compulsory legal standards and monitoring for TNCs
* More UN tools to protect human rights and the environment
* UN help to governments and people to develop such legislation
* Conformance to these standards by WTO, IMF, World Bank, etc.
* UN to help corporations conform, not as "partners"
* UN avoidance of brand or product endorsement
* Selective UN association with TNCs, with community input
* Primary UN funding from governments; restrictions regarding corporate donations
* Full transparency in all UN/private sector dealings.

Consistent with this Compact, Walden Bello of Focus on the Global South (Bangkok) underlines the importance of UNCTAD. The Conference was formed under ECOSOC in 1964. It quickly became the voice of the 77 or so "developing" countries with the strong leadership of Argentine's Raul Prebisch. He called for negotiating price floors to stabilize commodity prices, preferential tariffs to make up for disadvantages imposed by colonial powers, expansion of foreign assistance, and protections for domestic industrialization and rapid transfer of technology. Mechanisms were put in place at UNCTAD 1976 and IMF was pressured to collaborate with a special Compensatory Financing Facility to ease commodity pricing problems. Within a few years Washington's liberal internationalists were out of favor with conservative think-tanks, and the UN became a whipping boy because of regulatory and redistributive policies like those of UNCTAD. "Structural adjustment" programs became the norm in IMF and World Bank lending. At UNCTAD 1992 the Northern powers successfully opposed Southern intrusions into the Uruguay Round of the General Agreement on Tariffs and Trade (GATT, soon to become WTO) which might condition corporate globalization. It thereby clipped UNCTAD's negotiating wings, effectively neutralizing it.

The Asian financial crises of the later 1990s and the December, 1999 debacle of WTO's Seattle meeting called into question the legitimacy of IMF, World Bank, and WTO. The time is right, Bello believes, for UNCTAD to roar back with globally fair policies -- social and ecological economics including the "principle of subsidiarity in production and trade -- that whatever can be produced locally with reasonable cost should be produced and traded locally." UNCTAD's Secretary General Rubens Ricupero has called for UNCTAD to become "a world parliament on globalization" with legislative and executive powers. Cooperating with UNEP, UNDP, and civil society, UNCTAD could lead the way to a democratic, pluralistic world economic system.

We can only add that the restoration of CTC, the Center on Transnational Corporations, must be part of such a reform for transnational corporate power to be brought under civil authority and restore the prestige of the United Nations.

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Contact: DLewit@igc.org
617-266-8687 Boston MA


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