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The High Commissioner for Human Rights Developing an Ethical Globalization: A role for business schools?

The Michael Smurfit Graduate School of Business University College Dublin
Dublin, Ireland, 18 January 2002

It is a pleasure to be here today at the Michael Smurfit Graduate School of Business, University College Dublin. I believe this is the first time I have had the opportunity during four and a half years in the post of United Nations High Commissioner for Human Rights to interact with students and faculty from a school of business. I am, of course, particularly pleased to be able to do so here in Ireland at one of the leading business schools in Europe. I shall be speaking about globalization today, and where better to discuss that subject than Ireland, recently ranked by Foreign Policy Magazine and A. T. Kearney Consultants, as by far the world's most globalised economy.
I would like to thank my friend Jerry Liston for extending the invitation to visit the Smurfit School. A year ago, when we ran into each other at the annual World Economic Forum meeting in Davos, Switzerland, we both had the real sense that Davos had become, like many other international gatherings, a virtual prison. The multiple security clearances, armed guards and barbed wire fences that authorities felt were necessary to ensure the safety of participants were seen by many as yet another example of what was wrong with globalization. It was clear that we shouldn't be building more walls, we should be building more bridges.

But as you know, the protests against globalization only intensified in Genoa at July's G8 meeting. And some commentators have argued that the horrible events of 11 September were just the latest and most extreme manifestation yet of a growing "backlash against globalization" that will continue if the world remains on its present course.

So we would be right to ask, "where do we go from here?" Is the global economy an unstoppable force or does it risk collapse because of mounting concerns about its current path? If there are ways to change it, to make it benefit all people, where do we begin? What role would we expect the corporate sector to play given its increased power and influence in the world? What could all of you as students and faculty do to advance our knowledge of how business can ensure value for shareholders and for society? These are some of the issues I would hope we will be able to discuss.
My message today is this - the time has come to move beyond the arguments for or against globalization. Our task is to ensure that the promise globalization holds for fostering higher standards of living and more open and inclusive societies are realized for all people. All parts of society have both a vested interest and a shared responsibility in working together to shape the ethical foundations of a new globalization that ensures respect for the human rights of all people.

That is also the message of an interesting book I recommend you read if you have not already done so. It is called An Open Letter on Globalisation – the Debate . The book is an initiative of the Prime Minister of Belgium, Guy Verhofstadt, who was President of the European Council until the end of 2001. He represented the European Union at Genoa and the book is a response to the violence there.

He wrote an open letter post Genoa and post 11 September to anti-globalization protesters. In the letter, he said that the protesters may be asking many of the right questions. But did they have the right answers? He later convened a conference in Ghent to which he invited a number of globalization critics and others including myself. What emerged as a consensus was the need for a new approach which Guy Verhofstadt termed "ethical globalization". It is that concept I would like to address.

Towards Ethical Globalization

Secretary-General Kofi Annan, in his Nobel lecture, touched on the central challenge for the future of globalization when he reminded the world:

"No one today is unaware of this divide between the world's rich and poor. No one today can claim ignorance of the cost that this divide imposes on the poor and dispossessed who are no less deserving of human dignity, fundamental freedoms, security, food and education than any of us. The cost, however, is not borne by them alone," he added. "Ultimately, it is borne by all of us - North and South, rich and poor, men and women of all races and religions."

Building an ethical and sustainable form of globalization must begin with the recognition of shared responsibility for the protection of human rights. Over 50 years ago, the drafters of the Universal Declaration of Human Rights stressed the link between respect for human rights and freedom, justice and peace in the world and called for a just international and social order.

But let me be clear in stressing that increased cooperation along with better international policy and law to respond to the needs of the developing world can only succeed if national systems meet the test of good governance.

Respect for human rights remains the primary responsibility of national governments. Independence of the judiciary, freedom of opinion and expression, open and fair elections – all provide the legal framework for democracy. They also contribute to a healthy environment for investment and economic growth.

Yet the reality is that in many countries, we have seen the breakdown of national government institutions, weak legislative and judicial environments and the decline in the provision of basic services. Do we leave people in these countries to their own fate? Or do we accept that we have some obligation to make their lives better?

The point that is often not made clearly enough is that human rights are more than just good ideas or distant goals to work towards. The principles of the Universal Declaration have been translated into international law, in two International Covenants on Civil and Political Rights, ratified by 148 States and on Economic Social and Cultural Rights, ratified by 145 States. Ireland is among the States that are bound by these treaties.

Progress has been made in promoting throughout the world the idea of equal human rights for all. But what of the millions who suffer from deprivation of the basic means of life or who live under oppression and discrimination ? When they stand up to claim those universal rights, what are we to say to them? Let me offer some examples of the direction I believe we should be moving.
One practical expression of cooperation and shared responsibility that has been repeatedly called for is for developed countries to halt the slide in Official Development Assistance and to be true development partners for the Least Developed Countries. I note that Ireland is making progress on ODA and is set to reach its interim objective of 0.45 per cent GDP in 2002 and to reach the internationally set target of .7 GDP by 2010.

A number of recent proposals have highlighted the need for increased cooperation around key areas. For example, UK chancellor Gordon Brown has proposed a US$50 billion a year investment fund for development targeted at building the capacity of developing countries to improve education and health systems.

The World Health Organisation Commission on Macroeconomics and Health, led by Harvard economist Jeffrey Sachs, has proposed that rich countries spend an extra one-tenth of 1 percent of their economies on the health of the poor. If all wealthy countries cooperated, it would add $38 billion a year to health spending by 2015. The commission argues that if that money went to poor nations that also spent more and improved their health care systems, these countries would see at least $360 billion a year in economic gains, lifting millions of people out of poverty and saving an estimated 8 million lives a year.

But as critical as increased and targeted aid clearly is, it won't be enough. Governments must also make more determined efforts to address the imbalances in global trade which currently favor rich over poor. Developing countries have heard many promises over the years but have too often found that, in practice, access to markets where they hold competitive advantages has been denied. I applaud the initiative of the European Union to open up markets to products from the Least Developed Countries under the "everything but arms" programme. This is a positive step forward.

An ethical globalization will also mean finding the right balance between public and private concerns and monitoring the impact of policy decisions. This is where the role of the private sector as an actor in improving how globalization works becomes increasingly clear. For example, the recent debate over access to HIV/AIDS drugs in developing countries has highlighted the potential conflicts between the intellectual property rights of pharmaceutical companies which are vital for innovation and research and the rights of people facing life threatening disease to adequate health care. Making globalization respond to the needs of all people means finding ways to address such challenges.

A recent report by the World Bank includes an innovative proposal by Jean Lanjouw through which pharmaceutical companies would be able to choose to have their intellectual property rights in either developed or developing country markets, but not both. So, in the case of drugs that fight HIV/AIDS, companies who did the research and development primarily with rich country markets in mind would benefit by choosing patents for rich country markets. The drugs would be freely available in developing countries, but producers there could not export cheap drugs back to the rich countries. As the Bank report points out, the proposal would not discourage pharmaceutical companies from continuing research and development on global diseases for which the main market is in developing countries.

Another critical area where the private sector must play a bigger role if globalization is to benefit more people is employment generation. There are an estimated 66 million unemployed young people in the world today making up more than 40% of the world's total unemployed. What future can they expect without the opportunity of decent work? To highlight the urgency of the problem, the ILO estimates that the global economy will need to accommodate half a billion more people in developing countries over the next 10 years.

The UN has launched a Global Agenda for Employment as a way to focus the energies of UN agencies, the Bretton Woods Institutions, national governments, employers and trade unions on addressing these challenges.

The Global Compact

We must find ways of working in coalitions of common cause if globalization is to be sustainable and benefit all people. At the last session of the UN General Assembly, a special agenda item entitled "Towards Global Partnerships" was included for the first time. The Assembly recognised the need for increased efforts to enhance cooperation between the United Nations and all relevant partners, in particular the private sector.

The UN Global Compact initiative, which was formally launched by the Secretary-General in July of 2000, is becoming an overall framework through which the UN is pursuing its engagement with the private sector.

The Compact calls on business leaders, trade unions and NGOs to join forces behind a set of core values in the areas of human rights, labor standards and the environment. Let me outline briefly these three areas. With respect to human rights, corporations should ensure that they uphold and respect human rights as reflected in the Universal Declaration of Human Rights and are not themselves complicit in human rights abuses. In the area of labour standards, businesses should uphold freedom of association and collective bargaining and make sure they are not employing under-age children or forced labor, either directly or indirectly, and that, in their hiring and firing policies they do not discriminate on grounds of race, creed, gender or ethnic origin. And in relation to the environment, companies should support a precautionary approach to environmental challenges, promote greater environmental responsibility and encourage the development and diffusion of environmentally friendly technologies.

Many business leaders contend that if they were to act responsibly in countries with weak labor and environmental rules they would no longer be competitive. But times are changing. Consumers and shareholders alike are increasingly looking to common yard-sticks to measure corporate behavior.

That is why several hundred companies from countries such as Russia, China, Brazil, India, Germany, Norway, Indonesia, Thailand, the United Kingdom, the United States and other UN member states from North and South have responded to the Global Compact and are working with labour unions, civil society and the UN to make its principles part of the strategic vision and everyday practices of companies in all regions. There are, I must note, no Irish companies to date involved and obviously I would like to see that changed.

Let me explain how we are involving the private sector in our human rights work at the UN. The Global Compact provided the framework for a private sector contribution to last year's World Conference against Racism through analysis and reflection on some very interesting initiatives by six companies from five continents on diversity, equality and non-discrimination in the workplace and surrounding communities. The Secretary-General participated in a high-level dialogue on these issues with Global Compact participating organizations on the opening day of the World Conference. A multi-stakeholder workshop looked at partnership approaches to fighting discrimination and fostering diversity and a panel we co-hosted with the ILO brought together trade union, company and UN representatives to share experiences of implementing equal-opportunity and diversity policies within organisations.

The resulting report of company experience titled "Discrimination is Everybody's Business" is available on the Global Compact website. I am also pleased to note that the initiative has inspired a number of national level initiatives between business and civil society that are getting underway this year.

We are also developing our role as a facilitator of dialogue with the private sector. For example, last December our Office hosted a workshop in Geneva between representatives of indigenous peoples and natural resource, energy and mining companies. The workshop discussed the relationship between those companies and indigenous peoples concerning the questions of land, consultation and revenue sharing and developed recommendations for further study and joint action.

The Global Compact is a voluntary initiative to promote good corporate citizenship. But I want to stress that it is not, and must not be, a mere public relations exercise. A commitment to the Global Compact must lead to concrete actions in support of the core principles.

A significant step towards ensuring the commitment of participants was taken earlier this month in the creation of a Global Compact Advisory Council which brings together senior business executives, international labor leaders, and heads of civil society organizations from across the world. The Council is the first UN advisory body composed of both public and private sector leaders, who together will assist the Secretary-General in his effort to promote cooperative solutions to the challenges of globalization.

A role for business schools

Finding cooperative solutions means learning from the experiences of others. It means understanding what works and what doesn't. This is clearly an area where much work remains to be done and where business schools are uniquely placed to assist.

One of the central goals of the Global Compact is the development of a Learning Forum which ultimately will serve as an information bank of disparate experiences - some successful and some not - of company efforts to implement the Compact's nine principles. By undertaking this work we hope to develop the elements of good practice both in addressing specific human rights, labour and environmental issues but also across industry sectors. This is the way we hope the Compact's principles may be embedded into the business practices of participating companies from around the world.

Are business schools ready to be a part of this effort to make globalization work for all? A recent survey of business schools by the Aspen Institute and the World Resource Institute suggests very little is being done to integrate social and environmental concerns into required MBA course work or to undertake rigorous research around these areas. The survey, titled "Beyond Grey Pinstripes 2001" notes that while business leaders are under increasing pressures to solve complex social and environmental problems, business students are not being given the tools to prepare them for addressing these challenges.

Let me close by suggesting three ways that students and faculty here at the Smurfit School could join our efforts to make a new globalization possible:

  1. Within the Global Compact, we at the UN are in real need of academic partners to help us study how companies are implementing their commitments to the Compact principles. By becoming part of our Learning Forum, you would have a new window into the challenges companies face in being both good corporate citizens and profitable.
  2. I would encourage all of you to consider how you could bring your own networks together to multiply these efforts. Perhaps a conference of students and faculty from European business schools to share experiences and plan joint action around corporate citizenship issues could be organized? My Office would be pleased to assist you in making such an event possible.
  3.  I would urge you also to consider what more could be done by the private sector to help close the technology gap between the developed and the developing world. You all know that this gap is widening by the day. The terrific benefits of modern technology are not reaching many millions of poor people on the planet. Research and development of new technologies are overwhelmingly directed at rich country problems.

What a contribution it would be if the business and academic communities were to take the lead to share their expertise and skills with the poorest countries of the world. Think of the progress that could be made in addressing the crises of public health, agricultural productivity, environmental degradation and demographic stress which so many people have to face.

I truly believe that this is the only way we can move forward – through dialogue, a greater recognition of our shared responsibility and a commitment to working together to develop a new principled globalization.

Thank you.