An historic experiment.

• Position: The Global Compact

Excerpts from Georg Kell and David Levin's "The Evolution of the Global Compact Network: An Historic Experiment in Learning and Action"

In his address to the World Economic Forum on 31 January 1999, United Nations Secretary-General Kofi Annan called on global business leaders to embrace nine shared values and principles in the areas of human rights, labour standards and environmental practices. His well-received proposal catalyzed the rapid, dynamic formation of a global network of unprecedented potential. The Global Compact network--consisting of several hundred companies, dozens of non-governmental organizations (NGOs), major international labour federations and several UN agencies--seeks to collaboratively contribute to a more stable, equitable and inclusive global market by making its nine principles an integral part of business activities everywhere.

The instability of the global market in its present form derives in part from the absence of strong social and environmental pillars to balance the developed system of economic exchange. The current global governance structure provides extensive rules for economic priorities, such as intellectual property rights, but lacks commensurate measures to protect the environment and human rights. The longevity of globalization will remain threatened until this imbalance is rectified. The international economic order must also become more inclusive by giving the billions of marginalized poor open access to global markets in a manner that guarantees them equitable opportunities for advancement. This primarily requires a commitment by those who currently dominate the global market to assist the disadvantaged in building their economic capacity through long-term, sustainable development. It also necessitates the elimination of market asymmetries inimical to developing countries, such as trade barriers and subsidies in ar eas where the developing world has a comparative advantage.

The Global Compact cannot resolve all of the deficiencies of global capitalism, but it can make a significant contribution by laying a foundation of shared values and harnessing the skills and resources of the private sector. It does not substitute for effective action by Governments, nor does it present a regulatory framework or code of conduct for companies. Rather, the Global Compact is conceived as a value-based platform designed to promote institutional learning, with few formalities and no rigid bureaucratic structures.

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