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This research paper aims to look at the merits and challenges organisations face in relation to the United Nations Global Compact

April 27, 2019 0 Comment

This research paper aims to look at the merits and challenges organisations face in relation to the United Nations Global Compact (UNGC). The UNGC is a body founded by United Nations with a mandate to prevent the infringement of Labour and Human Rights, prevent Anti-Corruption and protect the Environment through collaboration with member entities (United Nations, 2011). This paper will have focus on Human Rights. The paper aims to critically interrogate the pros and cons the UNGC where Human Rights are concerned. The UNGC has adopted two principles associated with human rights. Principle 1; “Business should support and respect the protection of internationally proclaimed human rights and Principle 2: make sure not to be in complicit in human rights abuses” (UN Global Compact, 2011, p.5).

GLOBAL COMPACT
UNGC is an initiative with an objective to improve and disperse the interest of international economic development using voluntary business policies and actions (Williams, 2004).
The UNGC founded in 2000, is both a policy and a framework for companies committed to sustainability and responsible business practices (UN Global Compact, 2011). Moreover, it welcomes organisations to partake in business advancements on human rights (Lau, Fisher, Hulpke, Kelly & Taylor,2017). With over 12, 000 signatories in over 160 developed and developing countries, the UNGC is the largest initiative (Rasche, Waddock & Mcintosh, 2013).

Being a member of the UNGC has great benefits which includes but not limited to the heightened corporate citizenship and network opportunities (Arevalo & Aravind, 2010). It also improves the company reputation and provides an understanding of the financial needs and promoting access to capital (Global Compact, 2018).

However, most businesses in the US are not part of the initiative because fear of public exposure. Instead, most prefer to start their own charities (Byrd, 2009). Furthermore, it appears that corporations do not have a clear understanding on how accountability is measured and expectations of the UNGC (Bryd,2009). Corporations hesitate to join because of negative perceptions and comments on the network. While other companies join only to boost their corporate brand and to be good corporate citizens (Arevalo & Aravind,2009). According to Bryd (2009) stated that the UNGC does not develop new social responsibility strategies hence limited somewhat. There is a concern that the Compact is more helpful to developed countries rather than aiding the countries that need them the most (Knudsen, 2011)

The UNGC is an important framework that companies can benefit from as it presents many opportunities for future developments and learnings from member organisations.
The initiative also aids in building relationships between stakeholders, investors and employees.

HUMAN RIGHTS
Natural rights are believed to be the same and unchallengeable rights, that are inherent in all humans of any sex, background, and other personal features (Ruggie, 2013). Basic rights include; liberty, privacy, health, life, and security as well as an adequate standard of living (UN, 2018).
While Human rights are the some of the most important rights it is apparent that not all individuals comprehend this. In addition, human rights are most the likely mishandle rights as pursuing them does not necessarily bring any direct financial benefit, particularly for Multinational Companies (MNCs) (Li & Gaur, 2014). Truthfully, it is frequently in the interest of businesses to comply with or even be an accessory to, human rights infringements by the host governments, as a result for economic favours (Alford, 2008).

The development of UN Guiding Principles on Human Rights was created mainly on the grounds of MNCs variable responses to Human Rights and the weak bargaining power of the state, particularly in developing countries (Javed Siddiqui, 2016). Mary Robinson, (n.d.). the UN High Commissioner for Human Rights states that by following the Global Compact Human Rights guidelines you are entitled to a healthy profit and it is good corporate citizenship as in turn employee’s benefit. Many companies find strength in their human rights record and it is the major key performance indicator all over the world.
UNILEVER
Unilever as a business provides a classic example of protecting and respecting Human Rights. They pride themselves in promoting respect for human rights in their value chain as a crucial manner to improving people livelihoods and furthering Unilever’s contribution to the UNGC. As part of their transparent approach, Unilever has also made a public declaration on their commitment to enhance the lives of millions of people by 2020. They also recognize that business has the responsibility to respect human rights and the ability to contribute and promote to positive human rights impacts (Unilever, 2017)

It is argued that human rights do not signify a complete truth, they represent ideology, which is self-contradictory to the basic idea of human rights itself. Hence, there is a need for redefinition of the main presuppositions of modern conception of human rights represented in the Universal Declaration of (Ivic, 2014).Cultural relativist discards rights as they feel they are not well-matched with their culture, others say human rights should be differentiated between formal and actual human rights (Bulgan, 2015). Many authors reason that the Universal Declaration of Human Rights is Western-imperialist but Rawls’s idea which would be acceptable to different societies making human rights more familiar to different cultures and peoples. This would lead to better implementation of human rights (Bulgan,2015).

THE CASE OF YAHOO ; CHINA
According to (Arevalo ; Aravind, 2010), the case of Yahoo ; China provides a clear demonstration of modern violation of the Human Rights Principle 1. Yahoo, an American founded organisation that purports to provide internet services around the world, with an aim of empowering communities to create valuable experiences built on trust arguably failed to protect its users Wang Xiaoning and Shi Tao; two Chinese citizens by divulging data provided to Yahoo by the two under assurance of protection. Yahoo which also operates in China where the laws is completely different to the US was compelled to divulge information to the Chinese government resulting in the capture of the 2 Chinese nationals and a 10-year prison sentence (Zheng, 2013). Yahoo’s compliance and disclose to the Chinese authorities received great criticism in the United States (Palenchar & Freberg, 2008).
In my opinion, Yahoo was challenged as China is a country overly involved and protective on its reputation. Also, Yahoo was compelled to abide by the Chinese laws for companies operating in China making it difficult for them to abide by the requirements of Principle 1 of the Human Rights. While it is imperative that companies operate within the provided regulatory framework it is equally important that they protect and respects the rights of people.

SHELL & THE NIGERIAN GOVERNMENT
The government of Nigeria was a compliance on the human rights violation committed by the Royal Dutch Shell. Evidence was provided that showed the agreement between shell and the government to silence protests. Even though the government knew that this will lead to war in the Orogoniland region (Amnesty International, 2010). The Bodo community in Nigeria, filed a lawsuit against Shell in London in 2012 looking for compensation for the oil spills that happened in 2008 and 2009 in the Niger Delta (Leigh Day, 2014). In Shell was found guilty and fined 55 million pounds to pay for cleaning up of the spill (Shell, 2015).
The above case is a proper example of how the government of Nigeria was in complicit with the human rights abuses by Shell, Nigeria did not abide by the requirements of Principle 2 of the Human Rights.

RECOMMENDATIONS

The UNGC’s objective is to assist companies to observe human rights and not abuse them. However, I believe that this is only good on paper and not quite evident in practice. The body does not follow up on companies nor interrogate how they achieve the human rights principles. Rather companies are required to report their progress to UN annually this thus makes the validity and integrity of information /data provided questionable. Hence, I recommend that the UN develop a more intuitive monitoring tool that will eliminate bias and provide quality data that can be utilized to improve the Human Rights Principle further. Moreover, the UNGC should consider becoming mandatory for MNCs to rebut their common use of power and resources with a requirement for zero tolerance of abuse citizens’ rights.

Furthermore, many have criticized the UN Global Compact as a western premise that is not inclusive of all cultures. Thus, I propose that this should be interrogated, and a more inclusive body developed. Governments and Private Companies should also work in collaboration with the UNGC in implementing rules that help reduce the infringement of human rights.

Conclusion

In closing, as many MNCs have increased their investments in developing countries, I recommend that governments of developing countries should be more attentive to how these companies operate within the provided regulatory frameworks, deter and enforce laws that address the violation the rights of humans. Companies should also collaborate with the UNGC to exercise appropriate principles and improve livelihoods, respect labour practices and employees for improved performance. I recommend that organisations think about the application of the theoretical model as the approach endeavors to comprehend the principal major powers that impact MNC practices. (Li & Gaur, 2014).