The Multilateral System: brief history & current role

Sustainable Development

ISG, September 30, 2010

At the creation

Dumbarton Oaks conference, August 1944, discussed the proposal for the establishment of a “General International Organization” comprised of a small “Executive Council” (peace and security), a General Assembly, an International Court of Justice, and autonomous specialized agencies.

San Francisco conference, June 1945: The UN Charter is adopted by 51 states (non-profit groups are present).

Article 2.1 “The Organization is based on the principle of the sovereign equality of all its Members.”

Today the UN has 192 member states. The Bretton Woods conference, July 1944, created the IMF and the

World Bank (International Bank for Reconstruction and Development, IBRD)—the two of them seen as carrying the weight for the construction of an open financial and economic system.

The compromise of embedded liberalism

This organization of the international system, according to which the Bretton Woods institutions (IMF, WB) would ensure an open trading and financial system, and the UN would be tasked with social, cultural, health, and poverty issues, has been called “the compromise of embedded liberalism”.

Sustainable development amounts to the same thing, for the 21st century. We’ll come back to that.

ECOSOC and the “consultative status”

The proposal discussed at Dumbarton Oaks envisaged an economic and social council under the aegis of the General Assembly, “to promote solutions of economic and social problems, including educational and cultural problems.”

54 members, elected by the General Assembly for overlapping three-year terms. (Chapter X of the UN Charter)

Article 71 of the Charter: ECOSOC may plan for consultations with non-profit groups. This became the “consultative status” according to which non-profit groups (including business groups) are accredited to ECOSOC.

41 NGOs had “consultative status” in 1941; 700 in 1992; 3,287 today! (3.7 X in 18 years)

At the UN’s creation, only one business organization took advantage of Article 71 to obtain consultative status.

A short history of the ICC

The International Chamber of Commerce (ICC) is established in 1919 in Atlantic City, with Paris HQ.

www.icc.org . 1st president, and a main proponent of ICC, was former

French minister of commerce, Etienne Clémentel. ICC was accredited to the League of Nations. Beginning of business diplomacy: ICC attends the

League of Nations’s economic conferences during the interwar period.

ICC participates in creation of the Dawes Commission. German reparations plans are negotiated with the crucial participation of large banks.

ICC (continued)

In 1938, ICC publishes “Merchants of Peace”. IBM Founder and then ICC President Thomas J. Watson traveled to 21 European cities to prevent outbreak of war.

In the US business was involved in getting the UN Charter ratified. Business, labor, non-profit presence at San Francisco conference.

1945: ICC asks for consultative status with ECOSOC. Granted in 1946 at Level A, the highest level.

Labor unions also obtained consultative status within ECOSOC after establishment of the UN.

ECOSOC has a deliberative role only. The General Assembly has the votes!

For the majority of the post-war era, a global partnership for development was not possible due to…

The Cold War, which split the world into two spheres and made cross-sector collaboration impossible.

Colonization and its aftermath, decolonization, which reinforced the split. As countries gained independence, some joined the Soviet block. Decolonization led to protracted, painful conflicts in many countries, which made the problems of poverty and development a lot worse.

Things began to change in the 80s

The Asian path to development disproved the Socialist model. The Newly Industrialized Countries (NICs) follow a different route: free trade, services, and the production of small electronic goods.

Foreign Direct Investment (FDI) to these countries increased. They were also debt-free.

Command economies failed; reforms preceded the breakup.

A liberal wind blew on the US and Europe. Elections of Ronald Reagan and Margaret Thatcher. Privatizations in western Europe.

The stage was set for multi-stakeholder partnerships

Breakup of the Soviet Union, transition to the market of command economies. EU integration moves at full speed. Maastricht Treaty for financial integration signed in 1992. Euro introduced in 2002.

Internet and email create a virtually borderless world. Enables the creation of global NGOs.

Kofi Annan elected UN Secretary-General in 1997. ICC visits him in 1997 and subsequent years and

proposes to re-activate the UN-business partnership envisaged in the UN Charter.

Global Compact formulated at World Economic Forum in January 1999, introduced in July 2000.

www.unglobalcompact.org

The major agreements of sustainable development

Rio 1992, Johannesburg 2002, Rio 20 (2012). Kyoto Protocol, adopted Dec. 1997, entered into force in Feb. 2005. 187

countries had ratified by end of 2009. Not the US. COP 15=Copenhagen (2009), COP16=Cancun (Dec. 2010) UN Global Compact in 2000. UN Financing for Development conference in Monterrey, Mexico, 2002.

(with various follow ups) UN Millennium Development Goals (MDGs) adopted in 2000. NEPAD: New Partnership for Africa’s Development. (2001) “Objectives are

to eradicate poverty; to place African countries, both individually and collectively, on a path of sustainable growth and development; to halt the marginalization of Africa in the globalization process and enhance its full and beneficial integration into the global economy; to accelerate the empowerment of women.” www.nepad.org

Extractive Industries Transparency Initiative (EITI), launched by Tony Blair at Johannesburg Summit, 2002.

The UN Global Compact

www.unglobalcompact.org Launched 10 years ago as the first UN initiative

engaging business in adhering to 10 principles seen as necessary for sustainable globalization.

“By doing so, business, as a primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.”

Now has 7,700 signatories in 135 countries. Business Leaders’ Summit was held in NY, June 24-25,

2010 on occasion of 10th anniversary. While not yet an 11th principle, in March 2010, 39 lead

signers endorsed the UNIFEM Women’s Empowerment Principles.

UN Global Compact’s 10 PrinciplesHuman Rights Principle 1: Businesses should support and respect the protection of

internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.   Labour Principle 3: Businesses should uphold the freedom of association and the

effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and

occupation.  Environment Principle 7: Businesses should support a precautionary approach to

environmental challenges; Principle 8: undertake initiatives to promote greater environmental

responsibility; and Principle 9: encourage the development and diffusion of environmentally

friendly technologies.    Anti-Corruption Principle 10: Businesses should work against corruption in all its forms,

including extortion and bribery. 

Two major points about the GC

The authority of the principles is ensured by their sources: UN Universal Declaration of Human Rights; ILO Declaration on Fundamental Principles and Rights at Work; Rio Declaration on Environment and Development (1992), and the UN Convention against Corruption. (all conventions adopted by the GA)

The GC is the reformulation of the “compromise of embedded liberalism” for the context of globalization. As in the post-WW II era, today the WTO, the IMF, and other mechanisms ensure the openness of the trade and financial system. BUT for this to work, there must be a mechanism that equally protects and secures the respect of social and environmental norms. That is the idea behind the GC: to provide a normative system that ensures that the fundamental values of sustainable development (labor, human rights, environment, governance) are embedded in the economy.

Modes of participation

Businesses, NGOs, business organizations, labor academia & cities can all participate with different roles.

Companies must meet five requirements: 1. adopt the principles; 2. integrate the principles in decisions at the highest level (Board); 3. contribute to objectives of development (MDGs) through partnerships; 4. report on implementation in the annual or sustainability report (“communication on progress”); 5. advocate for the principles.

The MDGs, or the Millennium Development Goals: “End Poverty by 2015”

In September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together at United Nations Headquarters in New York to adopt the United Nations Millennium Declaration, committing their nations to a new global partnership to reduce extreme poverty and setting out a series of time-bound targets---with a deadline of 2015---that have become known as the Millennium Development Goals. http://www.un.org/millenniumgoals/bkgd.shtml

The MDGs provide a framework for engaging the multilateral system by the year 2015, in partnership with business, in 8 major areas of work, each of which is subdivided in several targets.

The 8 goals: eradicate extreme hunger; achieve universal primary education; promote gender equality and women empowerment; reduce child mortality; improve maternal health; combat HIV-AIDS, malaria and other diseases; ensure environmental sustainability; develop a global partnership for development.

Goal # 7: sustainability

This area has four targets:

1. integrate the principles of sustainable development in country policies and programs and reverse the loss of environmental resources; 2. reduce biodiversity loss; 3. halve by 2015 the proportion of the population without sustainable access to safe drinking water and basic sanitation; 4. by 2020 to have achieved a significant improvement in the lives of at least 100 million slum dwellers.

World Bank mapping of all MDGs indicators by region, year, country, etc.

http://www.mdg.collinsindicate.com/

The CSO world: heterogeneous and growing

Sustainable Development

ISG, September 30, 2010

Recalling the origins of civil society

In the 19th century, associations coalesced around the issues of labor (union movement), the abolition of slavery, and women’s rights. The main religions played a lead role in the organization of civil society.

Environmental NGOs grew much later, and especially after 1960. Article 71 of Chapter X of the UN Charter grants consultative status

to organizations that are neither governments nor member states. Resolution 288 (X) of ECOSOC dated February 27, 1950 defines an

“international NGO” as "any international organization that is not founded by an international treaty".

Agenda 21 recognized the vital role of NGOs and other "major groups” in sustainable development. (Chapter 27)

The stage was set for significant participation of civil society in the debates and mechanisms of sustainable development.

Definitions and links

World Bank definition: “the term ‘civil society’ refers to the wide array of non-governmental and not-for-profit organizations that have a presence in public life, expressing the interests and values of their members or others, based on ethical, cultural, political, scientific, religious or philanthropic considerations. Civil Society Organizations (CSOs) therefore refer to a wide of array of organizations: community groups, non-governmental organizations (NGOs), labor unions, indigenous groups, charitable organizations, faith-based organizations, professional associations, and foundations”.

Center for Civil Society / University of California, Los AngelesCentre for Civil Society / London School of EconomicsCivicus: World Alliance for Citizen’s ParticipationOne World NetworkDevelopment Gateway - Civil Society Page 

CSO Net, the Civil Society Networkhttp://esango.un.org/irene/index.html

The State of the NGO world

Over 50,000 NGOs were internationally active in 2006. (source: Yearbook of International Organizations.)

CSOs receive funds but also disburse them. According to OECD, in 2006 CSOs provided $15 billion in international assistance.

Their sources of funding include: governments; foundation grants; membership dues; corporate/corporate foundation grants; gifts from philanthropists. Concept of “matching funds”.

CSOs advocate, lobby, boycott, but also manage projects. NGOs employ a mixture of specialized staff, volunteers and interns.

The NGO world, however, is becoming more and more professional. In the past 20 years, the non-profit sector became a career track.

Since 2001, the World Social Forum (WSF) meets annually on a different continent “to seek alternative to neo-liberal policies”.

Two types of players

There is a radical difference between increasingly professional NGOs, which partner with companies, are increasingly run like corporations, employ highly effective and trained staff, and at times compete with companies for international contracts.

Oxfam, Save the Children, even a World Vision tend toward that pole of the NGO world.

On the other hand, some membership organizations remain committed to their activist roots. Some advocate, while others have the clear objective of disrupting gvt and/or corporate action.

Firmly embedded in their 1960s roots, these NGOs are often opposed to the liberal economic system and seek to promote an alternative economic model.

A few more points

Some NGOs have a foot in both worlds. They partner with business, all the while resorting to activist methods (boycott, demonstrations, etc) when it suits their strategy.

The tsunami of Dec. 2004 and the Iraq and Afghanistan wars have accelerated the professionalization of some NGOs.

It is fair to say that NGOs “benefit” from emergency scenarios. They grow their budgets, their staff, their projects, their offices, and as a consequence their clout.

The big names in human rights—Human Rights Watch, Amnesty, even Global Witness—have shed their radicalism and have become very adept at/willing to partner with business. (Soros gift of $100 million to Human Rights Watch in Sept 2010)

This is even truer since the creation of the UN Business and Human Rights initiative in 2005.

Contrary to corporations, CSOs are not unified by a single objective

While all for-profit organizations around the world, no matter their size, are united by the profit motive—businesses are organizations that derive a profit from the sale of goods or services—all NGOs are not united by a common objective.

Some seek collaboration with business and governments; some respond to bids for development projects and compete with business; yet others seek disruption in the form of activism—of a more or less violent, visible kind.

Despite their heterogeneity, however, CSOs are increasingly powerful. Some gain power by learning from business, some by sticking to the experience of 60s activism. But either way, they will be part of the landscape of business in the 21st century. See the BP oil spill.

Environmental NGOs run the gamut of …

Grass-roots organizations: Greenpeace, WWF, that seek to keep the world on its environmental “toes”. Methods include direct action and lobbying. WWF, however, is more collaborative than Greenpeace.

Think tanks that produce research and engineer solutions: World Resources Institute, Sierra Club.

NGOs that partner with business: International Union for Conservation of Nature (IUCN), The Nature Conservancy (Plant a Billion Trees campaign)

Some new birds with a high technological/management input: the environmental incubator, New Ventures (www.new-ventures.org) associated with the WRI, and Skytruth (www.skytruth.org), an environmental advocacy group that gained publicity during the BP oil spill because it uses satellite imagery to report on the state of the environment.