*{Business has much to contribute to civil society [http://www.iccwbo.org/home/business_society/corporate_governance.asp] By Maria Livanos Cattaui Published in corporate Governance: the Way Ahead for the OECD ministerial meeting, Paris 26-27 May 1999} Few pronouncements by a Secretary General of the United Nations have aroused greater interest in business circles than Kofi Annan's call at the beginning of this year for a "global compact of shared values" between business and the United Nations. The proposed alliance is in the areas of human rights, labour standards and environmental practice, all of which are covered by UN declarations on core values. All three are relevant to business. They are the Universal Declaration of Human Rights, the International Labor Office's Declaration on Fundamental Principles and Rights at Work, and the Rio Declaration on Sustainable Development. Senior corporate executives noted with satisfaction that Kofi Annan made no vague call to companies to take on unlimited responsibilities to solve the world's problems, but that the appeal was realistically focused on the private sector's own sphere of influence. The appeal has become a basis for continued dialogue between the UN and the International Chamber of Commerce (ICC) as the world's most widely representative business organization. Throughout his address, the UN Secretary General made clear that he was asking companies to promote these values in their own corporate sphere. He said: "You can uphold human rights and decent labour and environmental standards directly, by your own conduct of your own business." There is an added dimension, of course. Business creates wealth. Jobs and living standards depend on companies' success in the market place. Robust economic growth and expanding trade and investment will create the conditions in which the UN's ideals can best be fulfilled. Poverty is the enemy of human rights, of decent labour standards, and of progress in environmental protection. That is why business places a fourth value alongside the three cited by Mr Annan - the economic responsibility of any company to its customers, to its employees and to its shareholders. That fourth value is indispensable, for unless a company can make a profit it cannot remain in business, and therefore cannot contribute to the other three. The positive reaction that Mr Annan's appeal has evoked among business leaders is a sign of the times. That a UN Secretary General would have taken such an initiative would have been unthinkable as recently as the 1980s. The UN was then engaged in seemingly endless deliberations on how multinationals should avoid infringing sovereign rights of the host nation when investing directly in the developing world. The hostility of those not-so-distant days has faded within the UN itself, if not among certain anti-business groups who seem to think that any commerce or investment across borders is by definition pernicious. To listen to them, one might think that the planet would be a better place if it were untroubled by the presence of human inhabitants, let alone companies. Today's reality is that almost everywhere, governments welcome the presence of international companies. Indeed they vie with one another to attract foreign direct investment, aware that it is a conduit for resources, technology and knowhow, and that it improves the quality of life of their citizens and is a force for social stability. In contrast with past suspicions, governments in many developing countries are today only too glad to secure advice on how to create a hospitable regime for foreign direct investment. Incidentally, ICC is currently engaged, together with the UN Conference on Trade and Development, in providing business guidance on how to attract investment to half a dozen developing countries in Africa and Asia. The change in sentiment towards business is no reason for triumphalism, but rather calls for a careful assessment of exactly where companies' responsibilities lie in today's global economy. We should be looking at what cooperation between the UN and business can achieve in practical terms, and how the two can work together most effectively. Business should not, for example, be called upon to meet demands and expectations that are properly the preserve of governments. Business has no ambition to put "the United Nations under siege" as one of the many anti-business tracts appearing on the Internet expresses it. However, we do believe, in the words of a joint statement on common interests issued by ICC and Mr Annan last year, that there are great opportunities for cooperation between the UN and the private sector. The United Nations' goals of promoting peace and development, and the business goals of creating wealth and prosperity are indeed mutually supportive. It is not only desirable that we cooperate, it is imperative. The world is changing through a combination of factors that business enterprise has for the most part generated. They include exponential advances in scientific research, computer and telecommunications technology, the advent of the knowledge economy and the globalization of markets. National boundaries have become porous. Nations are exposed to external influences to a greater extent than ever before in history - to opinions and knowledge conveyed via satellite or the Internet, to the shifts of international financial markets, to the onrush of new technologies. There are three main consequences of these changes: The private sector, the primary generator of wealth and jobs, is increasingly called upon to solve problems outside its traditional province. While it welcomes the greater freedom it has won with the liberalization of markets and economies, business also recognises that increased freedom brings increased responsibilities. Intergovernmental organizations will assume greater importance because of the pressing need for a system of global rules to make the world economy function to maximum efficiency. The more the world economy is integrated, the greater the need for adequate global governance. As ICC's Geneva Business Declaration of September 1998 stated: "Intergovernmental organizations will need additional authority, but with the proviso that they must pay closer attention to the contribution of business and competition to wealth creation." The non-governmental organizations, or NGOs, have gained immeasurably in influence and access to the inter-governmental negotiating process in the past 10 years. Together they claim to speak for what has come to be called civil society, which really means humanity at large. They have realised that it is in the international arena that they can most readily make their influence felt and produce results for the causes that they proclaim. The Earth Summit in Rio de Janeiro in 1992 was a watershed in that non-government organizations in extraordinary numbers and diversity became an intrinsic part of the conference. The result was a 'super happening' that exerted considerable influence on the negotiations themselves. Since Rio, the NGOs have been an increasingly assertive presence at successive international conferences - at the climate change conferences in Kyoto and Buenos Aires, at the Social Summit in Copenhagen, or the Food Summit in Rome and many others. In the United States, the Clinton Administration has taken the lead internationally in calling for greater openness in trade negotiations and for a prominent role for all members of civil society in trade matters generally. The now retired Director General of the WTO, Renato Ruggiero, took a similar line and the European Union echoed the call for a 'genuine dialogue' with members of civil society. For good or ill, the WTO can no longer count on conducting its business in the tranquil atmosphere that trade diplomats were used to in the heyday of its predecessor, the General Agreement on Tariffs and Trade. It is idle for business either to deplore or welcome these developments. It has to live with them. At least it can make its own position as a stakeholder in civil society clear. The Geneva Business Declaration, which was issued after a two-day conference involving business leaders and the heads of international organizations, described ICC's objective as "rules-based freedom for business". To quote the Declaration again: "Freedom can only work within rules, and the same holds good for markets. Business needs the backing of effective laws, rules and institutions for its own operations and to ensure overall civil stability. Governments and intergovernmental organizations are the main rule-setters." The Chairman of Royal Dutch/Shell, Mark Moody-Stuart, took these ideas further in a recent speech in which he pointed out that the framework of national and international law is essential for business. He then went on to speak of the legitimate role of business in the social arena. "Of course the commercial creation of wealth is a factor in improving the human condition. But markets - or companies - alone will not alleviate poverty or deliver full social justice. "This, surely, is the concerted responsibility of all society's stakeholders - governments, business, NGOs, multilateral agencies, labour organizations and religious bodies to name only the major players," the Shell Chairman said. Kofi Annan's appeal emphasises the social responsibility in the corporate sphere that business is invited to bring to the table as part of his global compact with business. His initiative, and the business response to it, could well be a catalyst that will help to convince NGOs that private enterprise is a bona fide part of civil society. They should understand that business is determined to play its part in shaping a better world for the 21st century on the basis of the core values cited by the UN Secretary General. Governments, business and all other members of civil society have a shared responsibility in making sure that globalization is a blessing for mankind. *{Business in Society}