Tuesday, November 28, 2006

The U.N. Global Compact: Why are Indian Companies Faltering?

First off, my apologies to the smattering of regular readers for such a gap between posts. In the academic calendar there are times of the year that are busier than others, and the last month has been one of those times. But the semester is near an end, and after I complete the manuscript I've been working on for a Dec. 1 deadline, I should have time to begin posting more regularly. Believe me, the ideas are stacking up.

For now, here's a quick post about the United Nation's Global Compact. The Global Compact was introduced in 1999 by (soon-to-be-former) Secretary General Kofi Anan with the aim of bringing together companies, UN agencies, labor, and civil society to commit to upholding ten universal principles in the areas of human rights, labor, environment, and transparency and anti-corruption.

The links above will take you to detailed explanations for each of the ten principles, to which companies may voluntary agree. So that you don't have to follow the links, here are the principles:
  1. Businesses should support and respect the protection of internationally proclaimed human rights; and
  2. make sure that they are not complicit in human rights abuses.
  3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
  4. the elimination of all forms of forced and compulsory labour;
  5. the effective abolition of child labour; and
  6. the elimination of discrimination in respect of employment and occupation.
  7. Businesses should support a precautionary approach to environmental challenges;
  8. undertake initiatives to promote greater environmental responsibility; and
  9. encourage the development and diffusion of environmentally friendly technologies .
  10. Businesses should work against all forms of corruption, including extortion and bribery.
On the corporate side, participation in the Global Compact involves a voluntary commitment to the ten principles. Companies are required to submit an annual "Communication on Progress" that details the steps they are taking to implement the principles. What does a company get for participating? It gets to participate in Global Compact events such as "Learning Forums" where companies share best practices for upholding the principles. A participating company also gets to use the Global Compact name and logo in promotional materials.

There's a lot of debate about whether the Global Compact really makes any difference in a company's conduct. My guess is that the difference, if any, is minimal. But when the Worldwatch Institute recently reported that the UN de-listed 335 companies from the Global Compact (the UN press release on the de-listing is available here), it occurred to me that the transparency of the Global Compact listing process gives average citizens ways to hold companies accountable. According to the UN, de-listing is a strategy to maintain the integrity of the Global Compact:
This step conforms to the Global Compact's Integrity Measures ... The Integrity Measures state that any company that has missed two consecutive annual deadlines to submit a Communication on Progress (COP) will be regarded "inactive" and marked accordingly on the Global Compact website.
Since the de-listed companies can be viewed at the Global Compact website, I compiled a list of the Indian companies that were de-listed:
  1. Bharat Aluminium Company Ltd.
  2. Bongaigaon Refinery and Petrochemicals Ltd.
  3. Cement Corporation of India
  4. Air India
  5. Dena Bank
  6. Central Cottage Industries
  7. Excel Industries Limited
  8. Hi-Tech Carbon
  9. Hindustan Organic Chemicals ltd.
  10. Engineering Projects India Ltd.
  11. Hindustan Aeronautics Ltd.
  12. Apollo Hospitals
  13. Mishra Dhatu Nigam Ltd.
  14. Mineral Exploration Corporation
  15. Mazagon Dock Ltd
  16. Mahanagar Telephone Nigam Ltd.
  17. Kudremukh Iron Ore Company
  18. Kolam Information Services PVT. Ltd
  19. Infrastructure Development Finance Company Ltd.
  20. Hindustan Sanitaryware and Industries Ltd.
  21. Hindustan Petroleum Corp. Ltd.
  22. Semiconductor Complex Ltd.
  23. Scooters India LTD
  24. Quadra Advisory Private Ltd.
  25. Punjab National Bank
  26. PSi
  27. Priconser India Pvt. Ltd.
  28. North Eastern Electric Power Corporation Ltd.
  29. National Textile Corporation Ltd.
  30. MMTC
  31. Wadia Group
  32. Unit Trust of India
  33. Transnational Supply & Service
  34. The State Trading Corporation of India
  35. The Shipping Corporation of India Ltd.
  36. Telco Construction Equipment Company Ltd.
  37. Tata Tea
  38. Tata Industries Limited
  39. TAL Manufacturing Solutions Limited
Some of these companies may have failed to submit a COP because they are no longer committed to upholding the principles of the Global Compact. In other cases, they may not have the resources to devote to developing a COP. Given the number of companies from developing countries among the 335 that were de-listed, I suspect there is a common obstacle preventing companies from maintaining their commitment.

Regardless of the reason, I figured readers of The Curious Stall might be familiar with one of the companies in the list, or even have a contact, and be able to find out why some of these companies have failed to submit their COPs. Perhaps through the blogosphere we can do a little collaborative research and put a little pressure on these companies to stay committed.

If you know anything about any of the companies listed above, even just general information about what kind of business the company is engaged in, feel free to post it here. Many Indian companies have no web presence, so it is difficult for me to find anything out from where I blog. Who knows, perhaps we can collect some information that might be useful to the UN's Global Compact office in providing better support to companies in developing countries that want to stay committed to the ten principles.

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1 comment:

Mannu said...

hi there. went through your blog and found it extremly enriching. the Global Compact was an all-new information to me. however, i found myself to an employee of one of the delisted companies, the Shipping Corporation of India. presently i am sailing as 2nd/3rd Mate with them and have been with them for over 8yrs,since the start of my seafaring career.
i guess probable cause for SCI could be non-reporting. but from my personal observation i can feel abolition of forced labour, greater environmental responsibilty, to be one of the few factors that can cause them to stay indifferent.
Indians Govt/semi-govt officials generally seem to work on two principles only: CYA(cover your arse) and Boss is always right. there may be more such, but i have so far tasted them in higher amount.