The UN Global Compact’s ten principles in the areas of Human Rights, Labour, the Environment and Anti-corruption enjoy universal consensus and are derived from:
· The Universal Declaration of Human Rights
· The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work
· The Rio Declaration on Environment and Development
· The United Nations Convention Against Corruption
· 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.
The Origin of the Human Rights Principles
Human rights are universal and belong to everyone equally. The origin of Principles One and Two is in the 1948 Universal Declaration of Human Rights (UDHR). The aim of this Declaration was to set basic minimum international standards for the protection of the rights and freedoms of the individual. The fundamental nature of these provisions means that they are now widely regarded as forming a foundation of international law. In particular, the principles of the UDHR are considered to be international customary law and do not require signature or ratification by the state to be recognised as a legal standard.
The UDHR is a keystone document, it has been translated into over 3000 languages and dialects. While some principles may not be directly applicable to business, consistency with the declaration is important.
· 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.
The Origin of the Labour Standard Principles
The four labour principles of the Global Compact are taken from the ILO’s Declaration on Fundamental Principles and Rights at Work. This Declaration was adopted in 1998 by the International Labour Conference, a yearly tripartite meeting that brings together governments, employers and workers from 177 countries. The Declaration calls upon all ILO Member States to apply the principles in line with the original intent of the core Conventions on which it is based. Consensus now exists that all countries, regardless of level of economic development, cultural values, or ratifications of the relevant ILO Conventions, have an obligation to respect, promote, and realize these fundamental principles and rights. At the G8 Meeting in Evian, France, in 2003, the leaders of the industrialized world encouraged companies to work with other parties to implement the Declaration
· 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.
The Origin of the Environment Principles
Internationally co-ordinated work on the environment has been led by the United Nations Environment Programme (UNEP), since its inception in 1973. UNEP has provided leadership and encouraged partnerships to care for the environment, for example, through Multilateral Environmental Agreements (MEAs) which have addressed issues such as species loss and the need for conservation at a global and regional level. UNEP has created much of the international environmental law in use today.
The three environmental principles of the Global Compact are drawn from a Declaration of Principles and an International Action Plan (Agenda 21) that emerged from the United Nations Conference on Environment and Development (the Earth Summit) held in Rio de Janerio in 1992. Chapter 30 of Agenda 21, identified that the policies and operations of business and industry can play a major role in reducing impacts on resource use and the environment. In particular, business can contribute through the promotion of cleaner production and responsible entrepreneurship.
· Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
The origin of the Anti-corruption principles
Corruption is now recognized to be one of the world’s greatest challenges. It is a major hindrance to sustainable development, with a disproportionate impact on poor communities and is corrosive on the very fabric of society. The impact on the private sector is also considerable – it impedes economic growth, distorts competition and represents serious legal and reputational risks. Corruption is also very costly for business, with the extra financial burden estimated to add 10% or more to the costs of doing business in many parts of the world. The World Bank has stated that “bribery has become a $1 trillion industry.”
The rapid development of rules of corporate governance around the world is also prompting companies to focus on anti-corruption measures as part of their mechanisms to protect their reputations and the interests of their shareholders. Their internal controls are increasingly being extended to a range of ethics and integrity issues and a growing number of investment managers are looking to these controls as evidence that the companies undertake good business practice and are well managed.
The international legal fight against corruption has gained momentum in more recent times through the Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and through the entering into force of the first globally agreed instrument, the United Nations Convention against Corruption (UNCAC) in December 2005.
There are a number of very different reasons for why businesses should combat corruption in all its forms.