WEF: Snail's pace on social
By Alan Boyd
"Do they listen? Will they learn?" Such was the ringing
challenge laid down by the environmental group, Friends
of the Earth, when it joined 20,000 anti-globalization
protesters in a tempestuous ambush of the World Economic
Forum two years ago.
Inside, the same message was
being delivered by United Nations Secretary General Kofi
Annan, who warned that big business ignored the social
implications of inequalities in wealth at its peril.
"Think of ways that your company can help mobilize
global science and technology to tackle the interlocking
crises of hunger, disease, environmental degradation and
conflict that are holding back the developing world," he
As the forum's members gather again
next week in Davos, Switzerland, there will be much
soul-searching over whether the movement is living up to
its lofty ideal of "improving the state of the world"
or, alternatively - as social activists charge - is
nothing more than an elitist corporate club.
Since the 2002 confrontation, the guardians of
free enterprise have opened a direct dialogue with their
critics and promoted core principles that strive to make
business more responsive at a social level. Responding
to Annan's plea, a handful of multinationals have
pledged to set aside a portion of annual earnings to
help bridge the technological gap that is contributing
to the income gap and breeding poverty.
executives have forged environmental alliances with the
green movement or are sitting down with human-rights
groups to hammer out covenants on child labor and low
wage levels in the Third World. Their guiding light is a
Global Governance Initiative (GGI) established in late
2002 that has seven groups of experts analyzing how
business can relate to the Millennium Summit issues of
peace and security, poverty, hunger, education, health,
environment and human rights.
initiatives have been launched for each segment,
galvanizing unprecedented levels of debate among the
captains of industry, non-government pressure groups and
their political masters. But are the boardrooms really
Probably not, according to the first
annual review of GGI, released as part of Davos 2004,
which suggests that most corporations - as well as
governments, international organizations and civil
society - have failed to support the goals of the 2000
Convened by the UN, the summit of 189
countries set a deadline of 2015 for achieving
substantial progress in those problems that were
considered most likely to undermine global stability.
The declaration was subsequently adopted by the forum as
part of its strategic vision.
consultants found that two-thirds of forum participants
were not doing enough to advance the goals; in fact,
none of the seven segments merited a score of more than
4 out of 10. Peace and security, hunger, education,
environment and human rights all rated a score of 3,
representing minimal change from the previous year.
Poverty and health were given 4 points.
other words, for all of its most important goals, the
world is failing utterly to put forward the needed
effort," the reviewers noted.
What makes the
results all the more surprising is that they point to a
surprisingly low response by European and North American
groups, which are more conscious of the importance of
corporate governance than their Third World counterparts
and dominate the forum's membership.
home of the Geneva-based forum, accounts for 430 of the
1,007 members and the United States is sending 228. In
contrast, the entire continent of Asia has only 131
members, and most of these are from Japan, India or
China and South Korea are deeply
under-represented, with a mere seven delegates from each
country; Malaysia is sending four delegates this year,
Singapore two, while Thailand will have a sole
representative at the most influential global economic
Not surprisingly, some independent
studies have suggested that regional differences are an
important factor, with businesses and governments in
advanced countries twice as likely to devote time to
social issues as their Asian, South American or African
Amnesty International, which has a
business dialogue with the forum, reported that Western
members were themselves split on the issue: while there
had been an encouraging improvement in the attitude of
European oil firms toward human rights, North American
corporate leaders were slower to respond.
within individual business sectors, larger corporations
are far more likely to adopt a more responsible position
on key issues, probably because they are more visible
and have bigger resources.
One reason advanced
by the review team for the lack of progress was the
absence of any real partnership, with political leaders
often "scarcely trying", while businesses and
civil-society groups were "neither able nor willing to
compensate for the inadequacies of government efforts".
Forum president Klaus Schwab admitted after the
2002 showdown over globalization that business had "lost
its credibility as a trustworthy partner" after the
collapse of Enron and a host of other corporate scandals
that were linked to fraud and greed.
of large corporations have also conceded during forum
sessions that they have difficulty balancing the need
for social responsibility with their paramount duty
toward shareholders. AOL Time Warner chief executive
Richard D Parsons told one plenary discussion that while
corporate leaders had to think beyond their pursuit of
profits, this should not "override a corporation's
fundamental obligation to make a reasonable return for
The ereviewers for the Global
Governance Initiative cautioned that their findings were
subjective because of the short evaluation period of 12
months, and that a longer time frame might produce a
Yet there have been separate
indications that corporate leaders - and their erstwhile
allies - are not doing enough.
A survey of the
environmental standards of business found that
reductions in greenhouse emissions by individual firms
such as British Petroleum and Du Pont had been nullified
by the rampant destruction of tropical forests in Asia
and South America.
Poverty was exacerbated by
corporate backing for protectionist trade policies,
especially in the agricultural sector, the withholding
of technology transfers and the overzealous enforcement
of intellectual property rights.
In December a
study on the forum's global health initiative by Harvard
University and the Joint UN Program on HIV/AIDS
(UNAIDS), based on a survey of 8,000 corporations in 103
countries, concluded that business was not playing a
significant role in the fight against AIDS. Only 47
percent felt that the disease would have some impact on
their operations, and most of these were situated in
southern Africa and Asia, which have the highest
incidence of the human immunodeficiency virus (HIV).
Although 21 percent of reporting firms said their
existing policies and programs were sufficient and
effective, a modest 6 percent actually conformed with
guidelines laid down by medical agencies.
is no doubt that in recent years the business community
has started waking up to the enormous threat posed by
the AIDS epidemic to its workforces and markets," said
Dr Peter Piot, executive director of UNAIDS. But he
added: "This survey highlights the urgent need for
businesses in other parts of the world, particularly in
Asia, to take action now."
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