Wednesday, March 21, 2012

Public Private Partnerships: How Corporations are Influencing the UN

In mid February 2012, 600 CEOs and senior business leaders came together at a meeting to prepare for the upcoming UN Environment Conference in Rio. KPMG, one of the four biggest accounting firms in the world, organized the meeting. Comfortably housed in New York’s five star Sheraton Hotel, the executives grandiosely claimed to solve “the fundamental challenges of our time.” The Summit, co-organized by the UN Global Compact, the United Nations Environment Programme and the World Business Council on Sustainable Development, proposed to “ramp up collaboration” between the private and the public sector. It was also to serve as a preparation for the “Corporate Sustainability Forum,” which will take place only days before the United Nations Conference on Sustainable Development. In his opening speech, Secretary General Ban Ki-Moon encouraged the private sector’s involvement in the Conference, calling for businesses to “show leadership,” and expressing his enthusiastic support for Public Private Partnerships (PPPs). “Today we are together (…) looking for ways to serve the common good,” he stated .

PPPs have been booming since the ‘90s. Under constant pressure from the UNs most powerful member states, and in a precarious financial situation, the UN increasingly invited corporations from the private sector. At the same time, changes in the business environment encouraged Transnational Corporations (TNCs) to find ways to boost their company and brand reputation, with a particular emphasis on their social and environmental performance. The ‘90s saw high-profile world citizen campaigns, which highlighted the activities of TNCs and demanded socially and environmentally just behavior. Fearing consumer boycotts, corporations sought to project an image of social and environmental responsibility to the world. “A good public image is a key political resource and […] legitimacy and credibility is ‘capital’ in modern societies”. PPPs enable corporations to project such an image of public service while at the same time negatively influencing the polices of governments and other public institutions like the UN.

As former UNICEF Director Carol Bellamy pointed out, however, “it is dangerous to assume that the goals of the private sector are somehow synonymous with those of the United Nations, because they most emphatically are not.” While the UN’s raison d’être is to promote development and human rights, corporations’ efforts to “uphold ethical standards” are a means to improve their brand reputation so as to maximize profit. The implications of this difference are vast. Companies can pursue pro-environment and human right rhetoric, while engaging in deeply destructive practices.

KPMG International, the main organizer of last month’s Summit, clearly illustrates the extent to which corporations are able to deflect criticism and boost their image while not fundamentally changing their way of doing business. KPMG joined the Global Compact when former Secretary General Kofi Annan first established it in 2000. Its commitment to the Compacts’ ten principles, however, did not keep the company from setting up fake tax shelters for its wealthiest clients. In 2003, an investigation by US attorneys found that, by actively creating tax heavens, KPGM had deprived citizens from $2.5 billion in tax dollars . Clearly, signing the Compact’s 10th principle to “work against corruption in all its forms" did not prevent KPMG from being accused of accounting fraud and of obstruction of justice for hampering investigation. Adding to the irony, KPMG became part of the 10th principle’s working group, which “is to provide strategic input on anti-corruption and to define the needs of the business community in implementing the 10th principle.”

As the divide between KPMGs rhetoric and practices suggests, the UN urgently needs to move beyond the immensely naïve or intentionally deceitful position that PPPs are “win-win” relationships in which both, the UN and TNCs, work towards the fulfillment of the UN’s founding ethical principles. While for the former the rightful implementation of socio-environmental principles is an end in itself, for the latter it is a means at best.

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