Campaigning organisations remain resolutely unconvinced about the value of public-private partnerships says Jessica McCallin

Corporate partnerships between the United Nations and other Intergovernmental Organisations (IGOs) as well as partnerships between business and non-governmental organisations (NGOs) are on the increase. Two main developments over the past 10 years have helped to speed up this growth. The first has been the increasing sophistication of environmental and humanitarian pressure groups. The second was the overall drop in the budgets of IGOs and NGOs.

As pressure groups focused on individual companies and their complicity in gross human rights violations and environmental destruction – the most famous being Shell's role in Nigeria – so companies needed to find ways to improve their public image and protect themselves from reputation damage and its knock-on effect on share prices.

And although poverty and environmental destruction increased during the 1990s, due in large part to the fall of the Soviet Union and the acceleration of human-induced climate change, government contributions to the UN and other IGOs did not keep pace – the biggest offender being the US, which refused to pay the $1bn it owed to the UN. On top of this, compassion fatigue set in amongst the general Western populace, who were far from convinced that their charitable donations were having any positive impact.

The two developments combined to make partnerships between the private and public/voluntary sector inevitable. But a huge question mark remains over whether these partnerships are anything more than 'green wash' or, in the case of UN partnerships, 'bluewash' (a reference to the pale blue used in the UN logo).

An examination of the biggest example to date of these partnerships, the UN's Global Compact with Business, illustrates some of the problems. Launched in July 2000, the Compact is, in the UN's own words, a declaration of shared values. Companies commit to basic principles on environment, labour rights and human rights, but corporate participation is voluntary, there is no screening process and there is no independent monitoring or enforcement of the Compact.

What, then, is the point of it? Pressure groups point to corporate members' prolific use of the Global Compact logo on their literature, but say they can find no evidence of change among these corporations. In fact, it seems that for the corporate members, it is just business as usual.

Mining giant Rio Tinto is a member of Global Compact, but, far from trying to encourage respect and protection for the environment, it is going ahead with plans to mine under the last Eastern coastal forests of Madagascar, displacing local communities and threatening several species of animal and plant with extinction.

Campaigners are calling for the Global Compact to have regulatory, monitoring and punitive powers. Give it teeth, they say. But the UN says that, although the Compact might evolve into something with binding powers, there are no plans to change its voluntary nature. As a result, the Compact has been roundly dismissed.

Pressure group Corporate Watch says: "Many of the signatories to the Global Compact have violated the very principles of human rights that the UN stands for. These include Shell Oil, Nike and Rio Tinto. Corporate influence at the UN is already too great. Corporate lobby groups working directly and through national governments have weakened environmental agreements and influenced important regulatory documents affecting health and safety. The Compact has no provision to make the corporations accountable for their behaviour. This allows companies to declare their allegiance to UN principles without making a commitment to follow them."

It is a feeling echoed by many other groups, including Amnesty International and Human Rights Watch, which are actually participating in the Global Compact. It is also of concern to some of the UN agencies that should benefit from the Compact. Mary Robinson, the UN's High Commissioner for Human Rights has pointed out that companies wanting to be involved, must be held accountable. They must realise there is a price to be paid for participating in the Compact, she says.

Defenders of the Compact say its sheer size and scope – it is, after all, a initiative between the body representing the world's governments and the biggest companies in the world - mean it can only ever promote principles around which companies and organisations can rally. More precise, binding partnerships, they say, can be made on specific issues. But again, the problem is that more precise, binding partnerships, have equally failed to produce tangible change.

The World Health Organisation (WHO), for example, entered into a variety of public-private initiatives with pharmaceutical companies. They included the Global Alliance for Vaccines and Immunization and the Global Fund to Fight AIDS, Tuberculosis and Malaria. All well and good you may say, except that these initiatives are not altruistic. The pharmaceutical companies stand to make money by selling their drugs through the initiatives, when what is needed is for non-patented drugs to be made widely and cheaply available to poor countries. Critics also think that the partnerships are starting to influence and skew WHO policy on fighting disease, and point to WHO-commissioned papers which say that corruption and ineffective heath care, not vastly inflated drug prices, are the main reason for poor third world health. In addition, anti-poverty groups such as War on Want have discovered that, when pharmaceutical companies make what they call generous, in-kind donations to third world countries, they are often donating drugs which are nearing or past their sell-by date.

Campaigners also question the motives of corporate involvement. Is it coincidental, for example, that the Bill and Melinda Gates Foundation was created with an injection of $15.8bn in 1999 at a time when Microsoft was under attack for having broken anti-trust laws?

Criticism has also been levelled at the United Nations Development Program (UNDP), which is working on flood defences with private companies in Vietnam. While attempting to stem the damage caused by floods is important, it might be better to make companies wake up to the reality of climate change through forcing them to adopt less energy-intensive practices by means of regulatory change, carrot and stick taxation or punitive measures. These would cut the level of fossil fuel emissions and slow global warming by putting responsibility squarely back with the polluter.

Model for the future?
There are one or two mildly encouraging examples. One of the few partnerships between an IGO and a business which has not met with broad criticism is an information technology initiative between the Markle Foundation, a network of IT companies including Cisco Systems, Sun Microsystems and Hewlett-Packard, and the UNDP. Each company has agreed to assist at least three developing nations over the next two years, providing pro-bono expertise and resources to create e-strategies and solutions to advance development goals. Providing the initiative produces tangible results at the end of the two-year period, it may serve as a model for future partnerships.

It is, however, a very big 'may'. Campaigning organisations remain unconvinced about the value of public-private partnerships, and it is hard to see them changing their minds.

Nick Dearden, a campaigns officer at War on Want, explains: "There is a fundamental conflict of interest between the work of IGOs and NGOs, and private businesses. The former work to a wider conception of the public good, the latter to make money. When the going gets tough for corporations, the first thing they will cut will be their public-private partnership budgets and where will this leave the projects that depended on that money?"

Campaigners don't necessarily criticise the fact that businesses exist to make money. What they criticise is the idea that money- making enterprises cannot commit money and resources, over the long term, to projects which have no tangible returns on their balance sheet.

IGOs and NGOs definitely need more money, and corporations definitely need to be made more accountable for the impact of their actions. But it is unlikely that partnerships will produce the necessary results.

Instead of partnerships with corporations, human rights and environmental campaigners would prefer to see higher corporate taxes, especially on the worst offenders, and the proceeds channelled by governments into the appropriate IGO or NGO. Alternatively, they would like to see legislation used more effectively. They point to the success of the UK pensions legislation change in the summer of 2000 as a good example to follow. The government merely made it obligatory for pension funds to publish a position paper on social and environmental issues. Funds did not even have to commit to being socially and environmentally responsible, but the effect has been huge nevertheless. The number of pensions funds adopting socially responsibly investment models has jumped massively. And the legislation has been copied in other European countries.

Such actions give power back to elected and accountable governments, and only that, critics say, will temper what is otherwise tremendous corporate power. Partnerships with IGOs and NGOs have only added to the criticism levelled at companies. Those concerned about their public image would be better off limiting their negative social and environmental impacts. Attempting to green or blue wash them will only be met with more vigorous contempt.

Jessica McCallin is a freelance journalist

The World Resources Institute offers a number of publications aimed at improving the management of environmental issues by the private sector. These include:

  • Pure Profit: The Financial Implications of Environmental Performance
  • Coming Clean: Corporate Disclosure of Financially Significant Environmental Risks
  • The Next Bottom Line: Making Sustainable Development Tangible
  • Green Shareholder Value: Hype or Hit? (available online in PDF format)
  • Green Ledgers: Case Studies in Corporate Environmental Accounting.