No. 8 - September 2007

Greetings!

Welcome to the September 2007 issue of the Global Public Policy Institute (GPPi) newsletter.

Our newsletter appears three times a year to keep you informed about the institute, to post our newest publications, and to share interesting recent news on global public policy-making. In this issue, we focus on corporate social responsibility and accountability of the World Bank.

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Research

Learning to Build Peace?
The United Nations, Peacebuilding and Organizational Learning

Socializing the Dragon?
Europe’s China Policy and Global Security Governance

The New Protectorates
International Administration and the Dilemmas of Governance

The Emergence of a European Strategic Culture
The Construction and the Functioning of the European Security and Defence Policy

Crisis and Change
The UN Secretariat and the Quest for Accountability

Consulting

Development of a Monitoring and Evaluation Framework for the Gender Standby Capacity Project (GenCap)

External Review of CGIAR Challenge Programs

Networking United Nations Private Sector Focal Points

Debate

Transatlantic Energy Security Dialogues

Global Atlanticists

"Towards Global Partnerships": Development of the Secretary-General’s Report

Corporate Engagement in Disaster Preparedness and Humanitarian Response

Principles for a "Best Practice" Strategy in the Use of Public-Private Partnerships in German Development Assistance

Hertie School Executive Education Seminar 2007

Topic 1

1. In Search of the Good Company
from: Economist, 6 September 2007

Summary: This article discusses the publication of a recent book by Robert Reich entitled "Supercapitalism", a scathing critique of Corporate Social Responsibility (CSR). Reich, an economist who served as labour secretary under Bill Clinton and now teaches at the University of California, Berkeley, believes that companies "cannot be socially responsible, at least not to any significant extent”, and that CSR activists are being diverted from the more realistic and important task of getting governments to solve social problems, according to the article. Reich also emphasizes that CSR "fools the public into believing that problems are being addressed, thereby preventing more meaningful political reform," the article points out.

However, the article also presents some critiques of Reich's work, including one by John Ruggie of Harvard University who stated that Reich has it “exactly backwards...if citizens and politicians were prepared to do the right thing, there would be less need to rely on CSR in the first place.”

2. Standards and Practices – Guiding Principles for Business and Human Rights
by: John Ruggie, Harvard University and the UN Secretary-General’s Special Representative for Business & Human Rights, 6 September 2007

Summary: Since 2005 John Ruggie has been working on business and human rights for the United Nations and in March 2007 he submitted the initial results of his work to the United Nations Human Rights Council. Here, in a new regular essay section, he outlines his conclusions to date and areas of focus for the next year, including four guiding principles for the mandate’s recommendatory phase.

First, Ruggies stresses, any “grand strategy”, if it is to succeed, needs to strengthen and build out from the existing capacity of states and the states system to regulate and adjudicate harmful actions by corporations – not undermine it. Ruggie adds that yes, companies should have human rights duties, but conflating them with the obligations of governments undermines the social roles of both. Second, the focal point in the business and human rights debate needs to be expanded beyond individual corporate liability. Third, many elements of an overall strategy lie beyond the legal sphere altogether and lastly, it follows that the distinction between voluntary and mandatory measures, of which some of the protagonists in this debate are so fond, itself has grown stale and unhelpful.

3. UN Global Compact Outlines Key Outcomes of 2007 Leaders Summit
from: The UN Global Compact Office, 22 August 2007

Summary: This report is the initial assessment of the major outcomes of the UN Global Compact Leaders Summit, which took place on 5-6 July in Geneva, Switzerland. Chaired by Secretary-General Ban Ki-moon, the Leaders Summit was the largest high-level event ever held on the topic of corporate responsibility, bringing together more than 1,100 leaders and representatives from business, government, civil society, labour, academia and the United Nations.

According to the report, the main outcomes of the Summit include: The 21-point “Geneva Declaration”, which carries forward the philosophy that through responsible business practices a more sustainable and inclusive global economy can be realized; the Ministerial Roundtable which included ministers and other high-level Government officials on the role of Governments in promoting corporate citizenship; the launch of numerous action initiatives, stock-taking reports and learning resources, including the "Caring for Climate" platform, the "Principles for Responsible Management Education" and the "CEO Water Mandate", among others.

Lastly, the report emphasizes the role of the summit in renewing multi-stakeholder commitment, deepening of business engagement, growing financial market incentives, increased governmental support and strengthening of the broader UN-business agenda.  

Topic 2

1. Independent Panel Review of the World Bank Group
by: Paul Volcker, et al., 13 September 2007

Summary: An Independent Panel appointed early this year to review the work of the World Bank’s Department of Institutional Integrity (INT) issued a 40-page report of findings and recommendations on 13 September 2007.

Based on extensive interviews and analysis, the Report evaluates the work of INT, the unit of the Bank that investigates allegations of fraud and corruption in the Bank’s lending operations. The Report also places that work in the broader context of the strategy of the Bank adopted earlier this year to help borrowing countries develop effective governance and anticorruption programs. In concluding its Report, the Panel stressed the key role that INT must play in the Bank’s anticorruption effort and put forth a number of recommendations to improve INT's effectiveness and relations with the rest of the bank, including the creation of an external advisory board; enhancing prevention of fraud and corruption; broader disclosure; and better evaluation of effectiveness.

2. World Bank President Robert B. Zoellick Welcomes Volcker Panel Review of the World Bank’s Institutional Integrity Department
from: World Bank, 13 September 2007

Summary: World Bank Group President, Robert B. Zoellick, has expressed his appreciation for the report of the panel led by Paul Volcker, which reviewed the work of the Institutional Integrity Department (INT) in the context of the World Bank Group’s governance and anticorruption strategy. “This is an excellent and most useful report,” Zoellick said. “The Volcker report makes clear the serious challenges ahead in overcoming the cancer of corruption in operations supported by the Bank, and it offers constructive recommendations. Now it will be up to all of us to move forward, as part of our on-going commitment to address this vital issue.”

The Bank will seek external comment on the initial proposals by posting them on the Bank’s website, along with the Volcker panel’s report and recommendations.

3. Panel Urges World Bank to Change Antigraft Plan
from: New York Times, 12 September 2007

Summary: This article, published in response to the release of the independent panel's report, interviews the head of the panel, Mr. Paul Volcker, who stated "This is not an easy problem...By far the most important thing is getting the entire bank on board with the importance of an anticorruption effort. This goes against decades of grain in the other direction. There’s been outright conflict in the bank as to whether to have an anticorruption function."

The article also emphasizes that the report focused significantly on the activities of the institutional integrity unit led by Suzanne Rich Folsom, a Wolfowitz appointee and onetime Republican Party activist, as many bank employees charged that under Ms. Folsom, the anticorruption campaign was waged selectively and unfairly against employees and countries and that it was intended to carry out the agenda of a conservative Republican distrustful of the bank’s mission. The report, while exonerating the anticorruption team of unfairness or political motivations, said a “siege mentality” in the institutional integrity unit led to “excessive secrecy” about its activities and a refusal to share its findings with colleagues and people in the affected countries.