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Making Business Participation More Transparent and Accountable

Avoiding “corporate capture”—the undue influence of business actors, and in particular large multinational corporations, on the post-2015 agenda— will require governance reforms and norm setting to make business participation as transparent and accountable as possible. It will also entail careful monitoring and evaluation of partnership activities and greater transparency of associated funding. UN member states need to adopt much more stringent criteria and rules for those who participate in multi-stakeholder initiatives, and for how these actors will be held accountable.

At present, international business associations can participate in UN processes as “nongovernmental organizations (NGOs)” on the grounds that they are nonprofit, even though they represent the interests of for-profit corporations. There needs to be a clearer distinction between public-interest NGOs and business-interest NGOs.

Some governments have supported the UN's outreach to the corporate sector even while seeking to keep civil society groups at bay on the grounds that the intergovernmental nature of the organization should be preserved. It is time for member states to speak out on the role they envision for the business sector in the post-2015 agenda and in the UN system at large. The recent initiative spearheaded by Ecuador (and supported by several member states as well as more than 100 civil-society organizations) in the Human Rights Council to advance a binding instrument to regulate multinational corporations may be signaling that the debate is shifting toward a much stronger recognition of business responsibilities.

The UN should adopt a standardized, systemwide set of guidelines for its interaction with the private sector and all other stakeholders. This could take the form of a General Assembly resolution, comparable to the UN Economic and Social Council's resolution on the regulation of the consultative relationship with NGOs. This resolution should define partner selection and exclusion criteria. It should prevent actors who violate internationally agreed-upon environmental, social, and human rights conventions or otherwise violate UN principles (for example, through corruption, breaking of UN sanctions, proven lobbying against international agreements, evading taxes, etc.) from entering into collaborative relationships with the UN.

The UN should also adopt a systemwide confl t-of-interest policy. Corporate partners should disclose to the UN any situation that may appear as a confl t of interest. They should also disclose if a UN offi or a professional under contract with the UN has any kind of economic ties with a corporate partner. Specifi requirements in the code of ethics for UN employees could help address the potential confl ts of interest raised by the circulation of staff between UN entities and national governments, private foundations, corporations, lobby groups, and civil society organizations. A “cooling off” period, during which former UN offi cannot start working for lobby groups or lobbying advisory fi ms, could be considered.

Before the UN enters into new multi-stakeholder initiatives or partnerships with business actors, the possible impacts of these activities must be assessed systematically. This should include evaluating the added value of the initiative for the realization of the UN's goals; the relation between the risks, costs, and side effects and the potential benefits; human rights impacts; and the possible alternatives to the planned activities. Impact assessments and evaluations should be carried out by neutral bodies and the results of the investigations be publicly accessible.

A UN regulatory framework for partnerships, in particular with the business sector, will require capacity in the secretariats and at the intergovernmental level. Staff is needed for the additional duties of screening companies, legal advice, and monitoring and evaluation of partnerships. This task could be fulfilled, for instance, by the existing Joint Inspection Unit of the UN, if its financial resources and mandate were extended accordingly. For the monitoring and oversight of partnerships in the post2015 development context, the High-Level Political Forum (HLPF) could become the hub.

The UN seeks extra-budgetary funding in a context where some member states have failed to pay their full dues and, in several instances, have cut their voluntary contributions. Since the 1980s, donor contributions, while generally increasing in amount, have shifted away from “core funding” toward voluntary earmarked funds, thus eroding the multilateral character of the organization. An increasing amount of funding also comes from nongovernmental sources, such as NGOs, philanthropic foundations, and the corporate sector. In 2012, $13.7 billion of a total $41.5 billion in UN systemwide funding, or just 33 percent, came through assessed (mandatory) contributions from member states. Half of all funding was in the form of voluntary contributions provided for specific purposes, and another 13 percent was voluntary funds for nonspecified use. (See Figure 15–1.)

Member states have a key role to play in reversing this trend by providing adequate core funding to UN programs, and civil society groups need to advocate for adequate and reliable financial resources. At a minimum, the UN should disclose the funding it receives from the private sector more transparently. According to UN data, extrabudgetary resources from “Major Other Organizations, NGOs, Foundations, Private Sector” increased from $883 million in 2002–03 to $2.3 billion in 2008–09. But there is currently no systematic reporting of the funds that the UN receives in the form of extra-budgetary resources, and there is no disaggregated reporting to track the evolution of private sector funding.

Better reporting is also needed for funds committed to multi-stakeholder initiatives, such as Every Woman, Every Child or Sustainable Energy for All. While these initiatives claim billions of dollars in pledges and investments, it is usually difficult to assess where the money has gone, whether it has been really new and additional to existing commitments, and what impact it has had. If these initiatives are going to be part of the post-2015 agenda, they require much more stringent reporting.

Civil society groups have an important role to play in this context. It will likely fall to them to highlight the context within which corporate influence on UN processes becomes problematic. They will need to operate from an understanding of the broader problems of increasing fragmentation of global governance, the weakening of representative democracy on the national level, the unpredictable and insufficient financing of public goods, and the lack of adequate monitoring and accountability mechanisms.

Figure 15–1. United Nations Funding Sources, 2012

Civil society organizations engaged in partnerships with the business sector in particular need to carefully evaluate the impacts and side effects of these initiatives and to potentially reconsider their involvement. In a context where reporting requirements and accountability standards for publicprivate partnerships are low, it is difficult to assess their success or failure. Are they achieving their stated goals and do they contribute to sustainable development? Do they empower local communities and meet their needs? Civil society groups advocating for effective corporate accountability rules at the UN need to be able to answer these questions.

 
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