The United Global Compact (UNGC) is an initiative with the aim of rising and diffuse the benefits of global economic development using voluntary corporate policies and actions CITATION Oli04 l 1033 (Williams, 2004). The UNGC initiative came into practice in the year 2000, it is both a policy and a framework for companies which are committed to sustainability and responsible business practices (United Nations Global Compact Office,2008). It invites companies to take part in responsible business practices on human rights, labor standards, environment and anti-corruption CITATION Cub17 l 1033 (Cubie L.L. Lau, 2017) It is the world’s largest initiative with 12,000+ signatories in over 160 countries from developed and developing countries (UN,2018).
Members of the initiative benefit tremendously from it the benefits of engagement which include; involvement with multilateral system of the UN, enhances corporate citizenship, network opportunities (Arevalo ; Aravind, 2010). It also improves the company reputation and provides an understand of the financial needs and promote access to capital (UN,2018).
However, most businesses in US are not members of the initiative due to fear of having their dirty laundry exposed to the public instead of taking part they start their own charities CITATION Byr09 l 1033 (Byrd, 2009) Another possibility is that companies do not have a clear understanding on how accountability is measured CITATION Byr09 l 1033 (Byrd, 2009).
Corporations have not joined due to criticizers of the initiative, as it was revealed that many companies join the association in order boost their corporate image and to be good citizens. Arevalo and Aravind (2010) went on to say that the Global Compact does not develop new Corporate Social Responsibility strategies. People are worried that the compact is more helpful to developed countries rather than aiding the countries that need them the most CITATION Byr09 l 1033 (Byrd, 2009)I think the UNGC initiative is a framework that all business should use in order to stay awake as opportunities may arise in future that would benefit the company, and vital as networks are formed, companies also become more aware of what’s trending and what’s not.
The global compact is also good for building good relationships between stakeholders, shareholders and employees, as the initiative will bring them together help them work hand in hand together and eliminate problem that may arise in their environment. For example, the Global compact provides businesses with guidelines on how to deal with human rights.
The Un Declaration of human rights (2018), states that “all humans are born free and equal in dignity and rights” they are universal and every person around the world must be treated with respect and equality. Human rights are basic rights and freedoms that “transcend national, cultural, religious or ideological boundaries” (Quelchand and Laidler,2003). Basic rights include; freedom of speech, privacy, health, life, liberty and security as well as an adequate standard of living (UN,2018).
Human rights are the most critical rights that not every single individual ought to have the capacity to appreciate. In the meantime, human rights are likewise the absolute most effortlessly mishandled ones as pursuing them does not necessarily bring any direct financial advantage, especially to Multinational Companies (Li ; Gaur,2014). Truth be told, it is often in the interest of firms to comply with or even be an accessory to, human rights infringements by the host governments, as a result for economic favors CITATION Alf08 l 1033 (Alford, 2008)The development of UN guiding principles on human rights was created mainly on the grounds of MNCs variable responses to human rights and the weak bargaining power of the state, particularly in poorer countries CITATION Jav16 l 1033 (Javed Siddiqui, 2016)Mary Robinson, (n.d.). the UN high commissioner for human rights states that by following the global compact human rights guidelines you are entitled to a healthy bottom line and it is good corporate citizenship. Many companies find strength in their human rights record and it is the major key performance indicator all over the world.
Unilever went on to say that business can only flourish in societies where human rights are protected and respected. They also recognize that business has the responsibility to respect human rights and the ability to contribute to positive human rights impacts (UNILEVER’S HUMAN RIGHTS POLICY STATEMENT,2018).
Human rights methods to development are based on the central idea of the responsibilities of states and the international community to make that citizens of developing countries can claim their economic, social and cultural rights, together with their civil and political rights, and that all of these are fulfilled CITATION Kil15 l 1033 (Kilby, 2015).
Consequently, even though human rights are very essential, they do not benefit MNCs(Shaomin Li, Ajai Gaur, (2014).
Demenchonok, E. (2009) went on to say the universal concept of human rights is considered a regulative principle for the possible critique of any state, including a democratic one. Furthermore, different countries different aspects of human rights CITATION Shi97 l 1033 (Shirk, 1997).
Progressively the activities of the Multinational corporations operating both in developed and developing countries significantly influence the individual rights and freedom of the general population where they operate CITATION Maj11 l 1033 (Majinge, 2011).
It is criticized that human rights do not signify a complete truth, they represent ideology, which is self-contradictory to the basic idea of human rights itself and hence, there is a need for redefinition of the main presuppositions of modern conception of human rights represented in the Universal Declaration of Human Rights (Sanja Ivic, 2010). Cultural relativist discards rights as they feel they are not well-matched with their culture, others say human rights should be differentiated between formal and real human rights (Birden Güngören Bulgan,2015). Many authors reason that the Universal Declaration of Human Rights is Western-imperialist unlike Rawls’s idea which would be acceptable to different societies hence making human rights more familiar to different cultures and peoples, which would lead to better implementation of human rights (Birden Güngören Bulgan,2015). Your freedom is not my freedom, says the press to a trade. As you obey the laws of your sphere, so will I obey the laws of my sphere (Henry Gao, 2011 page 349). The above statement is reflected well in the case of Yahoo ; China.
Yahoo an organisation that gives Internet services around the world, with the of purpose, as stated on its site, “powering communities to create indispensable experiences; built on trust” (Yahoo website,2008). In the organisation’s very own words, Yahoo! Is “built on and fueled by trust” (Yahoo websute,2008).
In 2002 and 2004, Chinese citizens, Wang Xiaoning and Shi Tao, were captured, and sentenced to prison for 10 years for e-mailing pro-democracy views from data given by Yahoo (Venezia and Venezia, 2010). Yahoo!’s compliance with the Chinese authorities received a lot of critics back home in the USA. Yahoo got sued in the US court by Wang Xiaoning’s wife for violating human rights (the Sydney morning herald,2007). A major worry arises for all businesses that wants to take part in the global economy and stay competitive in the worldwide field- the battle of culture and legitimate and social qualities (Venezia and Venezia, 2010).
My opinion on the above case is that I do not find Yahoo at fault because it is operating in a country where the government is overly involved and overly protective on its reputation, so they had to abide by the rules of China for the company to continue operating in China. The people whom went over board and shared china’s private information should have thought twice about it, as they know best how the Chinese government operates and protects the country’s reputation. Though, Yahoo failed to obey human rights principle 1.
Yahoo had to adapt to the host country’s practices even if meant lowering its human rights standards.
The United Global Compact Initiative gives a strategy states that one of its aim is to assist companies to achieve human rights and not violate them, however I feel that this is only good on paper, the initiative does not follow up on companies, to check how they are contributing to the society and how they are practicing human rights in their organisations, instead they want companies to report their progress to them every 2 years, my question is how will they know if the information given by the company is correct, because of corruption on the other hand, companies may ask for favors in return for money, so the UN will never know how legit the information on the paper is, I recommend that the UN assign every company that has signed on the initiative a representative whom will be constantly reporting back to the UN on the progress of the company. The UN Global Compact should also become a compulsory initiative for all companies that wish to operate in other countries, as companies with power and money may opt to operate in a developing country with little or no government interference.
The UN should also take into consideration of changing the definition of human rights or broaden the definition, because as it states that everyone has universal rights but attempt to suicide, abortion and prostitution in most countries is considered a crime, how is it a crime? When the body belongs to the owner? The body does not belong to the state. Also looking at freedom of speech, why allow individuals to tarnish a companies’ name what about the rights of the stakeholders.
Furthermore, a lot of scholars and authors have criticized that the UN Global Compact is more of a western culture, hence I suggest that the UN should look deeply into this and make a way to make other cultures feel accepted.