The U'N' Global Compact Principles

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Human Rights and the Private Sector Novartis
Foundation for Sustainable Development 27
November 2003

• The U.N. Global Compact Principles
• and
• Multinational Corporate Standards

Lee A. Tavis
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Establishing a Business Enterprise Human Rights
Stance

• 1. Strategic Positioning
• 2. Policy Framework
• 3. Implementation

• Human rights integral part of long-term
  sustainable corporate development

• Two critical human rights distinctions

• - Uniform standards versus flexible response
• - Levels of response to deprivation

• Reflect strategy and policy distinctions

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1. Strategic Positioning

• Goal
• Long-term sustainable corporate development

• Necessary Condition
• Efficient and competitive business model

• Sufficient Condition
• Respond to evolving societal expectations

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Novartis Strategic Positioning

• Selected human rights and UNGC as standard for
  social response
• Articulated in Corporate Citizenship Policy
• The Policy was developed in response to our
  commitment to the Global Compact InitiativeOur
  Policy on Corporate Citizenship outlines our
  pledge, and it is both a strategic business
  initiativeand the right thing to do.
• Dr. Daniel Vasella
• Novartis and Global Compact Initiative, p.
  741

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2. Policy Framework Human Rights Distinctions

• Network uniformity versus business unit
  flexibility
• Levels of response to deprivation
• U.N. Global Compact Principles provide guidance
  for both

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First Policy Distinction Network Uniformity and
Business Unit Flexibility

• A Component of most multinational policies

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First Policy Distinction Network Uniformity and
Business Unit Flexibility

• The uniform/flexible distinction reflects
• Philosophical debate over Universalism versus
  Relativism
• Juridical debate over Universal Standards versus
  the Margin of Appreciation

• For Human Rights U.N. Global Compact makes this
  distinction

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Uniform Requirements of the Global Compact

• Labour Principles 3 - 6
• Environmental Principles 7 - 9
• Principles are uniform standards to be applied to
  all business units across the multinational
  network

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General Requirements of the Global Compact

• 1. Secretary-General asks world business to
  support and respect protection of internationally
  proclaimed human rights within their sphere of
  influence.
• 2. Secretary General asks world business to
  make sure they are not complicit in human rights
  abuses.
• General Principles call for unique cultural
  sensitivity and response on part of business units

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Novartis Example of Uniform Standards versus
Business Unit Flexibility

• Subcontractor pregnancy testing job applicants
  without their knowledge
• Local management supports position
• Human rights argument opposes
• Complication Government owned and managed
  facility, as well as whole free trade zone.
• Decision The Novartis Executive Committee set
  voluntary testing standard

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Second Policy Distinction Levels of
ResponseCorrelative Duties

• Distinct levels of Correlative Duties associated
  with the deprivation of any fundamental right
• First Duties to avoid deprivation
• Second Duties to protect from deprivation
• Third Duties to aid the deprived

Principle 2 not complicit in human rights
abuses
Principle 1 support and respect the
protection of internationally proclaimed human
rights
Not included in the UNGC Principles
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3. Implementation of Strategy and Policy
Decisions

• Network Outreach Programs
• Network-Wide Uniform Standards
• Unique Business Unit Sensitivity and Response

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Network Outreach Programs

• Incorporating duties to aid the deprived
• Novartis programs on access to medicine
• Novartis Foundation developmental activities
• Novartis and the U.N. Global Compact
  Initiative, pp. 752-757.

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Operating Procedures To Ensure Network-Wide
Uniform Standards

• Procedures to ensure complianceto avoid and
  protect from deprivation
• Process at Novartis
• Articulate vision
• Process that ratchets toward vision
• Transparency
• Novartis and the U.N. Global Compact
  Initiative, p.742.

• Process modeled on 20 years of experiences with
  Health, Safety, and Environment initiatives

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Empower Business Unit Unique Cultural Sensitivity
and Response

• Protecting the deprived requires involvement of
  business unit with local institutions
• Success with local initiatives is a matter of
  business culture
• Business culture is enhanced through effective
  procedures to implement uniform human rights
  policies across the enterprise network

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ENDING NOTES

• Social response, the sufficient condition for
  long-term corporate development.
• UNGC Principles effectively provide a human
  rights response framework
• -- Legitimacy of Universal Declaration of Human
  Rights
• -- Provide basis of Network Uniformity and
  Business Unit Flexibility
• -- Define levels of correlative duties

• Implementation reflects policy distinctions
• -- Outreach to aid the deprived
• - Uniform Network standards to avoid deprivation
• - Business Unit flexibility to protect against
  deprivation