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UN Global Compact Expels Thousands of Companies

Gina-Marie Cheeseman
| Thursday February 16th, 2012 | 1 Comment

The UN Global Compact expelled 3,123 companies since 2005 for failure to communicate progress on their efforts to implement the Compact’s 10 sustainability principles. The 10 principles cover areas of human rights, labor, environment and anti-corruption. A press release states that within the Global Compact “a significant number of participants continuously fail to produce evidence of progress.” First proposed by then UN Secretary General Kofi Annan in 1999, the UN Global Compact was established in 2000. There are over 10,000 participants in Compact, including over 7,000 businesses, which means that the majority of participants are businesses. Despite the over 3,000 companies expelled, the number of new companies joining the Global Compact “significantly exceeds the number of expulsions,” according to the press release.

While I applaud the Global Compact for expelling companies that fail to report on their progress, there is one company that is notably absent from the expulsion list: the Brazilian cattle ranching firm, Yaguarete Porá, most likely because they are up to date on their reporting. The company is still an active member despite being charged and fined $16,000 for illegally clearing the forests of the Ayoreo Indians of Paraguay. Yaguarete owns 78,549 hectares of forest that is part of the Ayoreo’s ancestral territory. The NGO, Survival International (SI) claims that the Ayoreo are the only “uncontacted Indians in the world having their territory destroyed for beef production.”

Ed note: The UNGC doesn’t make value judgements about the companies included in the compact, it only requires them to submit regular statements of progress. Making value judgements about the quality of reporting and the members in general would be another mission entirely and it would require an enormous staff to properly evaluate all the companies. Nevertheless, Gina Marie raises an important issue about the meaning of programs like UNGC, what they claim to do, and the problem with valuing only reporting and not the quality of reporting.

The Ayoreo wrote to the Global Compact in 2010 asking that the Brazilian cattle ranching company be expelled from the Compact. According to SI, the Global Compact replied to the Ayoreo that it has “neither the resources nor the mandate to conduct investigations into any of our participants.”

Yaguarete won SI’s Greenwashing Award in 2010 for “dressing up the wholesale destruction of a huge area of the Indians’ forest as a noble gesture for conservation.”

“The company, Yaguarete Pora SA, concealed key information about the existence of indigenous people in the area where it had a licence to work,” said Paraguay’s Environment Ministry (SEAM), which imposed the fine.

SI director, Stephen Corry, said, “This is textbook ‘greenwashing’: bulldoze the forest and then ‘preserve’ a bit of it for PR purposes. The public won’t fall for it. Yaguarete should stop playing games and pull out of the Totobiegosode’s territory once and for all.”

“This makes an utter mockery of the UN Global Compact,” Corry added. “If the UN doesn’t make sure companies displaying its logos abide by the rules, such initiatives become entirely meaningless. Yaguarete should be forced to leave the compact immediately.”

Why is it that Yaguarete is not one of the companies to be expelled from the Global Compact despite having been fined by the Paraguayan government? For the Global Compact to really be effective it must listen to the Ayoreo, and other groups like them.

Photo credits: Flickr user, Crossroads Foundation Photos


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  • http://twitter.com/gmcheeseman Gina-Marie Cheeseman

    That is completely true, but what good is the UNGC to the sustainability movement when it allows a company which commits environmental violations, like Yaguarete to be a member? I’m not seeing its usefulness. I doubt if any member of the Ayoreo think the UNGC is a good organization. I can’t help but think of what they must be feeling.