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Social Watch - http://www.socialwatch.org/node/17001
Private Funding & Corporate Influence in the UN – Fit for Whose Purpose? – Impact on Women’s Issues, Support?
Direct Link to Full 148-Page 2015 Report: https://www.globalpolicy.org/images/pdfs/GPFEurope/Fit_for_whose_purpose_-_final_final_draft_24-07-2015_US.pdf
By
Barbara Adams and Gretchen Luchsinger
A
critical issue repeatedly arising in the post-2015 negotiations relates to
responsibility. There is shared responsibility, the preference of rich countries
who would like to shift traditional official development assistance (ODA) and
other “burdens” given the “rise” of some developing countries. There is common
but differentiated responsibility, stressed by developing countries to link
common commitment with the reality of varying capacities.
Debates
also circle, directly or otherwise, around the role of the state, with some
camps continuing to promote its central responsibility. Others call for more
room for “stakeholders” to be responsible—notably, the private sector.
The
post-2015 agenda must aim for transformation, given that the current course of
development is so off track, from imbalanced consumption and production
patterns, to gaping inequalities, to the surpassing of planetary boundaries.
The intergovernmental negotiating process has recognized this need; drafts of
the outcome document have referred to its unprecedented scope and significance.
But will the rhetoric see action? How likely is that if some newly
“responsible” actors—namely, the large private corporations and foundations
from whom trillions of development dollars are expected to flow—are also among
the primary drivers of unsustainable development?
Fit for
whose purpose?
For a
look at how the balance between public and private responsibility has shifted,
and what this means in the real world in terms of adherence to international
standards and norms, one needs to look no further than the United Nations
itself. A new Global Policy Forum Report—Fit for Whose Purpose? Private
funding and corporate influence in the United Nations—details how private
corporations and corporate philanthropic organizations are increasingly paying
to play there.
Why are
corporate-led solutions to global problems seen as the way forward? How is it
that measures poorly aligned with UN values receive the UN stamp of
approval?
In
recent decades, the United Nations has been subject to two trends that may also
be familiar to some governments. One is the tendency for government donors to
earmark funds, leaving different entities scrambling to please donors instead
of providing strategic guidance for a consistent, coherent set of core
programmes. Many organizations have also ended up looking for new sources of
funds, often with the private sector. The underlying thinking is that the
public sector can benefit not only from greater private resources, but also
from private “efficiency” and “effectiveness.” Not factored into this equation
is how inefficient and ineffective large private actors have often been in
sustaining public goods and upholding human rights.
What
are some of the results of “outsourcing” the United Nations? Growing business
influence in political discourse, the fragmentation of global governance, the
weakening of representative democracy, unpredictable funding that undercuts UN
mandates, and a lack of accountability, to name some of the most obvious.
The UN
system is meant to serve all the peoples of this world and the planet they
inhabit. Total funding per year is around $40 billion, about half the budget of
New York City, and less than a quarter of the budget of the European Union. A
zero growth doctrine for the UN regular budget has been in place for over three
decades—since the 1980s, as governments have bought into the theory that the
public sector is somehow less capable, and backed away from adequately funding
the multilateral system.
What’s
the system to do? Increasingly, the answer has been: welcome in big business
and private philanthropies. Private funding for UN-related activities reached
an unprecedented US $3.3 billion in 2013, constituting 14 percent of all
voluntary contributions. The growing use of general trust funds—where
contributions have jumped by 300 percent over the last decade—allows donor
governments and private concerns to direct UN funding choices outside the “one
country, one vote” democracy of UN policy processes.
UN
gateways for business
Private
business interests now have multiple options to pay and play at the UN. The one
that has opened the door to many others is the UN Foundation—established as a
non-profit organization under US law to receive a billion dollar gift from CNN
founder Ted Turner. Since the foundation is not a UN organization, the United
Nations set up the UN Fund for International Partnerships (UNFIP) as a trust
fund to channel the money into UN activities. The relationship between the
foundation and the fund is governed by an agreement initially made public, but
not so for the most recent iteration.
In
1999, as the UN Foundation established itself, almost all of its annual
expenses went towards grants, primarily through UNFIP. Today, only around half
goes to grants, and less than 60 percent of grant funds go to UNFIP. Much of
the rest backs activities outside the UN system—aligned with UN causes, if
often carried out by large US NGOs. Deciding on the UN grants rests, in
practice, with the foundation; UNFIP reviews the selections.
Over
the last decade, the original Turner funds have remained stagnant, while
contributions from other private and public donors have risen, notably from the
Bill & Melinda Gates Foundation. Others include ExxonMobil, Goldman Sachs,
Cemex, Bank of America and Shell, where a variety of questions might be raised
around their links to issues ranging from environmental impacts to the stability
of global and national financial systems—in other words, some of the major
concerns at the heart of the post-2015 agenda. Where governments give funds,
there are questions around why these need to travel through the UN Foundation
instead of going directly into the UN system. For one recent UNFIP grant, an
internal UN audit flagged concerns about the source of donations, noting the
potential for reputational risks and a conflict in ethical values.
The UN
Foundation, despite now diminished contributions to UNFIP, enjoys a prominent
role at the UN. It freely encourages closer ties with business, often through
global “partnerships,” and to a large extent benefits from the UN name. Its
representatives advise the UN Secretary-General. In its own words, it has
evolved from a “traditional grantmaker to an actively involved problem
solver…to solve the great challenges of the 21st century.” All of this is
happening aside from the processes led by UN Member States that, from the
beginning of the UN system, have aimed at being democratic, inclusive and
responsive to the needs of all—not just a few.
Fragmentation
and more fragmentation
Around
60 percent of UN funding overall goes to activities for development and
humanitarian assistance—Member States have now made vocal calls for this system
to be fit for achieving the post-2015 agenda. Yet core or unearmarked resources
have plummeted from nearly half of all resources in 1997 to only a quarter
today. Non-core or earmarked resources make up the balance, imposing significant
administrative burdens and diluting programmatic focus. They introduce
fragmentation, competition and overlap—in the face of ongoing UN Member State
calls for more coordination.
One
response has been to try to diversify funding sources—in part by turning to the
private sector, often without fully acknowledging the reputational risks that
may be involved, or the strong potential for further fragmentation, and the
undercutting of the multilateral nature and value of UN development programmes.
In 2012, the Global Fund to Fight AIDS, Tuberculosis and Malaria, created in
the wake of donor dissatisfaction with UN agencies, was, ironically, the
largest donor to UNDP—exceeding even the largest government contributor. It is
financed in large part by the Gates Foundation, which is now also the second
largest donor to the World Health Organization (WHO), behind only the United
States.
UNESCO
has attempted to market itself to private donors by promising “a strong image
transfer by associating yourself with a reputable international brand” as well
as “benefit(ting) from UNESCO’s role of a neutral and multi-stakeholder broker”
and “strengthen(ing) your brand loyalty.”
The UN
Capital Development Fund, faced with resource constraints almost from the time
it opened its doors, is now the beneficiary of large multimillion dollar
donations from the Gates Foundation as well as Visa, MasterCard and Citigroup.
Why the sudden interest in a fund that spent years providing small amounts of
microcredit and assisting with local development finance? Could it be the
market possibilities from the estimated 2.7 billion people around the world who
do not yet have access to formal financial services?
Non-core
resources have skyrocketed, from under $10 million in 2006 to over $70 million
in 2014. Much of this funding goes, for instance, to programmes promoting the
use of electronic banking platforms.
Whose
health?
An
ongoing budget crisis has threatened the stability of the WHO, long seen as the
global health authority, even amid enormous global health concerns. Until 1998,
half its budget came from assessed government contributions spent based on what
the organization saw as the most compelling priorities. By 2014, assessed
contributions comprised less than a quarter of the budget.
What
has received the budgetary axe recently? Communicable diseases, and outbreak
and crisis response, both the top health priorities particularly of the poorest
countries. What’s flush with extra cash? Non-communicable diseases, and
preparedness, surveillance and response, both favoured by wealthier countries
who have bigger problems with the former, and are interested in protecting themselves
against disease outbreaks in the case of the latter. These shifts were on ready
display for the Ebola crisis, where the WHO’s weakened capacities, especially
due to cuts that slashed staff expertise, diminished its response, in stark
contrast to its widely lauded action on the SARS outbreak little more than a
decade before.
Other
concerns stem from the growing number of major pharmaceutical companies that
have become significant donors to WHO, including Glaxo-Smith Kline, Hoffmann La
Roche, Novartis, Bayer, Merck and Pfizer. In the swine-flu outbreak of
2009-2010, experts who advised that WHO declare it a pandemic had ties with
drug companies that in turn used the occasion to establish new vaccine
contracts with governments.
WHO
Director General Margaret Chan, in reference to her now highly earmarked
budget, says it is “driven by what I call donor interests.” These include, as
noted earlier, the Gates Foundation, which is mainly interested in technical
solutions with quick, measurable, visible outcomes. As for health systems—which
in most countries remain publicly run—Bill Gates has reportedly said that he
will never fund these because “it is a complete waste of money, (with) no
evidence that it works.” Concerns have been repeatedly expressed by researchers
that the large sums Gates sinks into what he thinks is worth funding stifle the
research agenda and could divert attention in some health systems from
underlying causes of diseases such as malnutrition.
Chan
notes that going against the business interests of powerful economic operators
is one of the biggest challenges facing health promotion. Many industries do
not hesitate to use well-documented tactics to fend off regulation and advance
their interests. In her words, these comprise “front groups, lobbies, promises
of self-regulation, lawsuits, and industry-funded research that confuses the
evidence and keeps the public in doubt. Tactics also include gifts, grants, and
contributions to worthy causes that cast these industries as respectable corporate
citizens in the eyes of politicians and the public. They include arguments that
place the responsibility for harm to health on individuals, and portray
government actions as interference in personal liberties and free choice.”
She
continues, “This is formidable opposition. Market power readily translates into
political power. Few governments prioritize health over big business. (…) This
is not a failure of individual will-power. This is a failure of political will
to take on big business.”
Slicing
and dicing development
Despite
all the talk about “integrated” issues in the post-2015 agenda, there are
already moves afoot to split up responsibilities and resources, most notably
through the use of so-call vertical funds that focus on single issues—some commentators
have gone so far as to propose having a fund for each goal. For example, the
new Global Financing Facility to support the UN Every
Woman Every Child initiative was launched at the Third International Conference on Financing for Development
in July. Managed by the World Bank with the blessing of a few major government
backers, it is expected to serve as a major vehicle for financing the proposed
SDG on healthy lives.
Every
Woman Every Child is one of a series of global multistakeholder partnerships
involving public and private actors. These are seen as a practical step in a
time of scare resources, pooling resources and skills, and allowing quick,
focused action on a discrete set of targets. Their approach may appeal
particularly to “partners” with little interest in making links and questioning
systemic issues that collectively drive deficits across all elements of
sustainable development.
For its
part, Every Woman Every Child aims to save the lives of millions of women and
children. How is it doing so far? In 2010, it identified a funding gap of $88
billion for reproductive, maternal, newborn and child health services in 49
countries. To date, it has met at most 19 percent of this gap, with, as is
often the case, only a portion of committed resources becoming actual
disbursements. But the number of commitment-makers has tripled, including a
number of governments, foundations, large NGOs and other global partnerships,
like the Global Fund to Fight AIDS, Tuberculosis and Malaria.
The
initiative’s most recent progress report trumpets “its success in mobilizing
the private sector.” Merck has made commitments to expanding childhood asthma
programmes and donate vaccines; Johnson & Johnson agreed to donate
medicines and help expand training for health workers. In a series of “Business
Impact Stories” published by Every Woman Every Child, Nestlé’s Women’s
Empowerment Initiatives are oddly championed as “integrated in the company’s
shared value approach and result in increased penetration, footprint and
additional volume for Nestlé; strong and emotional links with consumers…and
enhanced trust with all stakeholders.” It is not immediately clear how exactly
women’s empowerment fits into this equation.
Other
global partnerships include Sustainable Energy for All and Scaling Up
Nutrition. The former has allowed a definition of renewable energy that
includes hydropower and bio-fuels, despite negative environmental consequences
from both. Its initial Global Action Agenda was developed by a High-Level Group
where half the representatives were from the private sector, including top
managers from Bank of America (a major financer of the coal industry),
Accenture, Renault-Nissan, Siemens and Statoil. One civil society
representative was invited to attend, from the Barefoot College in India.
Similar patterns have persisted throughout the Advisory Board and other
governance structures set up to manage SE4All, with the board now chaired by
the UN Secretary-General and the President of the World Bank.
The
initiative so far has come up with solutions to finance sustainable energy that
rely on the same market mechanisms that tend to be associated with perpetuating
inequalities and unsustainability—they propose turning to bond markets, public
guarantees to mitigate private capital risks and insurance products, among
others.
It has
also mobilized a series of both financial and non-financial commitments from
public and private actors, like the US Power Africa initiative. Among the
biggest expected beneficiaries of the $7 billion scheme: General Electric.
Companies that make commitments under SE4All are prominently featured on the
initiative’s website, but come with no effective mechanisms to monitor and
review implementation.
Changing
the discourse
For the
UN system to respond adequately to today’s critical challenges, Fit for
Whose Purpose? stresses that public funding of it must increase. Funding
must be high in quality, including through strict limits on earmarking. Norms,
standards and guidelines must be set to govern all interactions of the United
Nations with the corporate sector, and both the intergovernmental framework and
UN institutional capacity for monitoring and overseeing partnerships must
expand.
Perhaps
most importantly, the surrounding discourse needs to fundamentally change,
drawing a clear distinction between those who regulate and those who are
regulated, and reclaiming the public space for the UN system and within it. And
responsibilities need to be more than just generically “shared”—they must be
well delineated and defined, grounded in norms that protect the collective
public interest, and linked to varying capabilities.
Post-2015
aims for a transformative agenda. Is this to be sought in the “new business
model” that has emerged, where the focus is, literally, on large corporate
interests? Can the UN system ever be fit for purpose for “we the peoples” if
private players, arriving with a mix of contradictory incentives, increasingly
channel funds and steer agendas without democratic scrutiny?
In the post-2015 agenda, Member States face a turning point. Endorse or tacitly accept this model. Or reaffirm that their primary responsibilities are to speak and act according to the inherent rights of their citizens, and the planet they share. Only the latter choice has hopes of putting the world on track for transformation.