Term Paper: Sustainable Development - A Global

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The heart of good governance is popular participation, transparency, and public accountability (Dhanapala, 2001). Strong laws to protect the environment, for instance, are forged as a result of a sustained political process, a process that involves solid efforts throughout civil society. Enlightened leaders in government require this popular participation to adopt laws and policies to meet genuine human needs, just as the groups in society that are advocating such reforms must also depend upon official authorities to enforce such reforms.

According to Dhanapala (2001): "In this light, NGOs can be a catalyst of what is truly good about globalization. Though they are elected by no one and lack legal authority themselves to govern, they play a crucial role in helping the state to identify new goals, in educating the wider public of the need for action, and in providing political support that government leaders need to enact new laws, to implement new policies, and to see that they are enforced. NGOs also will have a role in exposing inefficient and ineffective policies and in mobilizing demands for constructive change.

Sustainable Development

Traditionally, the concept of development has been primarily economic (Parmetier, 2002). It was initially measured as the progression of Gross Domestic Product (GDP) of Gross National Product (GNP). However, as time passed, the concept of Sustainable Development evolved and it became clear that development could not be viewed purely as an economical concept. There was a realization of the necessity of a long-term view of development that would not prevent the development of future generations.

After the Cold War ended and communism was wiped out, capitalism emerged as the single major economic system (Parmetier, 2002). It is now a worldwide system, led by large companies operating in many countries, known as the MNCs. This globalization meant that national regulations and laws became more and more unprepared to fix limits in areas like labor and environmental law, as they were limited at the national level, while the economic actors were becoming more and more globalized.

While globalization is inevitable, there is a popular opinion that something must be done to address its excesses (Parmetier, 2002). If it continues at the current rate, the social and environmental issues wil lincrease, and a "backlash against globalization" (Williamson, 2003) may occur.

International environmental governance is founded in law (Segger, 2002). It is important to note that sustainable development was never meant to replace the environment as a priority, nor was environmental law and policy meant to provide the only answer for problems which reach far beyond this field. Environmental protection and restoration is important in its own right, and sustainable development serves to help other areas of law (trade, investment, social development) to address environmental challenges.

To understand how the international environmental governance (IEG) exercise relates to sustainable development governance, we must look at how IEG relates to other aspects of the UN system whose work largely affects sustainable development (Segger, 2002). With a strong report coming forward from a process of inter-governmental meetings on IEG, the World Summit on Sustainable Development (WSSD) has the unique chance to set broad directions for global sustainable development governance. According to Segger (2002): "Core pillars representing the three bottom line concerns would be IEG, International Social and International Economic Governance. While the latter benefit from strong, significant international organizations, there is not yet a specialized agency for the environment. This imbalance makes sustainable development governance less likely to achieve, and justifies a special focus on the environmental pillar."

Challenges for Businesses

The Earth Consensus developed a list of key challenges for business and industry. One of the greatest challenges is the issue of ethical codes to guide sustainable business practices (Lyon, 2002). Employers and employees around the world face the challenge of reconciling the personal ethical codes of individuals as employees with the corporate ethical codes (or lack of) of the employer. The competition model pressures businesses to maximize their profits by cutting costs as much as possible, often resulting in the unethical and unsustainable business practices such as the exploitation of the labor force, pollution and manipulation of local government. This problem is fueled by the corporation's main obligation to generate profit for the shareholders over and above the responsibility to conduct business operations in an environmentally and socially responsible manner.

Voluntary corporate initiatives present another challenge to businesses (Lyon, 2002). The increasing loss of trust between the public and corporations is having a negative impact on profit margins. The lack of corporate transparency is resulting in negative public images and poor public relations. While voluntary corporate initiatives towards sustainable business practices are a step in the right direction, in many cases, public and employee trust are betrayed by non-compliance with voluntary initiatives, suspicions of corruption, and outright violation of national and international laws.

A third major concern is accountability for trans-national corporations (Lyon, 2002). Trans-national corporations, because of their recognized power, are under particular scrutiny for both real and perceived deficiencies in accountability, transparency and regulation, in addition to violation of human rights and inordinate influence over national governments and, by extension, international agreements. Given their large size and scope of influence, trans-national corporations are facing strong pressure to comply with ethical norms in support of sustainable development.

The final major challenge for businesses is promotion of unsustainable consumption (Lyon, 2002). The promotion of unsustainable consumption patterns is partially due to advertising by businesses that adhere to a system in which profit is valued above all else. Pursuit of sales is encouraging businesses to promote a culture that desires material goods as a way to reach personal fulfillment.

The Role of MNCs in Sustainable Development

Although states remain the key actors of international relations, their supremacy has become more and more challenged in recent years (Parmetier, 2002). MNCs have emerged as the key actors of the global economic sphere. MNCs are the stakeholders that hold financial resources superior to most states, and accessibility to markets around the world. The evolution of the structure of industry towards higher technology and services, and the increased flexibility of Foreign Direct Investment (FDI) translate to the possibility that MNCs can move most of their operations across countries quickly and inexpensively. As a result, national regulation has weakened. The importance of MNCs demonstrates that they are key components in the debate over implementation of the concepts of sustainable development. In addition, it must be noted that MNCs are not all-powerful entities, and may be hurt by some aspects of globalization.

The corporate sector has become trapped by its own success (Parmetier, 2002). We live in a world of proliferating "problems without passports" and there is no government at the global level that can respond to them. Our international institutions, meanwhile, are too weak to fill the gap. Yet the corporate world has demonstrable global reach and capacity. It can make and act on decisions far faster than governments or agencies. And parts of it - particularly such brand-sensitive companies as Coca-Cola - are vulnerable to external pressure. Society, therefore, has come to demand help from the corporate sector in coping with adversity (Williamson, 2003)."

Codes of conduct are becoming more and more important among MNCs. A code of conduct is a formal declaration by a company of its corporate values and activities, which often include its supplies (Parmetier, 2002). The code devises minimum standards to which the company pledges to uphold on a voluntary basis. "Codes reflect the growing pressure on the private sector to recognize international standards, but also its willingness to enter into voluntary agreements (Williamson, 2003)."

These codes are described as "soft-law," as there is no legal party to enforce them (Parmetier, 2002). Still, they are good reference points, both for the company and for external actors, such as NGOs or customers. While they are good first step towards the accountability of international firms and a sign of awareness to social and environmental problems, there is no legal or common basis for these codes that could create a common ground to generalize their use. The GC was created to address these issues on a greater scale, while providing the backup of the UN and using the opportunities created by globalization.

The Global Compact

The GC is made up of a network of four UN agencies, companies that agreed to comply, and an advisory council with representatives from the business world and IOs.It is strictly voluntary (Parmetier, 2002). The concepts of the GC are based on nine principles (human rights, environmental, and social issues) drawn on major international conventions that the companies agree to respect. Once a year, participants report their initiatives to respect one or more of the principles.

The initiative of the Global Compact was the first time the UN developed a private-public partnership in a public way, integrating large and often controversial MNCs, such as Shell, Coca Cola and Nike (Parmetier, 2002). As a result, there have been varied reactions, both positive and negative. Most of the comments were… [END OF PREVIEW]

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