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American firms scarce at UN forum on ethics

UNITED NATIONS -- Hundreds of executives, labor leaders, and policy makers gathered yesterday at the United Nations to discuss how to improve worldwide business conduct and ethics. But American companies were scarce, a reflection of concern over lawsuits and skepticism about the world body.

Just under 70 of the 1,500 companies that have signed on to the United Nations Global Compact are based in the United States. The voluntary agreement, which was established in 2000, promotes human rights, labor, environmental, and, starting this year, anticorruption standards.

By contrast, more than 330 companies based in France and 93 from India have committed to the pact. The remainder of the signers are from 67 other countries, roughly half from developing nations.

John Browne, chief executive of Britain's BP energy company, and other proponents of the compact say US participation is crucial, though Lord Browne said many American companies already practice good governance.

"The vast bulk of companies in the world exist, I think, in the United States, so therefore it is important that they be part of this," Browne told reporters.

Organizers say American corporations are starting to sign on at a quicker clip.

"A lot of companies took a wait-and-see-attitude," said Gavin Power, a senior adviser for the pact. "They were initially concerned that if they joined the compact it would be legally binding."

Power said that since the pact is voluntary and there is no penalty or other enforcement for companies that don't fully comply, there should be no legal fallout.

But it has been difficult to convince some American companies. "We're a highly litigious society," said Jagdish Bhagwati, a senior fellow at the New York-based Council on Foreign Relations. "Once a firm has signed onto something, then a whole bunch of lawyers can argue that it is some type of common international law."

Another factor is American perceptions of the United Nations, a global body of 191 nations that is often seen as a forum for the developing world and an opponent of US foreign policy objectives.

"Companies don't want to necessarily be associated with the United Nations," said Nancy Nielsen, a senior director at Pfizer Inc., which joined the compact two years ago.

She said she finds it ironic that companies express concerns about the United Nations because companies in other parts of the world view a UN tie as good for business.

Starbucks Coffee Co. says the agreement's focus on corporate responsibility reflects company values, and is a good way to woo international consumers. Currently, 25 percent of Starbucks retail stores are located overseas, a figure the company hopes will soon grow to more than 50 percent.

Other US companies agreeing to join the pact include Gap Inc., Hewlett-Packard Co., Newmont Mining Corp., and DuPont.

Participation in such a public forum has risks. This year, a group of unions cited sneaker maker Nike's participation in the pact when it asked the United Nations to sanction the company for allegedly violating the rights of workers in a restructuring. Nike responded by saying the pact did not apply to restructuring.

The United Nations has not acted on the request. Nike spokeswoman Caitlin Morris said yesterday that Nike continues to support the pact and its goals.

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