What impact does the Global Compact have on industry in India

New report by Chahoud, T.; Emmerling, J.; Kolb, D.; Kubina, I.; Repinski, G.; Schläger, C. / Deutsches Institut für Entwicklungspolitik (DIE) / German Development Institute (GDI) , 2007 

Summary (c/o Eldis)
This report assesses the impact of the current the United Nations Global Compact (UNGC) and corporate social responsibility (CSR) on industry in India. The paper dicusses the history of CSR and India and the more recent experience with multi-stakeholder initiatives. The study finds the progress on the implementation of the UNGC has proceeded slowly at the local level and that business self-regulation is still dominant.

The paper argues that the growing role of multi-stakeholder initiatives have addressed some of the obvious limitations of corporate self-regulation and have contributed to:

• an increase in the number of actors or stakeholders involved in consulting and decision-making processes
• some harmonistion of standards and implementation procedures
• the encouragement of companies to adopt social and environmental standards.

However, these achievements are limited by a number of general limitations to the CSR agenda:

• multi-stakeholder initiatives involve only a small fraction of the world's largest companies, including TNCs (Transnational Corporations), and the informal sector accounts for the majority of the labour force in developing countries
• the UNGC and such other initiatives as the Global Reporting Initiative (GRI) rely heavily on dialogue and best practices, but do not monitor compliance
• CSR projects do not necessarily accord with the social priorities of public policy
• A country's social services may be better assisted by companies simply complying with their fiscal obligations.

The report finds that in the particular case of India:

• very few civil society organisations and almost no trade unions are involved in the shaping of the CSR agenda
• most companies operating in India prefer self-regulation in CSR when it comes to partnerships with civil society organisations, their participation is limited to the implementation of community development projects.

The report recommends that to strengthen CSR and the role of the UNGC in India, the following activities are needed:

• the structure of the national UNGC networks should be improved
• civil society organisations should be integrated. Specifically, the Global Compact Society (India) should become more active in implementing the multi-stakeholder approach
• the UNGC networks should support awareness-raising and knowledge-sharing activities with respect to the major challenges facing CSR.

Full report available here