E N V I R O N M E N T , C O M M U N I T Y A N D C U L T U R A L D E V E L O P M E N T C O M M I T T E E R E P O R T C O V E R S H E E T

Agenda Item 5.9

9 October 2001

UNITED NATIONS’ GLOBAL COMPACT CITY INITIATIVE

Division City Strategy & Development

Presenter Austin Ley, Manager Strategic Research

Purpose

To advise Council on the nature and status of the Committee for Melbourne’s (CfM) proposal for Melbourne to be the first City in the world to engage with the United Nation’s (UN) Global Compact.

To obtain Council’s approval for the proposed means of developing this initiative jointly with the Committee for Melbourne by committing $15,000 for a project manager for one year, with subsequent funding subject to review.

To recommend that Council “engages” with the UNGC as an organisation by writing to the UN Secretary General as a demonstration of its support for the UNGC City Initiative.

Finance

Sponsorship of $15,000 to fund a project co-ordinator position for one year has not been included in the current 2001/2002 Operating Budget. This funding will be subject to the mid year budget review approval process.

Legal

Council’s functions are set out in Schedule 1 of the Local Government Act, 1989. A number relate to the UN global compact including:

“7. Any other functions relating to the peace, order and good government of the municipal district including –

(8) Environment control, protection and conservation.”

Section 7 of the City of Melbourne Act 2001 specifies further objectives that the Council has in seeking to achieve its purposes including:

“(a) to ensure a proper balance within its community between economic, social, environmental and cultural considerations within the context of the City of Melbourne’s unique capital city responsibilities.”

Lastly, section 8(2) of the Act provides that Council may perform its functions inside and outside its municipal district.

The proposed recommendation is therefore within the competence of Council.

Further legal advice on the effect of the United Nation’s Global Compact will be provided as required.

Recommendation

That the Environment, Community and Cultural Development Committee:

supports the concept UNGC City Initiative structure and commits $15,000 to jointly fund a project manager with the Committee for Melbourne for one year, with subsequent funding subject to review;

recommends that Council “engages” with the UNGC as an organisation by writing to the UN Secretary General as a demonstration of its support for the UNGC City Initiative; and

notes that this decision is being made by the Committee under delegation from the Council and is subject to the referral notice process.

Attachments:1. The UN Global Compact2. The Committee for Melbourne’s UN Global Compact Working Group3. Letter from UN Secretary General

E N V I R O N M E N T , C O M M U N I T Y A N D C U L T U R A L D E V E L O P M E N T C O M M I T T E E R E P O R T

Agenda Item 5.9

8 May 2001

UNITED NATIONS’ GLOBAL COMPACT – CITY INITIATIVE

Division City Strategy & Development

Presenter Austin Ley, Manager Strategic Research

Purpose

1. To advise Council on the nature and status of the Committee for Melbourne’s (CfM) proposal for Melbourne to be the first City in the world to engage with the United Nation’s (UN) Global Compact.

2. To obtain Council’s approval for the proposed means of developing this initiative jointly with the Committee for Melbourne by committing $15,000 for a project manager for one year, with subsequent funding subject to review.

3. To recommend that Council “engages” with the UNGC as an organisation by writing to the UN Secretary General as a demonstration of its support for the UNGC City Initiative.

Background

4. The UN Global Compact, launched on July 2000, is a joint initiative between world businesses and the United Nations to support and encourage responsible business operations and universal values. These values are based on the Universal Declaration of Human Rights, the International Labour Organisation’s Fundamental Principles on Rights at Work and the Rio Principles on environment and development. The Global Compact asks world business to support and uphold nine principles, as set out in Attachment 1, together with an explanation as to why companies would be interested in participating.

5. The UNGC involves a company simply writing to the UN Secretary General expressing its desire to “engage with” the UNGC and then demonstrate its commitment by integrating the principles within its day to day operations and providing the UNGC with an annual example of how it is complying.

6. Given the range of corporate citizenship and environmental activities being undertaken by government, businesses and NGO’s in Melbourne, the Committee For Melbourne (CfM) proposed an innovative idea in October last year that Melbourne could be the first “City” to sign on to the UN Global Compact. The CfM established a working group to explore this idea and approached the UN to determine if it was feasible for a “City” to join. A list of the Working Group members is detailed in Attachment 2.

7. The response from the UN has been very positive. In May this year, Mr Fred Dubee from the UN’s Global Compact office in New York visited Australia to meet with the working group and a group of industry leaders.

8. At its meeting on May 8 this year, Council resolved to support in principle the concept of the Council joining the UN Global Compact on behalf of the City of Melbourne, and that the concept should be further developed by the working group and a progress report be prepared to Council once the concept has been refined.

9. Following this meeting, the CEO wrote to the UN Secretary General indicating Council’s interest in the UNGC and received an enthusiastic reply from the UN Secretary General, see Attachment 3.

10. The following summarises progress to date on refining the UNGC City Initiative.

Issues

Why Consider a City Approach?

11. The UNGC has a target of 1000 companies engaging within a year and to date some 400 companies have “engaged”. Engaging with the Global Compact has not been high on the agenda of many companies, small or large, in Australia. Those that have engaged are companies headquartered overseas.

12. A City approach will enable a greater understanding and awareness of the UN Global Compact principally amongst companies in Melbourne, but also those based elsewhere in Victoria and Australia. The aim is to work with business to promote the importance of the Global Compact, and to advise CEOs, on the process and consequences of their engagement. This will reinforce Melbourne’s collaborative nature by aligning corporate and community goals.

13. The City will benefit because key organisations will be committing themselves to acting more responsibly with respect to the local community and the environment. This approach also presents the opportunity for greater collaboration between the Melbourne City Council, key corporates and NGOs, with the potential to marshal additional expertise and resources to deal with issues facing the city. The United Nations will benefit through having an additional means of promoting the Global Compact, particularly if the City-Initiative approach is adopted in other countries.

14. Hence the UNCG has the ability to link Council, Business and Community interest, around common city issues and projects.

What is the UNGC City - Initiative?

15. The UNGC City-Initiative is simply a framework linking organisations and activities involved in corporate sustainability under the UN Global compact umbrella. It promotes Corporate Citizenship by providing global exposure for local actions. The City Initiative relies on harnessing the enthusiasm of a range of organisations involved in corporate sustainability and provides a means of directing their resources to promote the UNGC and assist in range of community projects.

16. The UNGC City - Initiative Vision is that by 2010 the majority of companies operating in Melbourne will have “engaged with” the UNGC and annually demonstrate their commitment to its principles by:

16.1. maintaining a regular dialogue at CEO level with the Council and Councillors regarding the City’s planning and key issues facing the City; and

16.2. working collaboratively with key stakeholders on an agreed range of city projects and issues and providing an agreed level of resources.

The UNGC City Initiative Organisational Structure

17. The proposed organisational structure to achieve the vision is set out in the diagram below. It comprises a high level CEO group championing the UNGC, supported by a steering committee coordinating three support groups. The participants would contribute their enthusiasm, time and resources. The only costs would be a full-time project manager with appropriate office space with the participants providing the funding. In essence the agreement to establish and commit to this arrangement would constitute the first project to be offered to the UNGC for posting on their website.

Proposed UNGC City Initiative Organisational Structure

18. The following describes how this structure would operate.

CEOs Core Team – UNGC Champions

19. The Core Team would comprise four Board members of the Committee for Melbourne and a representative Councillor, who will commit to building a network of CG companies. Their aim is to get fifty companies to engage within one year. They would do this by a series of meetings with CEOs of targeted companies, starting with those companies already predisposed to the UNGC principles.

Steering Committee

20. The steering group would provide the secretarial and coordination support for the CEO Core Team and arrange meetings and presentations developed by the promotion support group. It would follow-up targeted companies, overseeing their progress through the “engagement” process by coordinating appropriate assistance from Business Linkages support group. The steering committee would comprise the Committee for Melbourne CEO, a representative from the City of Melbourne, the chairs of the support groups and the project coordinator.

Promotion Support Group

21. The Promotion Support Group would be responsible for developing a campaign to promote the UNGC in a variety of forums where information on the Compact would be appropriate, and to harness support for events where a connection with the Global Compact would be considered advantageous. The Promotion Support Group would make contact with the organisers of the specific events and arrange to have an appropriate speaker from the UNGC, together with presentation materials. It would work closely with the Business Linkages Support Group, to produce a flexible information kit on the UN Global Compact.

22. In addition to the above the Promotion Support Group would work closely with the UN Association to organise the UNGC Awards at a UN Association function.

23. This group would be key in developing any major UNGC event.

Business Linkage Support Group

24. A company’s engagement with the UNGC requires the CEO’s commitment. This will no doubt involve a senior member of staff assessing the implications for company. The business linkage support group will be the link between the company and the UNGC city initiative. Its role will be to liase with and provide advice and support to the company to assist it in engaging with the UNGC. It will prepare a “guide to engaging with the UNGC” business case. The business linkage support group will also refer the company contact to relevant organisations or associations that can assist with related matters, such as:

24.1. Triple bottom line issues;

24.2. Supplier audit trails;

24.3. Human rights;

24.4. Labour relations;

24.5. Environmental sustainability;

24.6. Business ethics and social responsibility;

24.7. Examples of UNGC demonstration projects; and

24.8. UNCG City Initiative collaborative project examples.

25. Other related networks, alliances or working groups not necessarily associated with the UNGC, could be identified and linked via this group. Another important role for the business linkage support group would be to advise companies on the nature of various organisations involved in corporate citizenship, sustainability and related activities. The corporate sustainability directory would form the basis of this advice.

26. This group would be responsible for ensuring the CEO Core Team approach to the target company’s CEO’s was followed up via contacts made with the target organisations. Members of the group would then provide guidance, support and mentoring.

Engaged Business Network

27. This would be an association of organisations that had engaged with the UNGC. It would assist the other support groups, meet regularly to share experiences, identify opportunities to implement the UNGC principles, work on collaborative projects and promote the UNGC.

UNGC Project Manager/Coordinator

28. The UNGC coordinator would be a member of the Steering Committee, work with each support group, and liaise with the event organisers and speakers to make appropriate arrangements for the presentations.

Time Frame

Proposed Action Plan

29. The first steps would be to establish the support groups, which would then be charged with preparing their respective action plans. A project coordinator would be employed with appropriate resources to assist this process.

30. Once the organisational structure is in place, the promotion support group would develop a promotional plan to capitalise on existing seminar and event opportunities.

31. With respect to target companies, an incremental approach is proposed, “starting with the converted”, namely firms that already have adopted good corporate citizenship practices. Many companies, particularly in the utilities and resources area produce annual reports initially including environmental, then sustainability and community issues. In the first year a network of 40 –60 companies who are already UNGC inclined could be established. It is also important to get branch offices of multi nationals involved at the local level. The aim would be to create a “snowball” effect so that each firm engaging with the UNGC encourages others to do likewise.

32. In order to facilitate firms engaging, a progressive approach could be adopted whereby a company sends an initial expression of interest to the steering committee. The reason for this is that some companies may have concerns about whether they should:

32.1. require their suppliers’ compliance with the UNGC principles;

32.2. promoting the UNGC to other companies and sharing their experiences; and

32.3. be open and responsive to public and internal scrutiny regarding the above.

33. The business linkage support group would then assist the firm to understand what’s required to progress. Stage 2 would involve engaging with the UNGC and illustrating adoption of the principles through, among other things, involvement in a collaborative project.

Develop a “Benefits to Business” package

34. The business linkage support group would need develop a “Benefits to Business” package to demonstrate that the UNGC is relevant and important to businesses in order to gain their interest. This would demonstrate that businesses do not operate outside society and that they have an opportunity to make a difference to the current negative impacts of globalisation.

Business Associations

35. The promotion support group would liaise with the Business Council to gain their support and enlist a representative.

Learning Groups

36. The business linkage support group would identify and or establish appropriate Learning Groups to assist companies interested in engaging with the UNGC, to understand what’s involved beyond just writing a letter to the UNSG. Learning groups should involve companies that have engaged, sharing their experiences. Suitable organisations such as Australian Corporate Citizenship Alliance (ACCA) should be approached to see if they could support this concept.

City/Community Projects

37. The steering committee working with the support groups would identify a range of UNGC City Initiative projects to which firms could offer resources, expertise and support. These could provide a range of options for companies to be involved in to demonstrate both their commitment to the UNGC principles and the “city” component of the “collaborative city concept”. Apart from the City of Melbourne’s projects, the “Centenary of Federation 100 hours program would provide a starting point.

Specific UNGC Sessions

38. It would be valuable to conduct UNGC sessions with each of the following groups to inform about this initiative, identify and issues or concerns they may have, enlist their support and identify their possible roles and contributions:

38.1. Universities and tertiary institutions;

38.2. Community Groups;

38.3. NGOs;

38.4. Business Council 3BL and the road to Rio + 10;

38.5. Williamson Committee; and

38.6. Prime Minister’s Community Business Partnership.

City Plan 2010

39. The UNGC City Initiative is consistent with Council’s draft City Plan 2010 and Triple Bottom Line aims, particularly in respect of promoting good corporate citizenship and environmental sustainability. Aim 1.4 is for the MCC to participate in and promote corporate citizenship in which corporations are focused equally on the social and environmental effects of what they do as well as their financial performance. As a global city, Melbourne must increasingly encourage and assist corporations to act as good local and global citizens. In turn, Melbourne will find it easier to form partnerships and capture business opportunities that will help to achieve the vision of ‘city sustainability’.

40. Specific City Plan 2010 objectives of direct relevance include:

40.1. demonstrate leadership in applying triple bottom line accountability to all Council decision making processes;

40.2. demonstrate leadership in public policy and management;

40.3. participate in relevant local and global initiatives and world protocols, programs and projects and promote these to other corporations; and

40.4. implement socially progressive policies that promote equitable access to income and employment opportunities.

Relation to Council Policy

41. Council’s Triple Bottom Line policy requires it to act with:

41.1. Social responsibility - making decisions that lead to greater physical, cultural and financial access and equity in service delivery and activities;

41.2. Environmental responsibility - not using more resources than required to deliver activities and services; and

41.3. Economic responsibility - promoting and maintaining a city’s economic development and growth in a sustainable manner.

42. The profile these initiatives would give Melbourne would assist in enlisting corporate support for City Plan 2010 actions, particularly those aimed at improving the City’s overall environmental performance.

Consultation

43. The consultation proposed for City Plan 2010 would therefore assist in the development of this initiative.

Government Relations

44. The CEO of the CfM has met and briefed the State Treasurer on the UNGC City- Initiative.

Recommendation

45. That the Environment, Community and Cultural Development Committee:

45.1. supports the concept UNGC City Initiative structure and commits $15,000 to jointly fund a project manager with the Committee for Melbourne for one year, with subsequent funding subject to review;

45.2. recommends that Council “engages” with the UNGC as an organisation by writing to the UN Secretary General as a demonstration of its support for the UNGC City Initiative; and

45.3. notes that this decision is being made by the Committee under delegation from the Council and is subject to the referral notice process.

Attachment 1Agenda Item 5.9

Environment, Community and Cultural Development Committee9 October 2001

THE UN GLOBAL COMPACT

The UN Global Compact, launched on July 2000, is a joint initiative between world businesses and the United Nations to support and encourage responsible business operations and universal values. These values are based on the Universal Declaration of Human Rights, the International Labour Organisation’s Fundamental Principles on Rights at Work and the Rio Principles on environment and development. The Global Compact asks world business to support and uphold the following nine principles:

1. support and respect the protection of international human rights within their sphere of influence;

2. make sure their own corporations are not complicit in human rights abuses;

3. freedom of association and the effective recognition of the right to collective bargaining;

4. the elimination of all forms of forced and compulsory labour;

5. the effective abolition of child labour;

6. the elimination of discrimination in respect of employment and occupation;

7. support a precautionary approach to environmental challenges;

8. undertake initiatives to promote greater environmental responsibility; and

9. encourage the development and diffusion of environmentally friendly technologies.

WHY COMPANIES PARTICIPATE IN THE UN GLOBAL COMPACT

Business leaders see many opportunities through engagement in the Global Compact. These include:

a. Demonstrating a position of leadership with regard to responsible citizenship;

b. Sharing experiences and learnings with like-minded companies and organisations;

c. Building relationships with other companies, government bodies, Labour, NGOs and international organisations;

d. Partnering with United Nations agencies, including the International Labour Organisation, the Office of the high Commissioner for Human Rights, the United Nations Environmental Program and the United Nations Development Program;

e. Maximising business opportunities by broadening the corporate vision to include the social dimension and by implementing responsible management policies and practices; and

f. Participating in result-oriented Issue Dialogues related to the critical problems facing our world eg. The Role of Business in Zones of Conflict (March 2001).

Attachment 2Agenda Item 5.9

Environment, Community and Cultural Development Committee9 October 2001

THE COMMITTEE FOR MELBOURNE’S UN GLOBAL COMPACTWORKING GROUP

1. Ms Janine Kirk, Committee for Melbourne;

2. Ms Patricia Collett, United Nations Association of Australia;

3. Ms Deanna Coles, BHP;

4. Mr Austin Ley, City of Melbourne;

5. Dr Erin Jancauskas, Melbourne University Private;

6. Ms Katherine The-White, Reputation Qest;

7. Ms Pamela Webb, New Think Global;

8. Ms Clare Verberne, Rio Tinto;

9. Mr Steve Levitt, World Vision;

10. Ms Jo Bramble, Principal, The Marketing Director;

11. Mr Alan Matheson, ACTU;

12. Ms Trish Roessler, RMIT;

13. Ms Cath Sullivan, Committee for Melbourne;

14. Mr Don Henry, Australian Conservation Foundation;

15. Mr John Simpson, Shell;

16. Mr George Pappas, Boston Consulting Group;

17. Mr John Best, ABN AMRO;

18. Ms Nick Harford, Visy Recycling; and

19. Mr Paul McSweeney, Baker & McKenzie.

Attachment 3Agenda Item 5.9

Environment, Community and Cultural Development Committee9 October 2001

LETTER FROM UN SECRETARY GENERAL