Download LIMUN: High School

LIMUN: High School
19th & 20th November 2016
Economic and Social Council
(ECOSOC)
The Role of Multinational Corporations in Sustainable
Development
CONTENTS
Introduction to the Chairs
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Introduction to the Committee
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Topic A: Your First Topic
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Introduction
History of the Topic
Sub-heading
Previous UN Action
Discussion of the Topic
Bloc Positions
Conclusion
Points a Resolution Must Address
Further Reading
Bibliography
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INTRODUCTION TO THE CHAIRS
Dear delegates,
Welcome to the United Nations Economic and Social Council (ECOSOC). My name is Ioana
Voina and I am a second-year B.Sc Political Economy student at King’s College London. I
have then great pleasure to be in the role of Assistant Director of ECOSOC during LIMUN: HS
2016.
For me, MUN became a true passion only one year ago, when during my first year of
Bachelor in Politics and Economics, I decided to join the University of Essex MUN Society as
president. Not only it did become my favourite extra-curricular activity, but it also
contributed to my personal development and it shaped my social life with amazing
friendships from all over the world.
As with every MUN, its real purpose lies on the quest to bring a world of young leaders and
thinkers together to debate and share different perspectives upon the most afflicting issues
in our contemporary world. During these 2 days, I really wish you all come together not only
in celebration of diversity, but also to reclaim our shared values and principles through
dialogue that aim to form bridges and build blocks to a better and more understanding
future.
Best,
Ioana Voina
Dear delegates,
My name is Kinza Khan and I am a first-year student at City University of London.
I am delighted to introduce myself as the Director of the Economic and Social
Council for LIMUN: High School, 2016.
Since the age of 13 I have been engaged in the London Model United Nations
Conference (MUNC). Starting as a delegate, I won awards for my debating skills
and I was soon promoted as a chair. This led me to the prestigious role of
chairing the Security Council. Alongside Chairing, I became Undersecretary General which I
enjoyed thoroughly and soon I was honoured to become Secretary General.
Throughout the years, my passion for MUNC has flourished. I have enjoyed meeting new
people, creating strong friendships, working in a team and being knowledgeable about our
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world. I hope you enjoy the next conference and create a lasting resolution which reflects
your hard work.
Good luck delegates.
Kindest Regards,
Kinza Khan.
INTRODUCTION TO THE COMMITTEE
One of the six main organs of the United Nations established by the UN Charter in 1946,
ECOSOC is the principal body for coordination, policy review, policy dialogue and
recommendations on economic, social and environmental issues, as well as for
implementation of the internationally agreed development goals. The Council, having
undergone reforms in the last decade to strengthen its working methods, serves as the
central mechanism for the activities of the United Nations system and its specialized
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agencies, and supervises the subsidiary and expert bodies in the economic, social and
environmental fields. Engaging a wide variety of stakeholders – policymakers,
parliamentarians, academics, major groups, foundations, business sector representatives
and over 3,200 registered non-governmental organizations (NGOs) – in a productive
dialogue on sustainable development through a programmatic cycle of meetings, the work
of the council is guided by an issue-based approach to ensure a sustained and focused
discussion among multiple stakeholders.
TOPIC A: THE ROLE OF MULTINATIONAL CORPORATIONS IN
SUSTAINABLE DEVELOPMENT
INTRODUCTION
“Sustainable development is the pathway to the future we want for all. It offers a framework
to generate economic growth, achieve social justice, exercise environmental stewardship
and strengthen governance.”
Ban Ki-moon
It is broadly considered that sustainable development cannot be achieved without its
economic influence. The United Nations recognize this phenomenon through its new
sustainable development agenda which involves the sustainable development goals (SDGs)
such as ending poverty, achieving decent work conditions and economic growth, as well as
setting responsible production and consumption chains. Bearing in mind that, in a globalized
and interdependent world, the multinational corporations (MNCs) are the main motors of
economic growth.
The economic role of multinational corporations (MNCs) is simply to channel physical and
financial capital to countries with capital shortages. As a consequence, wealth is created,
which yields new jobs directly and through “crowding-in” effects. In addition, new tax
revenues arise from MNC generated income, allowing developing countries to improve their
infrastructures and to strengthen their human capital. By improving the efficiency of capital
flows, MNCs reduce world poverty levels and provide a positive externality that is consistent
with the United Nations’ mission — countries are encouraged to cooperate and to seek
peaceful solutions to external and internal conflicts.
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It follows that a supporting role for the UN would be to motivate developing countries to
achieve the necessary political and economic environment that attracts foreign direct
investment (FDI). Nations lacking FDI have common characteristics: they have economies
that are heavily dependent on government regulations and controlled by inefficient stateoperated monopolistic enterprises, and they tend to have non-democratic regimes. As a
consequence, these nations are experiencing extreme rates of poverty, repressed human
rights, and excessive environmental damage. These problem countries are primarily
concentrated in Sub-Saharan Africa, South Asia, North Africa, and the Middle East.
HISTORY OF THE TOPIC
The world is faced with challenges in all the three dimensions of sustainable developmenteconomic, social, and environmental. More than 1 billion people are still living in extreme
poverty, and income inequality within among many countries has been raising in the last
decades. At the same time unsustainable consumption and income inequality have resulted
in huge economic and social costs and may endanger life on the planet.
Only in 1972, during the United Nations Conference on the Human Environment in
Stockholm the first true notion of sustainable development was born. Thanks to this
conference the integration of social equity and ecological caution were incorporated into
the economic development models for North and South. And this would result in the
creation of the United Nations Environment Programme (UNEP) and the United Nations
Development Programme (UNDP).
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As the years have passed, the elements of civil societies, with timid support from
governments, have been waking up to the need to implement worldwide solidarity to deal
with the risks of chaos disturbing nature’s balances and inequality in countries from SubSaharan Africa, South Asia, North Africa, and the Middle East. And little by little, the media
began to make these topics more accessible to the general public.
Following the Rio conference of 1992, most countries undertook to draw up a national
strategy for sustainable development. The implementation of these strategies has turned
out to be tricky, because it must address very serious issues within economic and political
contexts that are marked by strong inertia. The issues appear at every level and affect
practically every area of national policy. The various approaches reflect different points of
view, and in particular: more or less constrained free market practices, a desire to place
people at the heart of the economy, the greater or lesser determination of the various
countries in the world, and the balance between short, medium, long, and very long-term
interests.
In all this, the role of multinational companies (MNCs) turned to be underappreciated. The
MNCs are taking a long-term equity position in the domestic countries. If the investment
does well, both the MNCs and domestic countries are better off — the MNCs receive profits
and the domestic country receives jobs, an expanded tax base, and capital formation.
But, sustainable development will need more than MNCs providing capital and jobs, it
should be inclusive and take special care of the needs of the poorest and most vulnerable.
Strategies need to be ambitious, action-oriented and collaborative, and to adapt to different
levels of development at international levels. Through international strategies it will be
possible to systemically change consumption and production patterns, and might entail,
inter alia, significant price corrections encouraging the preservation of natural endowments,
inequality reduction, and strengthening economic governance.
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PREVIOUS UN ACTION
August 2013, during the UN Human Rights Council 24th session, the representative of
Ecuador made a statement on transnational corporations and human rights. The government
of Ecuador proposed a legally binding proposition in regards to business and human rights.
The instrument planned to ‘clarify the obligations of transnational corporations in the field of
human rights". The declaration was supported by the African Group, the Arabic Group,
Pakistan, Sri Lanka, Kyrgyzstan, Cuba, Nicaragua, Bolivia, Venezuela and Peru. Over a
hundred regional and international human rights organizations and social
movements welcomed the petition. The action was approved in Geneva on 3 and 4
December 2014.
In June 2014, the UN Human Rights Council adopted the resolution.
March 2016: States discussed the report of the first session of the Intergovernmental Working
Group on transnational corporations and other businesses with respect to human rights.
At the 26th session of the UN Human Rights Council in Geneva, two resolutions were
nominated for adoption by the Council. The first is a resolution drafted by Ecuador and
South Africa and signed also by Bolivia, Cuba and Venezuela. The other is a resolution
drafted by Norway and supported by 44 co-sponsors and adopted by agreement by all
regions.
On 26 June, the UN Human Rights Council adopted Ecuador and South Africa’s resolution.
The votes were: 20 in favour (Algeria, Benin, Burkina Faso, China, Congo, Côte d'Ivoire,
Cuba, Ethiopia, India, Indonesia, Kazakhstan, Kenya, Morocco, Namibia, Pakistan,
Philippines, Russia, South Africa, Venezuela, Vietnam), 14 against (Austria, Czech Republic,
Estonia, France, Germany, Ireland, Italy, Japan, Montenegro, South Korea, Romania,
Macedonia, UK, USA) and 13 abstentions (Argentina, Botswana, Brazil, Chile, Costa Rica,
Gabon, Kuwait, Maldives, Mexico, Peru, Saudi Arabia, Sierra Leone, UAE).
On 27 June, the Council adopted by consensus Norway's resolution.
BLOC POSITIONS
There are many blocs who have different views with regards to the role of multinational
corporations in sustainable development.
NAFTA: The North American Free Trade Agreement (NAFTA) was signed on 1 January 1994.
It includes the USA, Canada and Mexico. The aims of NAFTA include eliminating trade
barriers among its member states, promoting an environment for free trade as well as
increasing investment opportunities. Americans are concerned with multinational
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companies because as many as ‘14 million American jobs’1 are potentially at risk over the
next decade. Many opponents of multinational corporations believe they take jobs away
from Americans, therefore increasing the trade imbalance.
Mercosur: Mercado Comun del Cono Sur (MERCOSUR) was established on 26 March 1991.
Associate members include Colombia, Ecuador while other nations such as Brazil and
Venezuela are undergoing the process of becoming a full member. Their aim is to
accelerate sustained economic development based on social justice and the reduction of
poverty. The effects of multinational corporations on Brazil are that they have created a
positive impact, especially in terms of FDI.
ASEAN: Association of Southeast Asian Nations (ASEAN) was established on August 8, 1967.
Some members include: Myanmar, Vietnam and Thailand. The goals of ASEAN is to
accelerate economic growth and promote regional peace and stability. Multinational
corporations in Myanmar have caused an unpopular reaction by the consumers due to the
sweatshops of PepsiCo in Myanmar exploiting the people.
CONCLUSION
To conclude, delegates we are the committee of ECOSOC who aim to think of new
innovative ideas in regards to sustainable development. Our reflection, debate and
creativity will help tackle the issues multinational corporations bring to sustainable
development.
Despite multinational corporations at times, providing prosperity for an area, they have no
obligations to a community or a place. They can exploit the workers and people within an
area knowing these vulnerable individuals have no alternative form of income, exacerbating
poverty. These mass corporations also have no incentive to repair communities which have
been devastated by the introduction of new technology as well as plant closings, abusing
the people once again. As well as this, corporations lack justice. Multinational corporations
create income disparities rather than eradicating it and so this begs the question, how can
we eliminate these issues?
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http://www.referenceforbusiness.com/management/Mar-No/Multinational-Corporations.html
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The obstacles the UN face in overcoming the exploitation of multinational corporations are
wide ranging. The UN does not address the role of multinational corporations in sustainable
development explicitly or directly. This is due to nation states being divided over the issue. It
is your duty as delegates to provide a solution for this issue.
POINTS A RESOLUTION MUST ADDRESS
● An issue that you may face when writing draft resolutions is that multinational
corporations are beneficial because they can lead to prosperity. By having
restrictions and red tape it may deter companies from continuing to invest in
developing nations. This will lead to no job opportunities being available for the
residents. This may impact resolutions because the resolution will need to suit the
multinational corporations as well as the countries involved.
● Most multinational corporations are from the West therefore they believe that the
work of the multinational corporations are positive. This may cause a split between
the different trade blocs. A resolution should try and unite all nation states together.
● Powerful multinational corporations have the power and influence to intimidate a
government to do as they desire. Finding a solution for this has proved to be difficult
especially if the multinational corporations are wealthy.
FURTHER READING
http://www.referenceforbusiness.com/management/Mar-No/MultinationalCorporations.html- An in depth understanding of multinational corporations.
https://www.tni.org/en/article/united-nations-and-transnational-corporations-deadlyassociation- The UN attempting to control multinational corporations
http://www.mpil.de/files/pdf3/mpunyb_11_weilert_14.pdf- An overview of transnational
Corporations in UN law.
http://www.henkeladhesives.com/com/content_data/Detailed_Statement_Brazil_Cavalcanti.pdfmultinational corporations face abroad
http://www.referenceforbusiness.com/management/Mar-No/MultinationalCorporations.html- Evaluation of multinational corporations.
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Challenges
BIBLIOGRAPHY
http://www.referenceforbusiness.com/management/Mar-No/MultinationalCorporations.html- Accessed on 20/10/12
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