IOs Affecting Private Actors

International organizations are often in a position where they affect the private sector. The declaring of a pandemic by the WHO in march 2020 constitutes a great example of this. The pandemic and the actions taken to tame the virus had a great effect on the world economics. There is, however, many other examples as well. IOs often sign agreements with big corporations to gain expertise and money in order to fulfil projects. As already noted on the "Setup-page" the ideolical shift towards more capitalistic views in the 1980s taken in conjunction with the increased need for funding have increased the partnerships between IOs and the private sector.

One or a few companies are better off and competitors are not - the markets are affected.

Country Responses and the Reaction of the Stock Market to COVID-19—a Preliminary Exposition. This is an article by Dinh Hoang Bach Phan & Paresh Kumar Narayan (Taylor and Francis Online). 

The World Health Organization (WHO) in December 2020 listed the Comirnaty COVID-19 mRNA vaccine for emergency use, making the Pfizer/BioNTech vaccine the first to receive emergency validation from WHO since the outbreak began a year ago. This validation is a clear benefit for Pfizer/BioNTech. See the second link for more information. 

© Dinh Hoang Bach Phan & Paresh Kumar Narayan: Country Responses and the Reaction of the Stock Market to COVID-19—a Preliminary Exposition, Taylor and Francis online (published online 25 July 2020) 

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WHO Web Page, 31 December 2020

IOM Finland has entered into a partnership with a Finnish company called Logonet to improve maternal health in Somalia with Finnish Baby Aid Kits. The Finnish Baby Aid Kit is a childbirth and nursing kit that is especially developed to be used in developing countries as well as in crisis and emergency conditions. The kit contains materials for childbirth and nursing a new-born. This is a clear example of an IO affecting the market. One company is better off and the competitors are not.

© IOM Finland Web Page

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Finnish Baby Aid Kit Web Page

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IOM UN Migrations Web Page 

IOM and Waka Waka, a solar lanterns company, have teamed up to help the Rohingya community in Bangladesh. Fifty-five thousand Rohingyas live in makeshift settlements where basic services and infrastructure are practically non existant. Rohingya children often grow up without formal education and most families have lost their traditional forms of livelihood. The lack of electricity impacts the community: children struggle to study in the evening and women feel less secure when neighbourhoods become dark. For every Waka Waka solar light or charger that you buy, IOM will distribute one Waka Waka to a Rohingya family in need.

One company is benefited over others. 

© IOM Web Page 22.2.2021

The LEED+ project builds on successes of the Local Empowerment through Economic Development (LEED) Project. From 2011–2018, LEED has helped to reduce poverty, create sustainable jobs and build the peace in northern Sri Lanka.

The impact of the market approach is sustained and scaled outcomes. Thereby the project will achieve lasting change among both public and private actors by playing on their incentive and capacity to adopt new ways of working, so impact continues long after the project has ended. With constraints to economic growth removed, change can be replicated and mainstreamed across sectors rather than only be confined to the individual actors the project is working directly with.

Partners: Ministry of Labour & Trade Union Relations, Employers’ Federation of Ceylon, Department of Cooperatives, Department of Agriculture, Department of Fisheries, Cooperatives, Producer Organizations, National Chamber of Exporters, Sea Food Exporters Association, District and Provincial Departments.

Many of these partners, such as the National Chamber of Exporters, are working thightly with the private sector. The second link leads to the web page of the National Chamber of Exporters (Sri Lanka), where you easily will find information about all their partners. 

© ILO Web Page

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National Chambers of Exporters Sri Lanka Web Page

On December 17, 2019, the International Committee of the Red Cross (ICRC) and Grundfos, one of the world's top pump – and water solutions providers, officially signed an agreement that will gather their technological and humanitarian expertise around a clear and shared target: Bringing safe water to the world's most vulnerable.

We are aware that the ICRC is actually an NGO and not an IGO, but this example still provides a great example of an international organization affecting the private sector.

© ICRC Web Page 1.3.2021

In 1994, the World Heritage Committee launched the Global Strategy for a Representative, Balanced and Credible World Heritage List. Its aim is to ensure that the List reflects the world's cultural and natural diversity of outstanding universal value. To be included on the World Heritage List, sites must be of outstanding universal value and meet at least one out of ten selection criteria. 

It is not far-fetched to think of this listing performed by Unesco as market-affecting. Areas with sites included on the list have a better chance to attract tourists and visitors, which certainly affects private sector actors.  

© Unesco Web Page 17.3.2021

The Commonwealth of Nations, or the Commonwealth, is a political association of 54 member states, almost all of which are former territories of the British Empire. The chief institutions of the organisation are the Commonwealth Secretariat, which focuses on intergovernmental aspects, and the Commonwealth Foundation, which focuses on non-governmental relations between member states. The Commonwealth does a lot of things, this international organisation for instance helps boosting trade between member countries, to create prosperity. Naturally they cooperate with the private sector as well, which affects the markets. 

© The Commonwealth Web Page

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Commonwealth Secretariat Strategic Plan 2017/18 – 2020/21

According to this IO's web page:

Active collaboration with the private sector ensures the Center’s research can reach a broad base of farmers. Seed companies benefit from access to the World Vegetable Center Genebank; they can obtain the Center’s breeding lines to use as parent lines or as a source of traits for backcrossing programs.  The companies’ strength in commercial seed multiplication and marketing helps to rapidly spread beneficial research outcomes to farmers.

The World Vegetable Center is working with the private sector in order to strengthen the efficiency of the vegetable-based agriculture-sector in developing countries. This naturally has an effect on the markets. 

© World Vegetable Center Web Page 

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Chris Ojiewo, Abdou Tenkouano, M.O. Oluoch, Ray-Yu Yang: THE ROLE OF AVRDC -THE WORLD VEGETABLE CENTRE IN VEGETABLE VALUE CHAINS, Research Gate (published online Januari 2010).

Since 2000, National Contact Points (NPC) for Responsible Business Conduct (RBC) have had the mandate to act as non-judicial grievance mechanisms under the Organisation for Economic Co-operation and Development's (OECD) Guidelines for Multinational Enterprises. With globalised corporate activity intensifying and related developments, such as climate change and global inequalities accelerating, RBC and access to remedy are more relevant than ever. 

The OECD Guidelines undoubtly have an effect on the private sector and the NPC-requirements further enhance the meaning of these. 

© OECD Web page (mneguidelines.oecd.org) 19.7.2021

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OECD Web page (oecdwatch.org) 19.7.2021

 

Ever since its establishment on the eve of the 1992 Earth Summit in Rio de Janeiro, the Global Environment Facility (GEF) has been a key actor in the battle against environmental problems. The GEF provides grants to developing countries and countries with economies in transition.

It goes without saying that cooperation with the private sector is absolutely necessary in order to make the switch from fossil fuels towards renewable energy sources smoother. The GEF is, therefore, also naturally cooperating with the private sector in an attempt to expand the use of non-grant instruments and mobilizing the private sector. This constitutes a great example of an IO whose collaboration with market actors, at least by first look, is vital and easy to justify. It is also quite obvious that the GEF and its intense work of trying to put pressure on and influence the private sector has an effect on businesses.

© GEF Web page (thegef.org) 19.7.2021

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58th GEF Council Meeting June 2 – 3, 2020 Virtual Meeting Agenda Item 06

The United Nations High Commissioner for Refugees (UNHCR) is a UN agency working for refugees and homeless people. Ever since the refugee crisis originating from the Kosovo war in the late 1990s UNHCR has been operating with Microsoft in worldwide places during different crisis. Microsoft has contributed in developing better information management techniques and providing education opportunities about digital skills and has adopted an active role in the implementation of the projects while doing so.

This once again poses as a perfect example of an IO and a multinational corporation working together on serious issues that effect the entire globe. A partnership like this would have been quite unlikely before the idelogical shift towards more neoliberalistic views in the 1980s. It is also a more cost-effective way for an IO to promote its strategies and work for its goals.

© UNHCR Web page (unhcr.org) 12.5.2021

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UNHCR Web page (unhcr.org/partners) 12.5.2021

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Usa for UNHCR (unrefugees.org) 12.5.2021

Established in 1865, the International Telecommunication Union (ITU) is the oldest existing intergovernmental organization. Since 1947 the ITU is part of the UN family, as its specialised agency for telecommunications. The widespread transfers in ownership of national telecommunications to the private sector that have taken place during the second half of the 20th century has from the 1980s onward directed the focus of the ITU towards the private sector. This increased concentration to businesses and the markets has been discussed in a quite critical manner in the article Privatisation in the United Nations system: Patterns of influence in three intergovernmental organisations found on the setup-page of this web page. The article describes the ITU as an IO giving private sector interests a big role, a circumstance that challenges the claim that these forums are concerned primarily with apolitical issues. This is of course a claim that could be said to apply to many IOs. 

An intergovernmental organization such as the ITU is an organization composed primarily of sovereign states. IGOs are established by a treaty that acts as a charter creating the group. Treaties are formed when lawful representatives (governments) of several states go through a ratification process, providing the IGO with an international legal personality. IGOs are in other words founded on interests sprung from the public sector (governments). Are the public sector interests being hollowed out by the increased private sector involvement in the multilateral system? On the other hand, since the branch of telecommunications is so market-based today, why shouldn't the private sector be involved?

Check out the links to the left for further information about the private sector interests embedded in the operations of the ITU! 

© ITU Web page (itu.int) "development" 21.5.2021

 

 

 

When IOs grow strong and powerful so do the money and interests involved in their missions. Because of the tragic weaknesses of human nature this may lead to extreme cases of malfeasance. The importance of transparency and openess has already been discussed under the second research angle, but as this case visualizes the affect on the private sector, this particular failure is discussed under the third research angle.

The Oil-for-Food Programme (OIP) was established by the United Nations in 1995 as the largest humanitarian initiative in UN history with the mission to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities. The objective had at least to some degree a nobel cause - help the Iraqi civilians that suffered because of the sanctions imposed on Iraq by the UN Security Council. Yet due in great part to mismanagement and fraud, the OIP led to hefty profits for Saddam Hussein, hundreds of foreign companies, and several UN officials. The illegal profit for Saddam’s regime alone was about $2 billion. According to the independent think-thank organization, the Council on Foreign Relations, nearly half of the 4,400 companies involved in the program participated in bribery and kickbacks to benefit from the program. Over hundreds of western banks participated in the shady dealings and the former head of the OIP, Benon Sevan, himself received vouchers for at least 11,000,000 barrels (1,700,000 m³) of oil, worth some $3.5 million in profit.

This shameful conduct certainly shook the hole UN up and poses as a sad example of how partnerships between IOs and the private sector can lead to shameful briberies. A UN summit in September 2005 addressed several management reform initiatives, including reforms for: ensuring ethical conduct and strengthening internal oversight and accountability in the UN programmes and initiatives. 

While access to information is considered a human right and while democratic states have strict rules about the right to access to information this is, however, not the case when it comes to IOs. These organizations are not bound by the same rules as states are and yeat they often exercise the same sorts of powers - IOs are composed mainly of sovereign states and are a very important aspect of public international law. On top of this, IOs are often considered quite bureaucratic, which is sometimes problematic as IOs exercise a great amount of power. Check out the article by Alasdair Roberts to the left for more information on this particular subject. 

© Grigorescu Alexandrue: Horizontal Accountability in Intergovernmental Organizations, Ethics and International affairs volume 22, issue 3 (2008), Wiley Online Library. 

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Robert McMahon: The Impact of the UN Oil-for-Food Scandal, Council on Foreign Relations Web page (cfr.org), published May 11, 2006 5:01 pm (EST).

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George Bartsiotas: An expanding role: internal auditors in intergovernmental organizations are seeing an increase in their governance responsibilities, Internal Auditor (Vol. 65, Issue 2), april 2008. 

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Alasdair Roberts: A Partial Revolution: The Diplomatic Ethos and Transparency in Intergovernmental Organizations, Public Administration Review (PAR), volume 64, issue 4, Wiley Online Library, 16 July 2004.

Speaking of the importance of transparency in the section above, the World Bank Group has already in 2001 established its own institution that investigates allegations of fraud and corruption in the World Bank Group activities. Even though the INT has solved a big number of such cases ever since its establishment, the world bank group has still been accused of being secretive, unaccountable and ineffective and several World Bank officials have been under investigation for skimming millions of dollars from an African job creation program. Steps towards the right direction have been taken, but it is apparent that this IO still has some way to go...

© World Bank Web page (worldbank.org) "Integrity Vice Precidency" 25.4.2021

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Danaher, Kevin: 50 years is enough, The Case Against the World Bank and the International Monetary Fund, South End Press Boston MA, 1994.

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Woods, Ngaire: Unelected Government: Making the IMF and the World Bank More Accountable, Brookings Web page (brookings.edu), 1 March 2003.

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The Guardian Web page (theguardian.com), 18 May 2007.

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World Bank Web page (worldbank.org) "Access to Information" --> "Overview".