Commission of the Bishops’ Conferences of the European Community

Global Governance

Our responsibility to

make globalisation

an opportunity for all

A report to the Bishops of COMECE

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Foreword

This report on Global Governance has been in preparation forone and a half years. On receiving this timely text, we should like tothank all those who have contributed to its elaboration. We are mostgrateful to them for the time, thought and work they have invested.Drawing upon personal experience and competence in various fields aswell as on the wealth of the Church’s social teaching, this report is anexpression of the Church’s desire to explore and respond to a needexpressed by society as a whole.

We welcome this report for three reasons in particular. Firstly, itbrings us face-to-face with the concept of global governance. Globalgovernance, as opposed to global government, means a networkedapproach to global problems that involves governments, business andnon-governmental organisations as well as Churches and otherreligious communities. Real efforts towards a system of globalgovernance can reassure people that our world is not out of control orlacking guidance. Working towards a credible mechanism for globalgovernance offers the prospect of addressing global issues in wayswhich both protect against hegemonies of whatever kind and alsopromote the fundamental values of justice and freedom. This is goodnews. We understand that for good reasons the report does not addressevery matter that requires a solution at the global level. However, thesearch for solutions to issues relating to international security, trans-national migration, global media, scientific and technical advances andbio-medical questions, may benefit from the pioneering work that hasbeen accomplished in this report.

Secondly, we welcome the report especially on behalf of theCommission of the Bishops’ Conferences of the EuropeanCommunity (COMECE) whose task is to monitor and comment onEuropean Union policy. A key conclusion of the following text is thatbecause of its own genesis, architecture and self-understanding, as wellas its responsibilities in policy areas such as trade, competition anddevelopment co-operation, the EU has a crucial role to play indeveloping the existing international order into a system of globalgovernance.

Table of Contents

Foreword 3

Executive Summary 6

Global GovernanceOur responsibility to make globalisationan opportunity for all

The Report 11

Preface 12

Introduction 13

Part I: Living in an interdependent world 14

Part II: A set of core values and principlesto make global governance work 21

Part III: Concrete steps towards global governance 28

Conclusion 38

Annex: Members of the group 39

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We consider that the European Union is a pioneering model ofregional integration, setting an example for the future of governancein many other regions of the world, despite its still nascent andtherefore contingent character in some policy areas. We hope that thisreport will also contribute to reviving reflection and public debate onthe deeper significance of European integration.

Finally, this report comes at a decisive moment for the future ofglobal security and therefore of governance. When the authors decidedto present it to us in September 2001, they did not imagine that itspublication would coincide with a period of great anguish, pain anduncertainty. The terrorist attacks on the World Trade Center in NewYork and the Pentagon in Washington on 11 September destroyedthousands of innocent lives and brought grief to the friends andfamilies of the victims. We are all deeply saddened by these events andwe are united in condemning the violation of the sanctity of humanlife.

In the aftermath of these crimes against humanity, there can beno easy solution. Military and security measures alone will not resolvea deep malaise in many regions of the world, where the richer parts ofthe world are resented as being unfair, selfish and oppressive. It is notonly in these regions that fanaticism and extreme hate have developed;poverty, inequality, hunger and humiliation, wherever they are found,provide a fertile breeding ground for fanaticism and terrorism.Reducing the risk of terrorism therefore also necessitates a serious andrenewed effort to promote the development of peoples.

Globalisation has been brought about as a result of immensetechnological progress. It has brought us an exceptional growth in theexchange of information, capital and goods. However, it has notcontributed sufficiently to significantly reducing poverty andinequality. We therefore hope that the proposal for global governance,contained in this report, will point towards a new approach todevelopment. We recall what the Second Vatican Council said in itsPastoral Constitution ‘Gaudium et Spes’: "all that men do to obtaingreater justice, wider brotherhood, a more humane disposition ofsocial relationships has greater worth than technical advances"(No. 35). The relevance of this statement has been reconfirmed in areal and dramatic sense.

We hope that this report on Global Governance will find manyreaders among Christians and all people of good will. We invite you tosend us your reactions and comments.

Brussels, September 2001

Bishop Josef Homeyer, President of COMECEBishop Attilio Nicora, Vice-PresidentBishop Adrianus van Luyn, Vice-President

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Executive Summary

1. The pursuit of the global common good is the core challengefor all concerned with governance today. It is a responsibility shared byall: individuals, families, companies, as well as states and their leaders.Thus far most of these actors have been motivated chiefly by their ownspecific interests. In the future world of globalisation mankind willneed to accept new values in order to alleviate the plight of the poor.The hope for such a new vision has inspired this report on globalgovernance. It was commissioned by the members of the Commissionof the Bishops’ Conferences of the European Community(COMECE) as a follow-up to the Social Congress on Europe’sResponsibility for Global Development, held in Brussels 31 March –1 April 2000, just a few months after trade ministers failed to launch anew trade round at the ministerial conference of the World TradeOrganisation (WTO) in Seattle.

Deciphering the signs of the time

2. In the span of one generation global economicinterdependence has grown extraordinarily. This development,generally called globalisation, is the consequence of enormoustechnological progress and the determination, demonstrated bypolitical decisions, to open national economies internally andexternally to competition. This process will continue; it will neitherstop nor go into reverse. Thus far, globalisation has broughtimprovements and opportunities for many people in many parts of theworld. However, many have not been able to adapt to it and thus wereexcluded from its benefits. Consequently they are disadvantaged.Whilst globalisation makes it possible to enjoy the experience ofencountering a world of diversity and greater efficiency, it also raisesfears about the loss of cultural identity. Global governance is the key toensure that the positive impacts of globalisation are enhanced and thatits potentially negative effects are diminished.

3. Whilst economic interdependence has been reinforced inrecent years, the absolute number of very poor people has grownworldwide. Material inequality between countries and within countrieshas also increased. Moreover, significant global environmental riskshave made their appearance on the world stage. To date, efforts toreduce poverty and inequality through official development aid(ODA), which in any case is shrinking, have produced only poorresults. The same is true for international efforts to reduce globalenvironmental damage.

4. From now on, the world and its peoples - God’s Creation -need and deserve another, more coherent approach. Open economieswill not be sustainable without the willingness of states to open uppolitically as well. In a world marked by growing interdependence, theEuropean Union is a unique and convincing example of a governancesystem based on supranational and multilateral political co-operation.Furthermore, the political will to achieve and maintain a system ofglobal governance must be nourished by firm convictions and values.In a world where no single power – even the strongest – can or shouldexert full control, worldwide agreement on a list of basic values andprinciples is essential.

Values and principles for global governance

5. This report proposes a series of core values and principles asthe foundation of a system of global governance: respect for humandignity, responsibility, solidarity, subsidiarity, coherence, transparencyand accountability. Churches and other religious communities play avital role in promoting these values.

6. Growing economic interdependence must be matched bypolitical interaction at the global level. This is necessary in order to dealeffectively with aspects of finance and trade that cannot be resolved atcountry or regional level. It is also a prerequisite for engaging in a newjoint effort to reduce worldwide poverty and global environmentalrisks. Global governance should not, however, take the place ofnational governments and regional organisations such as the EuropeanUnion. It cannot replace them; it must rather acquire legitimacy from

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them. Whether poorer countries will develop economically, whetherindustrialised nations will master the twin challenges of more globalcompetition and an ageing population, depends primarily on thequality of their domestic policies.

7. In addition to governments, a system of global governancehas to involve a series of different actors who share a certain number ofbasic values. The business sector must strive to conjugate its own long-term interest with the global common good. Responsible input byinternational non-governmental organisations provides a significantcontribution to the emergence of a world public opinion.

Proposals for the existing international institutions

8. In institutional terms, the creation of a system of globalgovernance requires the revision of the mandates of existinginternational organisations. This is necessary in order to addressconflicting objectives, barriers to coherent behaviour and gaps in theinstitutional architecture.

9. The present difficulties related to launching a new round ofcomprehensive trade negotiations in the World Trade Organisation(WTO) illustrate current problems of governance. The existing WTOagreement on agriculture needs to be revised in order to improve mar-ket access for developing countries. Multilateral agreements on invest-ment, on principles for competition policy and rules for public pro-curement are necessary to safeguard against possible distortionsstemming from unilateral actions, to improve investment conditionsworldwide, including in the developing countries, and to help to com-bat corruption. Such agreements could be worked out in the frame-work of the WTO. Issues relating to social rights and environmentalstandards need to be addressed. Ultimately they have to be entrustedto the competent international organisations.

10. Recent initiatives by the Organisation for Economic Co-operation and Development (OECD) against money laundering and

harmful tax practices are promising and they must be vigorouslypursued. These initiatives, as well as those launched by theinternational financial institutions with regard to stability in financialmarkets, should be continued.

11. The International Labour Organisation (ILO) needs astronger mandate to defend core labour standards which aim toguarantee freedom of association and collective bargaining, toeliminate all forms of forced labour, to abolish child labour and toeliminate discrimination in respect of employment and occupation.The ILO should be mandated to deal effectively with social concernsand especially with the problems of unemployed and migrant workersin this era of globalisation.

12. Another lacuna in the international institutionalarchitecture is to be found in the obvious weakness of theenvironmental pillar. This warrants urgent attention in the form ofcomprehensive reform of United Nations Environment Programme(UNEP) or even better the creation of a new World EnvironmentOrganisation (WEO) to enable it to initiate and supervise internationalefforts to deal with the deterioration of the global climate, thedepletion of the ozone layer, the conservation of bio-diversity, theprotection of forests, the ongoing process of desertification and thetask of supplying sufficient clean water for all. Other failures orweaknesses of existing international institutions may appear in thecourse of further analysis, but the above-mentioned require urgentattention.

Creating a Global Governance Group (3G)

13. This report recommends the creation of a GlobalGovernance Group (3G). This Global Governance Group would dealwith horizontal matters on the global level and assure a minimum ofco-ordination and coherence in the system. Its contribution in thisregard is essential, because even after a comprehensive review of theexisting institutional architecture, the problem of coherence,orientation and final arbitration is likely to persist. The system of globalgovernance will remain unfinished without this final key stone.

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14. If a Global Governance Group is to be effective, its membersmust be the heads of government. They are the only actors who candeal with horizontal issues in a credible and effective way. A GlobalGovernance Group needs legitimacy through an acceptablerepresentation of all nations. It should therefore be composed of thetwenty-four heads of government, which have executive directors onthe boards of the International Monetary Fund (IMF) and the WorldBank. The selection mechanisms at these institutions are based on alimited number of constituencies which group countries withgeographical, historical or economic ties. They have the advantage ofbeing tested and respected for more than fifty years and they are viableat least for an initial phase. The Global Governance Group would bejoined by the secretary general of the UN and the director generals ofIMF, World Bank, WTO, ILO and the proposed new WorldEnvironment Organisation (WEO).

15. It is our hope that the Global Governance Group wouldgive a voice to all regions and peoples of the world and thus bring uscloser to the "public authority with universal competence" for whichPope John XXIII called in 1963.

Global Governance

Our responsibility to make globalisation an opportunity for all

The Report

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Global Governance

Our responsibility to make globalisation an opportunity for all

Preface

1. Following their Social Congress on Europe’s responsibilityfor global development, the Bishops of COMECE (Commission of theBishops’ Conferences of the European Community) asked a group ofexperts1 to prepare a report on the ongoing debate on globalgovernance. This report focuses on the essential underlying conditionsand the concrete steps needed to establish a system of globalgovernance. We, as Christian lay people, with varied levels ofexperience of work in international organisations and businesses,should like to express our gratitude for the opportunity given toco-operate as an international and intergenerational group on this text.

Introduction

2. Over the last three decades cultural, economic,environmental and political interdependence on the global level hasincreased and reached a degree that was unknown before. To face thisphenomenon of globalisation and to adapt political decision-makingto this new situation, this report recommends a stronger system ofglobal governance. It is inspired by Pope John XXIII’s prophetic vision- as expressed in his 1963 encyclical letter Pacem in Terris - of the"need for a public authority with universal competence" (No. 137).This is not necessarily to suggest that an entirely new set of globalinstitutions is required. The existing institutional framework requiressome reform but above all support and resources. Therefore the reportfocuses on the effective additional steps required to create a coherentglobal institutional architecture2. Given its particular experience overthe last fifty years, the European Union and its member states bear aparticular responsibility to promote reforms at global level.

3. The report itself contains three parts. The first chapterpresents some observations concerning the ever-growing globaleconomic interdependence, the worldwide extent of poverty andinequality, the crisis of our natural environment and finally the spiritualdimension of greater global interdependence. At the end of the chaptera broad definition of "global governance" is given. The second chapterdiscusses core values and principles that would need to underpin globalgovernance. The third part offers concrete proposals for a number ofinstitutional and collective steps to facilitate a more coherent andefficient system of global governance.

A report to theBishops ofCOMECE

A public authority with

universal competence

2 Security matters and the specific issue of migration have been deliberately excluded from theseconsiderations. Their complexity would overburden this report. However, possible responses tothese matters could be influenced by the proposals which are developed in the text.1 A list of the members of the group can be found in Annex 1.

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7. The post-world war period has witnessed unprecedentedeconomic growth around the globe. Average living standards haveimproved across the world, life expectancy has risen, access to healthcare has improved, infant and child mortality has fallen, schoolenrolment has increased and the gap between girls and boys in schoolenrolment is narrowing. However, notwithstanding the remarkablesuccess of the world economy, at the dawn of the 21st century thevicious circle of stagnation and poverty in the poorest countriesremains unbroken. Despite a decline in the proportion of people livingin extreme poverty since the early 1990s, about one fifth of the world’spopulation continues to live on US$1 or less per day, and a furtherquarter lives on less than US$2 a day. Poverty is particularly serious inAfrica, where nearly half the population lives on less than US$1 perday.

8. The international community is entering the new millenniumwith the largest difference ever recorded between rich and poorcountries. Whilst some countries experienced strong economicprogress, economic growth in others remained moderate, stagnated oreven declined. In a large number of poor countries during the last25-30 years the per capita income did not rise but fell in absoluteterms. Today, the per capita income of the richest 20 countries isalmost 40 times higher than that of the poorest 20 countries. Fortyyears ago it was less than 20 times higher. At the same time, the gapbetween the rich and poor is increasing within many countries andregions. In all countries it is the less skilled who are more likely to bein poverty rather than those with the required education and skills.

9. Growing inequality is both a result of existing poverty trendsand an impediment to poverty reduction. Overall, it threatens thecohesiveness of local and regional communities and could ultimatelylead to upheaval, political instability and violent conflicts within andbetween countries and regions. Sharp differences in income levels arealso a major reason for migration, which can further dampen thedevelopment potential in the country of outward migration. A just andbalanced form of global governance may help to prevent such anoutcome.

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Part I

Living in an interdependent world

4. Since the 1970s, trade in goods and services betweencountries and continents has almost tripled. The rise in foreign directinvestment has risen dramatically, reaching an annual level of morethan US$800 billion. This degree of international financial marketintegration is unprecedented in history. Growth in trade and foreigndirect investment has substantially outperformed growth of worldoutput. This provides evidence of an ever-growing internationaldivision of labour and of a deepening interdependence of the worldeconomy.

5. Globalisation has become a widely used term to describe theongoing process of increasing global economic interaction. It isspurred by impressive technological progress especially in the fields ofinformation, communication and transport, as well as by politicaldecisions to open up and deregulate markets, and further enhanced byinternational competition. Although initially facilitated by intentionalpolitical decisions, it would seem that the trend towards deepeningglobal interdependence is virtually irreversible.

6. This process brings about fundamental change to theorganisation of our economies. It creates new opportunities for allpeople around the globe, including the developing countries. It isinevitable, however, that in the context of this transformation, newpressures of adjustment arise in both the industrialised and thedeveloping world. Greater economic integration may not always bringthe anticipated benefits. Furthermore, as economic and financialinterdependence intensifies between countries, the risk of contagiontends to increase and can transform the failure of one actor into asystemic crisis. Global governance is key to ensuring that the positiveimpacts of globalisation are enhanced and its potentially negativeeffects are adequately balanced and mitigated.

Deepening interdependenceof the worldeconomy

Globalisationcreates opportunitiesand systemicrisks.

Worlwidepoverty

increases

An increase in inequality

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without continued support from the international community. Privatecapital flows, including foreign direct investment, today account forapproximately 80 - 90 percent of total resource flows to developingcountries. But the lion’s share of these private flows has so far bypassedthe poorest countries. According to the World Bank, all of sub-SaharanAfrica received only 1,2 percent of international financial flows todeveloping countries in 1998. These are the countries most vulnerableto diminishing aid budgets.

14. Based on the outcome of various UN conferences, theinternational community has set itself a number of international goalsfor global development, such as the objective to halve the number ofpeople living in extreme poverty by 2015 compared to 1990 levels.Current trends are not encouraging. In a world characterised by rapidpopulation growth in the South, the achievement of these goals canonly be realised if underpinned by appropriate international supportand a clear commitment to enhanced efforts for poverty reductionboth domestically and internationally. Better global governance isnecessary to identify priorities and to ensure that the challenge ofpoverty reduction is addressed effectively through a coherent andcomprehensive approach.

15. The interdependence among states in a globalised world hasdrawn attention to the need to protect the environment for the sake ofall nations. Scientific research indicates that our planet is increasinglythreatened by a severe degradation of the environment. Whilst in somerespects significant progress has been made in industrialised states, thedeveloping states show alarming signs of ecological deteriorationrather than advance. On the other hand, recent decades have witnessedgrowing awareness of these new environmental issues, which are trulyglobal in nature.

16. The global climate is changing as a consequence of the so-called greenhouse effect. The Framework Convention on ClimateChange and the Kyoto Protocol are the first, limited international stepsto reduce the emission of greenhouse gases on a worldwide scale.However, more effort is required and the final success of theseendeavours will depend on political will and the successful outcome offuture negotiations. The depletion of the ozone layer is another global

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10. Poverty is a multifaceted phenomenon that is bestcharacterised by a lack of freedom, which leads to a lack of access toopportunities: access to sufficient nutrition, to decent clothing andhousing, to basic health services and education, to transport andcommunication, to credit and insurance against natural disaster. TheHuman Development Report of the United Nations DevelopmentProgram (UNDP) notes that some 90 million school-age children inthe developing world are denied the chance to go to primary school.The consequences of the lack of access to adequate health servicescombined with poor disease prevention are particularly serious andseverely threat the development perspectives for many countries. Bythe end of 1999, nearly 34 million people were infected with HIV,23 million in Sub-Saharan Africa. Approximately 5 million die annuallyfrom the three major communicable diseases: AIDS/HIV,tuberculosis and malaria.

11. Access to markets also plays an important role: The potentialgains from liberalising trade for developing countries are estimated tobe far greater than today’s volume of official development aid. Onlyrecently have steps been taken by the European Union to open itsmarkets and abolish tariffs and quotas for the least developedcountries.

12. It is the prime responsibility of every country to ensuresound economic, social and environmental conditions and to put inplace domestic policies aimed at effective poverty reduction. Poordomestic management, overburdened and inefficient administrativesystems, outright corruption, and more generally the lack of the rule oflaw are among the reasons why in the past indigenous development hasfrequently remained disappointing, and why official development aidhas often not fulfilled its expectations.

13. Despite rising GNP levels in the industrialised countriesduring the 1990s, total official development aid (ODA) has continuedto decline. Far from reaching the objective of 0.7 percent of GNP,ODA has decreased over the last decades on average to a mere0.2 percent. While the growing role of private financial capital flowsrenders it imperative to ensure sound domestic policy conditions, themultitude of challenges faced by the poorest countries cannot be met

Lack of accesshas its roots ina lack of freedom

ODA has continued todecline

The emergenceof global

environmentalrisks

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better global governance. The efficiency of the internationalinstitutional family is severely hampered by the lack of coherentmandates and a sometimes-inadequate degree of complementarity andco-operation between individual institutions. A pertinent examplebecame evident during the November 1999 World TradeOrganisation (WTO) ministerial meeting in Seattle. On the one hand,there were far-reaching decisions taken by governments - in theframework of the twin Bretton Woods institutions (InternationalMonetary Fund (IMF) and the World Bank) - to reduce significantlythe debt of 41 heavily indebted poor countries. On the other hand,these same governments failed only two months later - through thestructure of the WTO - to launch a new trade round which would haveattempted to eliminate trade barriers to exports from developingcountries, which is a key precondition to any sustainable reduction ofpoverty. A failure to revive the trade talks in the near future wouldmake a mockery of the debt initiative.

20. In more general terms, the fragmented institutionalarchitecture of the international economic system makes it virtuallyimpossible to address the issue of interdependence in an effective andcoherent manner. Calls for closer co-operation between institutionsare not a new phenomenon, nor are complaints about overlap andduplication. They can be interpreted as symptoms of the lack of aneffective overarching framework to ensure coherence and acomplementary division of labour. One reason for this lack ofcoherence in dealing with global challenges can be found at thedomestic level, where different sections of national administrations arenot always aware of international engagements, which are theresponsibility of other departments. Therefore, if more coherence andconvergence is needed at the global level, this is also true at the nationallevel.

21. Global governance does not mean global government in theform of a centralised body that holds exclusive world power andcontrols global economic flows and information. Rather, it wouldprovide the capacity for effective and legitimate political decision-making at the global level through international institutions andstructures of co-operation, co-ordination and perhaps even sharedsovereignty. Global governance implies that nation states pay more

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environmental concern. The Convention for the Protection of theOzone Layer, together with the Montreal Protocol, has proved to beone of the most successful international environmental agreements.The conservation of biological diversity has also been recognised as acommon concern of humanity. So far, however, the Convention onBiological Diversity has not effectively provided protection forendangered species. Biological diversity is linked to the protection ofour forests, which are also endangered, but so far lack a coherentframework for international action. Furthermore, desertification anddrought have been recognised as problems with a global dimension.Finally, water quality degradation and overexploitation of marineresources threaten international waters. In many regions of the world,fresh drinking water is a scarce resource. A sustainable form of globalgovernance is urgently needed to solve global environmentalproblems.

17. Worldwide economic integration and new ways ofcommunication have brought people closer to one another. This isclearly a positive development but, in concrete terms, people aroundthe world sometimes fear the possible loss of their national identitythrough the demise of their culture and its value systems as they aresubmerged by global homogenisation. However, the maintenance ofa culture is dependent on the will and commitment of its people toprotect the customs, traditions, language and values against the tide ofone global cultural movement. Realistically, any system of globalgovernance can only provide limited help in this respect.

18. Though it should provide a means to defend culturaldiversity, global governance itself depends on a fundamental set ofvalues and principles that must be accepted universally. It is clear thatinternational institutions and national governments can supportcultures, but global institutions cannot generate them. A realistic formof global governance must be sustained by a fundamental set of valuesand principles, which people all around the world - from a great varietyof cultures and creeds - could accept.

19. It is evident that global problems need global solutions. Thepresent lack of coherence in international economic, social andenvironmental decision-making is a significant obstacle to more and

The fear of auniformglobal culture

Coherence and efficiency

Globalgovernance

means effectiveand legitimate

decision-making

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Part II

A set of core values and principles to make globalgovernance work

25. No real progress in global governance is possible without avalues system that is jointly embraced and respected. In this regard too,the social teaching of the Church offers its insights "to all men andwomen of good will". In the light of these teachings, the reality of thelife of the Church and the world unfolds. The Church offers her socialteaching as a definition of values and principles for a system of globalgovernance.

26. Human dignity is the core value of Christian social teaching,which must be respected and pursued in all human activity. This valuehas already been embraced by the full membership of the UnitedNations. In the preamble of the UN Charter we read: "We, the peopleof the United Nations, determined ... to reaffirm faith in fundamentalhuman rights, in the dignity and worth of the human person ... haveresolved to combine our efforts to accomplish these aims."Admittedly, universal respect for human dignity is far from being aglobal reality, but it is a goal, an orientation for global policies.

27. This innate dignity confers on human beings a set offundamental rights, as expressed in numerous human rightsdeclarations. Exercising one’s fundamental rights goes together withobligations towards others and the community as a whole, as has beenexpressed again, for example, in the preamble of the Charter ofFundamental Rights of the European Union. Enjoying one’sfundamental rights and assuming obligations towards others arenecessary if we wish to improve the human condition in both materialand spiritual ways.

28. Truthfulness is a clear obligation that derives from humandignity. Honesty is essential for the respect of human dignity andproduces real consequences for the economy and public life. Forinstance, there has been a multiplication of tax havens in various parts

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attention to the international impact of their domestic policies, respecttheir global obligations and accept the basic principles ofmultilateralism. International institutions themselves have to learn toco-operate in a more coherent and structured way. Global governancewill also require the emergence of public opinion with a more globalview, in order to promote, develop and enforce globally agreedbehaviour. Such global public opinion will be assisted in its formationby transnational businesses and labour unions, non-governmentalorganisations and private foundations, and by politicians. TheChurches and other world religions will also have to play their role.This development has to be supported by the media, their plurality andindependence being essential.

22. The 1991 papal encyclical Centesimus Annus outlines theCatholic Church’s thinking on global governance: "The increasinginternationalisation of the economy ought to be accompanied byeffective international agencies which will oversee and direct theeconomy to the common good, something that an individual State,even if it were the most powerful on earth, would not be in a positionto do. In order to achieve this result, it is necessary that in evaluatingthe consequences of their decisions, these agencies always givesufficient support and consideration to peoples and countries whichhave little weight in the international market, but which are burdenedby the most acute and desperate needs, and are thus more dependenton support for their development." (No. 58)

23. It will not be necessary to build a new system of institutionsand organisations from scratch to achieve global governance. Theexisting international system of organisations can be adapted.Improvement is required, not replacement. Major decision-makingwill still come from consensus among the nation states, which willcontinue to be the basic unit, at least for the foreseeable future, as theyadapt to new global changes.

24. Global governance is currently characterised at best as anintergovernmental as opposed to a supranational arrangement like theEuropean Union. The latter will perhaps inspire further advances overtime. However, even the current intergovernmentalism will notfunction without a basic set of core values and principles that areuniversally accepted, as discussed in the next section.

Human dignity is

at the core

23

the last century. It demonstrates that today, whether a country is largeor small, any crisis can become systemic through contagion in theglobalised market. Domestic economic policy therefore must, nowmore than ever, take into account its potential worldwide impact. Aduty of universal responsibility is incumbent upon all. All countries andnot just the strongest ones are responsible for the stability and qualityof world growth. This adds a new dimension to the duties required ofevery government in the management of its economy.

32. The responsibility of the world community: The worldcommunity as a whole must assume responsibility for putting in placea new ethically-based development paradigm, where the internationalrules for trade and investment, together with the integrity ofinternational monetary and financial management on the one handand policies to reduce poverty on the other hand, form a two-wayrelationship. All countries must be encouraged not only to seekbalanced books, but also to discover and realise what their globalresponsibilities imply. This of course includes obligations relating toprudence in domestic policies. In this context the monitoring by theInternational Monetary Fund (IMF) is particularly important. Povertyreduction will not be achieved without sound economic policy;equally, economic policy is not ultimately sustainable if patentinequality and poverty are left unaddressed. The necessary popularsupport for a stable economy and reform efforts cannot be guaranteedunless the whole population, including the poorest, is able to have itssay in the formulation of the policies adopted, and of course to benefitfrom them. This two-way relationship is part of an emerging and morecomprehensive development paradigm in which moral values are anintegral part. The new paradigm also tries to take into account differentcultural and social models and to follow a more pragmatic country-by-country approach.

33. The responsibility of all actors in society: By suggesting acontribution from all actors, the third aspect of responsibility becomesapparent. To care about the direction that the world community takesis no longer the sole responsibility of governments, politicians andinternational or regional organisations. Other actors must take part:companies, financial institutions, labour unions and non-governmental organisations, as well as Churches. Every person must

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of the globe over the last decades that have encouraged tax evasion.For the sake of the community it is vital that everyone pays their taxesin full; tax havens encourage cheating, which is unacceptable.

29. Allied to respect for personal human dignity, a sense ofresponsibility for the global common good is indispensable. Inparticular we have to face the challenges that are posed by themanagement of the world economy. Responsibility is a key aspect ofChristian anthropology and ethics. Pope Paul VI, in his 1971 ApostolicLetter Octogesima Adveniens, put it this way: "To take politicsseriously at its different levels – local, regional, national and world-wide– is to affirm the duty of man, of every man, to recognise the concretereality and the value of the freedom of choice that is offered to him toseek to bring about both the good of the city and of the nation and ofmankind" (No. 46). At decisive turning points in history, thisresponsibility has taken on a variety of forms and challenges.

30. The consequences of globalisation, the persistence ofpoverty, the growth of inequality and the increase of environmentalstress on a global scale call for a renewal of the human sense ofresponsibility in at least three respects:

• The responsibility of each country - large or small - for theworld at large;

• the responsibility of the world community to put in place anethically-grounded new development paradigm;

• the responsibility of all actors in society - and not justgovernments - to play their part in the direction the worldtakes to reach the above-mentioned goals and to espouse theidea of world citizenship

31. The responsibility of each country: Due to the intricaterelationships between countries in a globalised world, economic eventsin one country can have an unintentional effect elsewhere. Thus, whenThailand defaulted on its debt payments in 1997, the confidence ofglobal financial markets in developing economies was severely shaken.The Thailand crisis provoked a string of subsequent shocks in Korea,Indonesia, Russia and Brazil, even though they had limited or no realrelationship with the Thai economy. This is just one example of theseries of financial crises the world experienced during the last decade of

A sense ofresponsibilityfor the globalcommon good

Any financialcrisis can become systemic

A newtwo-way

developmentparadigm

Becomingglobal citizens

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37. Solidarity is not only about generosity. It calls for theappropriate participation of every person in society and of everycountry in the world economy. Even in pragmatic terms, it is nowwidely recognised that ownership of economic and social policy bypublic opinion is a necessary condition for their success. The slogan"Globalisation without marginalisation" can be restated as: globaljustice as participation. Social justice is essentially participation insociety. Justice as participation means strengthening a rule-basedworld system that allows for market participation.

38. Solidarity is central to organising and strengthening the veryfabric of a world economy, which is now ‘one’ in a real sense. Forindustrialised countries, global solidarity does not simply meansacrifice of the superfluous; it means dealing with vested interests andentrenched power structures, with life-styles and models ofconsumption. The change needed for genuine human developmentinvolves equally radical reforms in the South. In both the North andthe South, it is a matter "of orienting the instruments of socialorganisation according to an adequate notion of the common good inrelation to the whole human family" (Centesimus Annus, No. 58).

39. The principle of subsidiarity occupies an important placeamong the core principles for global governance. Unless we pay duerespect to this principle, which Catholic social teaching has longadvocated, organising change will be difficult if not impossible. In fact,a major factor behind the resistance to change stems from the fear thatnational sovereignty might be handed over to anonymous and distantinstitutions that are not accountable to any democratic control. AsPope John XXIII clearly states in his encyclical letter Pacem in Terris,it is "necessary that the relationship that exists between the world-widepublic authority and the public authority of individual nations begoverned by the same principle (of subsidiarity). This means that aworldwide public authority must tackle and solve problems of aneconomic, social, political or cultural character, which are posed by theuniversal common good. Indeed because of the vastness, complexityand urgency of those problems, the public authorities of the individualstates are not in a position to tackle them with any hope of a positivesolution. The worldwide public authority is not intended to reduce thesphere of action of the public authority of the individual states, much

24

play a role in the success of the newly emerging development paradigmand thus become a global citizen. In other words, what is needed is astronger sense of world citizenship.

34. The growing relevance of non-governmental organisations,which spearheaded many important initiatives in recent years, showsthat the concept of world citizenship is becoming more and more areality. However, NGOs should refine what has always been central totheir achievements: patient and non-violent efforts to seek the truth inorder to help public opinion become more aware and enlightened.NGOs must above all respect the democratic political process and actaccordingly.

35. Many people lack a sense of the universal. It has not beenpossible for them to integrate the impact of the rapid developments ineconomics, finance and information. Their sense of the universal hasbeen undone by these changes. They feel cut off from the universal,just as after the Treaty of Versailles in the 1920s Europeans did nothave a sense of identification with Europe. The potential of the 21stcentury will not come to fruition if a new generation of opinion leadersdoes not deliberately accept the responsibility for giving public opiniona global conscience. A new kind of citizenship must be created, onethat is not simply a vague cosmopolitanism, but a genuine citizenship,and rich in the appreciation of our affiliations at all levels: local,national, regional and global.

36. To combat poverty and to deal with widespread corruption,crime, money laundering and threats to the environment, moresolidarity is needed. The pursuit of solidarity is essential for effectiveglobal governance. When José Angel Gurria, the Finance Minister ofMexico, spoke about poverty at the outset of the Asian crisis as the"ultimate systemic threat", his reference to the health of the system ofglobal finance echoed the remarks of Pope John Paul II in his encyclicalletter Sollicitudo Rei Socialis: "Either development becomes shared incommon by every part of the world, or it undergoes a process ofregression even in zones marked by constant progress" (No. 17).While active solidarity is necessary to help the poorest, it also providessafeguards for the future generations of rich countries. Active solidarityis therefore also in the enlightened self-interest of the more wealthysocieties.

The search for a newgeneration ofopinion leaders

Solidarity is essential

Justice is participation

Solidarity requires

change in theNorth and

in the South

Subsidiarity as a core principle

27

42. If the above-mentioned values and principles are to becomethe foundation of a system of global governance, it will be a task thatmust involve everybody who can contribute, for it can offer a responseto the search for a sense of purpose in peoples’ lives, especially amongthe world’s youth. Vaclav Havel, the President of the Czech Republic,admirably suggested this in September 2000, when he delivered aspeech to Ministers of Finance, Central Bank Governors and otherbankers from around the world on the occasion of the annual meetingof the IMF and the World Bank in Prague. He said: "We often hearabout the need to restructure the economies of the developing or thepoorer countries and about the wealthier nations being duty-bound tohelp to accomplish this. If this is done in a sensitive manner against abackdrop of sound knowledge of the specific environment and itsunique interest and needs it is certainly a worthy and much neededeffort. But I deem it even more important that we should begin to alsothink about another restructuring - a restructuring of the entire systemof values which forms the basis of our civilisation today. This, indeed,is a common task for all. And I would even say that it is of greaterurgency for those who are better off in material terms..." There is littlechance that this will happen unless it becomes possible to connect thesevalues to something that lies beyond the horizon of immediatepersonal or group interest. So, how can this new value system beachieved without the recognition of the significance of the spiritualdimension of human existence?

43. Values and principles for global governance must beacceptable to non-believers and believers alike. They are not theexclusive concern of the world's religions. It is noteworthy to observethat the values and principles which Christians have been given byChristian social teaching - human dignity, responsibility, solidarity,global citizenship, justice, participation, subsidiarity, coherence,transparency and accountability - are values and principles shared bymany people of good will around the world. They can therefore offera basis for a more human system of global governance.

26

less to take its place. On the contrary, its purpose is to create, on aworld basis, an environment in which the public authorities of eachstate, its citizens and intermediate associations, can carry out theirtasks, fulfil their duties and exercise their rights with greater security"(No. 140-141).

40. The teaching of the Church on subsidiarity is formulated byconsidering "the way God acts in governing the world, which bearswitness to such great regard for human freedom" (Catechism of theCatholic Church, No. 1884). This suggests that the more we see theneed to consolidate or to grant new responsibilities to world bodies,the more it is also necessary to recognize the limits of theircontribution. It should be clearly understood that nothing can beaccomplished at the global level unless it has been taken up at thegrassroots level and supported by the entire institutional chain, inwhich non-governmental organisations can play an ever-greater role.Responsible citizenship at all levels is a key to the global challenges ofthe 21st century.

41. Greater coherence, transparency and accountability ofinternational organisations to the public should equally apply to thecore principles of global governance. Too often, internationalinstitutions are portrayed as unaccountable and technocratic. Thetruth is that they are in fact responsible and accountable to theirmember governments. The problem is that they are not perceived assuch. One reason for this lack of transparency is that governments havean interest in obfuscating their role in decision-making on theinternational level. On the one hand, they tend to refer to theimperative logic of the international regime to justify measures that areunpopular at home. On the other hand, they claim the positiveachievements for themselves. This contributes to an often-distortedperception of international organisations by the public. As a result,international organisations are often primary targets of public outrageabout the deplorable state of global living conditions and the focalpoint of fears about the consequences of unleashed globalisation. Inorder to enhance global governance, national governments must voicetheir unequivocal support for the positions taken in the executivebodies of these institutions.

Coherence,transparencyand accountability

Governmentsmust own theirinternationalinstitutions

Values and thesearch for

purpose

Values andspirituality

Rules shouldnot contradicteach other

29

47. Multinational companies have become key actors for globalgovernance. The authors of this report encourage efforts to introducesocial responsibility reports, which reflect the "social policy" of acompany, and board committees on ethical and social responsibility.The work of these committees could be directed by guidelines formultinational enterprises as drawn up by various institutions. Theguidelines published by the Organisation for Economic Co-operationand Development (OECD) and reviewed in 2000 by OECD ministersare an internationally agreed "code of conduct" that governmentsexpect domestic companies to apply wherever they operate. Therevised guidelines cover all areas of corporate social responsibility:human rights, the rejection of child labour and forced labour, socialrelations, environmental protection, consumer protection,transparency and disclosure, fight against corruption, transfer oftechnology, competition and taxation. National contact points incountries adhering to the guidelines (currently the 30 OECDcountries and Argentina, Brazil and Chile) are in charge of mediatingwhere specific problems arise. The Secretary General of the UnitedNations proposed in 1999 a ‘Global Compact’, based on nine keyprinciples, for consent by business partners. This promising approachmerits the close attention of the public. The initial success of these andother positive initiatives shows that complying with these obligationsis conceived more and more as serving the enlightened self-interest ofthe private economy. Christians have an imaginative and constructiverole to play here to broaden these initiatives in the light of Christiansocial teaching. It is particularly true with regard to internationalfinance, which has become predominantly private over the lastdecades. Under these new conditions, private banks and other privatefinancial institutions have been given the opportunity and theresponsibility to contribute to the production of essential publiccommon goods. This issue would require further reflection anddialogue with professionals and specialists.

48. It is desirable that not just multinationals but also small andmedium enterprises commit themselves on a voluntary basis toaccepting and promoting basic fundamental rights for their workers,rules for the environment and minimum safety standards for theirproducts. Even if the problem-solving potential of the marketeconomy is not underestimated, an exclusive reliance on "soft-law"

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Part III

Concrete steps towards global governance

44. One particular characteristic of the current and future globalgovernance system is the involvement of a series of responsible actorsinstead of one single body. Together these actors form a network thatcan drive global governance. For this reason, the following proposalsare addressed to a number of important actors.

The involvement of Churches and other religious communities, ofNGOs and private business, and of states and regional blocs inglobal governance

45. Churches and other religions can inform themselves andtheir followers about the global challenges and encourage them to takeup their responsibilities. The issues of global governance need to beincluded in educational and catechetical programmes. Churches couldmake the theme of global governance an issue for ecumenical andinter-religious dialogue. Within the Catholic Church, for example, thenetwork of universities, ‘Justice and Peace’ Commissions and"Semaines sociales" could be a resource for use according to theiroriginal mandates for monitoring and analysing developments. Theycould then respond as necessary with appropriate suggestions andideas.

46. On the international scene, non-governmentalorganisations will continue to play an important role. They can echoand develop proposals. Currently they monitor developments at theinternational and state level and concentrate on one single issue. Theyhave a particular capacity within the general political arena. Thisleverage permits them to influence the way decisions are formed atinternational level. However, the principles of transparency andaccountability must be part of their operation. It is vital that theyrespect the role of democratic institutions so that they are a positiveinfluence on society. Perhaps the time is right for them to play a moreformal role in international public life; this is an issue for further debateand discussion.

The contribution of Churchesand other religious communities

NGO's play animportant role

The UNGlobal

Compact

Efforts to implicate

private business

31

Changes at the level of international institutions

51. One of the priorities for change at the global level is the needto review the mandates of existing international organisations withinthe perspective of the search for the universal common good, and witha view to identifying sources of conflicting objectives, barriers tocoherent behaviour and gaps in the institutional architecture. Asexamples of this review of mandates, this report calls for a new roundof multilateral negotiations in the World Trade Organisation (WTO),a strengthening of the International Labour Organisation (ILO) andthe creation of a World Environmental Organisation (WEO). It alsooutlines a mechanism to provide the basic framework the systemrequires.

52. It is not necessary to reopen here the discussion about thechanges needed in the role, instruments and governance ofinternational financial institutions such as the International MonetaryFund and the World Bank. As the Mexican and Asian crises during the1990s revealed many deficiencies in the international financial system,and as the slow progress in the fight against poverty showed the needto reduce the debt burden of the poorest countries, these institutionshave undertaken major reforms during the second half of the 1990s.Several of them are noteworthy:

• the strengthening of the Highly Indebted Poor Countries(HIPC) Initiative, which increased the amount, speed andbreadth of debt relief on the basis of programmes that focusedon human development spending, with a significant emphasison ownership by the people;

• the effort to promote increased transparency andaccountability in the system and the institutions;

• the importance given to the fight against corruption andmoney laundering;

• the stronger supervision of financial institutions and theemphasis on technical assistance for institution-building inorder to assist developing countries in their efforts to adapttheir own governance to new world standards.

While much remains to be done and progress must beencouraged, the direction for further progress is clear. Political will isnecessary to determine the next steps.

30

like codes of conduct and guidelines is not sufficient. If necessary,governments may have to consider legislation and regulation in theseareas.

49. The main responsibility for global governance rests with thenation states, whose sovereignty has to be respected. Each governmentshould express its willingness to contribute to the construction of asystem of global governance and decide on the best means to organiseitself in respect of this commitment. National parliaments need to bemore closely associated with these issues of global governance. Eachstate, provided it does everything possible to put its own house inorder, as suggested in paragraph 12, should be able to count on thesolidarity of the international community in order to adapt itsinstitutions to the challenges of growing global interdependence.

50. At the end of the year 2000, 200 regional trade groupingsexisted worldwide, compared to 50 in 1990. This increasedemonstrates that regional agreements between countries have be-come an important instrument to deal with the challenges ofglobalisation. They must therefore be included in a system of globalgovernance, but they remain complementary to internationalinstitutions with a global outreach; they cannot replace them. Amongthe various examples of regional agreements, the European Union isthe most complete. The sharing of sovereignty in the European Unionhas reached a degree that is unknown in other places of the world, eventhough its member states share a long history of violence and war. Itshould be noted that the agreed policies of the European Union reflectmajority or unanimous decisions by currently fifteen member states.For this reason, the EU can represent more effectively a concern for theuniversal common good. One of the founding fathers of the EuropeanUnion, Jean Monnet, considered that, "the community itself is only astage towards forms of organisation for the world of tomorrow". TheEuropean Union therefore bears a particular responsibility forpromoting the cause of qualitative global governance. To the authorsof this report it seems evident that the European Union and itsmember states in particular must become champions of reform forglobal governance, based upon their unique historical experience offighting wars, of making peace and of co-operating at anunprecedented high level.

Responsibilityof nation states

Regionalgroupings haveproliferated.

EU bears aparticular responsibility

33

change. However, in 2000 only US$178 billion out of US$1.1 trillionof FDI went to developing countries; and the least developed countriesaccounted for a meagre US$4.5 billion. This lack of investment ispartly due to the lack of a proper legal framework for the investor inpoor countries. That is why the need for an international investmentregime cannot be disputed. Discussing this issue within the frameworkof the WTO, and perhaps agreeing on basic principles for the treatmentof foreign direct investment, would provide the opportunity to revisitthe issue after earlier negotiations in the OECD failed. The largemembership of the WTO would also allow an inclusive debate andallow time on the agenda for the needs of developing countries.

56. The need to establish a global competition/anti-trust bodythat works either under the auspices of the WTO or independentlycould also be examined in the course of a new round, althoughprogress in this complex area can be expected to be slow. Priorityshould be given to an agreement on the principles needed forcompetition rules in the main trading blocs and to support developingcountries in their efforts to shape domestic anti-trust legislation andadministration.

57. The final agreement of a new trade round should include areference to the declaration of the International Labour Organisation(ILO) on fundamental rights at work, dealing with freedom ofassociation and collective bargaining, non-discrimination, theprohibition of forced labour and extreme cases of child labour. WTOmembers should pledge their support to strengthening the ILO inorder to enable it to promote and monitor more effectively the agreedlabour standards.

58. In recent years the WTO has become a cornerstone of theinternational system. This is mainly due to the sanctions mechanism,which gives the organisation real clout where member states do notfollow the rules. However, there is a risk of over-stretching the disputesettlement procedures. Negotiations are a better way of resolvingdisputes. Whilst fully accepting the need for (and the right to)sustainable development, protectionism through the use ofenvironmental and social standards has to be avoided.

32

53. One of the most important lacunas in the field of globalgovernance is a new comprehensive trade round at the WTO. TheWTO is a common institutional framework providing for tradenegotiations amongst its 141 members (at May 31, 2001). Since thelast successful round, the Uruguay Round, WTO rules stretch everfurther beyond traditional ‘border issues’ like tariffs and quotas. Theimportant agreement on trade-related intellectual property rights(TRIPs) and an agreement on agriculture are just two examples of atendency that makes sense in a globalised economy, although the trendto deal more and more with "internal trade barriers" has added a lot ofcomplexity to the system. However, developing countries havecomplained about the unbalanced relationship between the results ofthe negotiations, their application and the ultimate benefits for poorcountries. The United States and the European Union in particular areaccused by developing countries of doing too little to open theirmarkets. This was an important factor in the breakdown at the lastministerial meeting in Seattle.

54. Another attempt to launch a new trade round, for which thename "Development Round" has been proposed, will be made at thenext ministerial meeting in Doha, Qatar. The authors of this reportwish to express their support for a comprehensive round of multilateralnegotiations. While concentrating their remarks on the institutionalissues, they would like to mention the importance they attach to severalother aspects of this broad negotiation. In its contribution, theEuropean Union should show its willingness to review certain aspectsof its own policies – including the Common Agricultural Policy, whichis seen by many countries in the rest of the world as questionable froma global perspective. The merits of holding negotiations in a "singleundertaking" - which means that no result of the negotiations isfinalised until an agreement has been reached on all issues on theagenda - should be reconciled with the need to provide for an "earlyharvesting" of the initiatives to abolish as soon as possible tariffs onexports from the poorest countries.

55. Rules for the treatment of foreign direct investment are animportant issue. Foreign direct investment (FDI) is a highly importantmeans for developing countries to achieve far-reaching economic

A new broad world trade roundis needed

A frameworkfor foreign investment

Discuss labourstandards

The risk ofover-strech

35

different multilateral agreements have today led to the proliferation ofenvironmental institutions for individual conventions located indifferent parts of the world. Their mandates are often not clearlydelineated, which leads to overlapping responsibilities and unnecessaryduplications.

62. This fragmentation highlights the need for a worldenvironment institution to co-ordinate the existing efforts in a moreeffective and coherent way. Among the international institutionsdealing with environmental problems, the United NationsEnvironment Programme (UNEP) has an especially importantmandate. UNEP was intended to be a "small secretariat to serve as afocal point for environmental action" and to "co-ordinateenvironmental programmes within the United Nations system"(UNGA Resolution 2997 (XXVII), 15 December 1972). In practice,its catalytic effect has remained weak due to the lack of means andpower needed for such an important and difficult task. There istherefore at the moment no global environmental institution on theinternational level with the mandate and means to articulate globalenvironmental concerns effectively. This clear institutional weakness ofthe international environmental pillar warrants urgent attentionthrough the comprehensive reform of UNEP or, preferably, thecreation of a new world environment organisation (WEO). A worldenvironment organisation could play an important role in serving as aneffective global voice in defence of the environment and in monitoringinternational environmental developments. It could be empowered toassess progress and deficiencies in implementing internationalenvironmental agreements.

63. Furthermore, a WEO could co-ordinate the internationalefforts to protect the environment and promote coherent andconsistent decisions. It should have the mandate and means toarticulate environmental concerns in an audible, credible and effectivemanner. To fulfil its tasks, it would need the right infrastructure interms of personnel, funding and location. In preparation fornegotiations on such a new institution, more political leadership and abroader debate on the responsibilities of all states and the need torespect development priorities will be required. Developing countriesneed financial and technological assistance in order to be able todevelop sustainably and to integrate environmental aspects into their

34

59. The International Labour Organisation is one of the oldestinternational institutions, with 175 member countries. Its basic aim isto improve working conditions around the world and create theconditions for decent work. In order to reach this objective 183international conventions have been approved, setting out minimumstandards for working conditions and employment. Five conventionsconcerning the freedom of association and collective bargaining,non-discrimination in the work place, and the prohibition of forcedand child labour have been identified as particularly important. Thecapacity of the ILO to monitor these core labour standards must bestrengthened and needs to be recognised by all of its member states.

60. A particular problem concerns the enforcement of the corelabour standards. In November 2000, for the first time in its history,the ILO went beyond its usual practice of simply naming offendersagainst conventions. In the case of the continued use of forced labourby Burma/Myanmar (the military regime is said to use up to 800,000forced labourers on public work and army projects), it asked itstripartite constituents and other international organisations to reviewtheir relations with Burma/Myanmar and to consider takingappropriate measures. So far, however, no state - even among thosewho expressed support for the idea of trade sanctions - has availed itselfof the possibility thus offered. One reason for passivity may be the factthat Burma is also a member of WTO: trade sanctions againstBurma/Myanmar, for example on exports of textiles, could bechallenged on the basis of WTO–rules with a result that could set aprecedent either way. Another possible reason is that the action takenby the ILO has proved quite effective even in the absence of tradesanctions; in leading the authorities firstly to adopt legislative changeand secondly to allow, for the first time, an ILO high-level team toassess freely the real situation of forced labour in the country. Thisdevelopment shows that the capacity of the ILO to define and monitorcore labour standards can be further reinforced. Migration is anotherarea where the ILO will have to play a more important role in thefuture, particularly regarding the fate of migrant workers.

61. Given global environmental problems, the question hasbeen raised as to whether the international institutional architecturefor the protection of the environment is still adequate. A number of

Strenghten theILO

A multitude ofmultinationalenvironmental

agreements

Create aWorld

EnvironmentOrganisation

37

dealing with issues of an economic or financial nature. Under thissystem, all member countries participate in the election of theirdirectors, the five members with the largest quotas appointing theirrepresentatives; the other member countries electing the other 19directors in the framework of agreed regional constituencies. Thisformula would have the additional merit of providing the GlobalGovernance Group (3G) with full legitimacy to give political guidanceto the institutions responsible for key aspects of development issues.

67. The Global Governance Group would hold an annualsummit on economic, social and environmental issues and makedecisions on the basis of consensus . It would function as a watchdogand assure a minimum of coherence, co-ordination and arbitrationamong international institutions. Its members would have to tacklemajor problems and issues. They should be invited to provideresponses to key issues on which insufficient progress has been made sofar: the strengthening of the ILO in order to enable it to advocatesocial concerns in the context of globalisation; the construction of aninstitutional pillar for global environmental risks on the basis ofexisting international conventions and UNEP; the resolution ofpending problems in the field of foreign direct investment and globalcompetition policy. One of the most urgent points they could act on isfinancial crime and tax evasion at global level, through co-ordinationof different initiatives against money laundering and tax evasion. Theycould also devise strategies to combat worldwide corruption througha better implementation of the OECD convention on bribery.

68. At their summits, the heads of government of the GlobalGovernance Group would be joined by the Secretary General of theUnited Nations and the General Directors of the IMF, World Bank,WTO, ILO and the new World Environment Organisation (WEO).The various directors would together prepare the agenda of thesummit. The national governments would be part of the preparatorywork through a Sherpa system (a network of personal representativesof the heads of government), similar to that of the G7.

36

national development strategies. A new dialogue between North andSouth about the need to protect the environment and the financial andtechnological preconditions necessary for developing states to respondeffectively must be opened.

64. Finally, the relation between environmental and trade policyneeds to be addressed. Environmental rules and trade and investmentrules have to be developed coherently. A World EnvironmentOrganisation with a special mandate and specific knowledge and meanscould serve as a counterweight to the WTO, and could also allow theWTO to focus on those issues within its own specific mandate.

The key stone: A Global Governance Group (3G)

65. The lack of coherence and the deficit in inter-institutionalarbitration between international organisations needs to beconfronted. A framework should be created in which leaders, at thehighest political level, could define strategies on issues whosemultifaceted aspects are currently dealt with in different bodiesgoverned by officials reporting to different departments in theirnational administrations. The challenge of addressing and deciding onkey issues and value choices ultimately falls upon heads of government.Their attention to horizontal issues is essential for enhancingcoherence of the global economic system.

66. All countries must be linked in a structure that is bothsufficiently restricted and legitimate. The authors of this reporttherefore recommend complementing the current G7/G8 mechanismand creating a Global Governance Group (3G), made up for instanceof the 24 heads of governments that have executive directors on theboards of the IMF and the World Bank, as provided for in their Articlesof Agreement. Whilst several other systems of representation could beimagined, this formula for a selection mechanism could be adopted, atleast on a temporary basis, as it has the advantage of being based oninternational treaties, has been tested and is respected at least for

Environmentand trade

Heads of government must beinvolved

3G = GlobalGovernanceGroup

A GlobalGovernance

Group to assure

coherence andco-ordination

39

Annex

COMECE ad-hoc Group on Global Governance*

Members of the group

Michel Camdessus, former Managing Director of the InternationalMonetary Fund, Paris (chairman of the group)Rudolf Dolzer, Professor for International Law, former Director General inthe Office of the Federal Chancellor, BonnMichel Hansenne, Member of the European Parliament, former DirectorGeneral of the International Labour Organisation, BrusselsOnno Ruding, Vice-Chairman of Citibank, President of UNIAPAC andformer Dutch Minister of Finance, BrusselsPeter Sutherland, Chairman of BP plc, former European Commissionerand former Director General of GATT and the WTO, LondonPaul Trân van Thinh, former chief negotiator of the European Communityat the GATT/WTO, GenevaSimona Beretta, Professor for international economic and financial organ-isations, MilanFranz Eckert, Adviser for European Integration, secretariat of the AustrianBishops' Conference, Vienna Reinhard Felke, Administrator in the European Commission, BrusselsFlaminia Giovanelli, Pontifical Council for Justice and Peace, RomeCharlotte Kreuter-Kirchhof, Assistant teacher for International Law,BonnStefan Lunte, Assistant Secretary General of COMECE, Brussels (secretaryof the group)Matthias Meyer, Head of the Public Policy Department in the secretariat ofthe German Bishops’ Conference, BonnNoël Treanor, Secretary General of COMECE, Brussels

* The views expressed in the text are personal and should not be attributedto institutions or companies to whom members of the group are related.

38

Conclusion69. This report has developed the argument for a stronger

system of global governance by laying a foundation based on a set ofcore values and principles, by activating a network of actors that couldcreate its framework, by strengthening and rebuilding certaininstitutional pillars and by putting in place the keystone in form of aGlobal Governance Group (3G). The system of global governance hasto address the two main challenges of our times: to preserve the envi-ronment for the generations that will follow us and to offer more andbetter opportunities to the poorest.

Better opportunities for thepoorest

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