Confederation of Finnish Industry and Employers
Globalisation– views of the Nordic business community
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Globalisation
– views of the Nordic business community
N O V E M B E R 2 0 0 2
Confederation of Finnish Industry and Employers
The Nordic countries have a long tradition of openness towardsthe outside world. This tradition is the most important explanationof our strong economic development. We are convinced that futureeconomic prosperity will depend heavily on our willingness toparticipate in the increasingly open and global economy. TheNordic business community thus shares a clear commitment tofree trade, a market economy, the rule of law and democracy.
Recently we have seen growing concerns about globalisation,trade and the lack of development. We welcome a debate aboutglobalisation and the transformation of our societies. The debateon trade and development spans widely opposing views of anti-globalists and liberal free traders. The manifestations of the anti-globalists have attracted massive media attention. Some scepticssee trade merely as a vehicle used by rich countries and trans-national corporations to exploit poor nations. However, an over-whelming majority of both scientists and politicians have come tosee trade and investment as the most important instrument forincome generation and the spreading technology that enhancesdevelopment. Indeed, the increase in trade has led to a substantialglobal increase in living standards as clearly demonstrated byresearch. Most academics, therefore, underline the positive linksbetween free trade and development.
UN Secretary General Kofi Annan shares this view and haspointed out that “the main losers in today's very unequal worldare not those who are too much exposed to globalisation. They arethose who have been left out.”
The world is a much better place today than it was yesterday.But there are vast problems left to be dealt with. We believe weshould strengthen global institutions and rules. We are concernedabout poverty and underdevelopment, pollution and climatechange, corruption and social injustice, unemployment and thelack of fundamental human rights. We believe that the market isthe most important wealth creating mechanism available. Themain challenge before us is how the benefits of globalisation shouldalso become available to those left out.
Preface
3
Published by:
Confederation of Danish Industries
Confederation of Finnish Industry and Employers
The Confederation of Icelandic Employers
The Federation of Icelandic Industries
The Confederation of Norwegian Business and Industry
Confederation of Swedish Enterprise
Printed by: Kailow Graphic
ISBN 87-7353-441-2
2000.11.02
The Nordic confederations of industry and employers believethat international society has to address and find solutions to fourmajor, contemporary global challenges:
• How to build a free and more equitable global market• How to reduce poverty• How to create a more sustainable development • How the companies best can meet these challenges
in the global market
We would like to present the Nordic Confederations’ views on theglobal challenges we are currently facing.
Contents
Executive summary 7
A free and equitable global market 11
Open markets matter 11
Barriers to trade 12
Capital movements 13
Poverty reduction 15
Better national policies 15
Open trade 16
Investment 17
Official development aid 17
Sustainable development 19
The global market and corporate social responsibility (CSR) 22
The Nordic countries at a glance 26
The Nordic confederations of industry and employers 28
November 2002
Finn Bergesen jr, The Confederation of Norwegian Business and Industry
Hans Skov Christensen, Confederation of Danish Industries
Ari Edwald, The Confederation of Icelandic Employers
Sveinn Hannesson, The Federation of Icelandic Industries
Johannes Koroma, Confederation of Finnish Industry and Employers
Göran Tunhammar, Confederation of Swedish Enterprise
Executive summary
7
Instead, the financial marketsshould be made even more inter-national than they are today. All countries should successivelyopen their markets to capitalflows to and from abroad. At thesame time financial institutionsshould be strengthened andsound regulations be imple-mented. This will empowerthem to manage the risks towhich they are exposed.
Poverty reduction
� Open markets are the bestmeans of creating economicdevelopment. Countries withmore open trade and investmenthave experienced highereconomic growth than countrieswith less open trade.
� The developing countries musttake the lead themselves insolving the poverty problem bypursuing market orientednational policies.
� Efficient development aid, canmake a positive contribution todevelopment. Private sectorinvolvement should bestrengthened.
The Nordic confederations’ opinion:
Free and equitable global market
� Protectionism and tradebarriers should be substantiallyreduced as barriers to tradeprevent economic dynamismand growth and increasepoverty.
� The industrialised countriesshould eliminate all industrialtariffs by 2010 within theframework of the WTOnegotiations.
� The developing countries shouldmove towards a more open andliberal trade regime.
� Within the WTO negotiations,the western world should reducedomestic agricultural support,reduce all types of export sub-sides with a view to phasingthem out, and reduce tariffs onagricultural productssubstantially.
� The way to solve problems posedby financial crises is not toimpede access to foreign capital.
� Democracy and the marketeconomy are conditions thatmust be fulfilled in order fordevelopment to be madesustainable.
� Free trade helps to ensure thatthe world's joint resources areused optimally, and is thus akey contribution to sustainabledevelopment.
� Governments bear responsibilityfor global environmentalprotection. Legislation andstandard regulations must beimplemented on a global scale.
� The Kyoto-protocol should beratified and implementedrapidly and efficiently.
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� The developed countries shouldgive better market access forproducts and services from thedeveloping countries in theongoing WTO negotiations,particularly in agriculture,textile and clothing.
� A decision to negotiate a multil-ateral agreement on investmentat the next WTO Ministerialconference in September 2003 isneeded. This can stimulate moreinvestment to developingcountries.
Sustainable development
� The international co-operationfor sustainable developmentmust be strengthened.
� For development to besustainable, economic factorsmust be taken into account aswell as environmental and socialones. Business and industrymust be profitable in the longterm to permit investments tobe made, new technologyintroduced and sustainablegrowth achieved.
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0
1
2
3
4
5
6
7
8
Pct. ofglobal export,
2000
Pct. oftotal OECDFDI-inflow,1995-1999
Pct. oftotal OECDFDI-outflow,1995-1999
Pct. ofglobal GDP,
2000
Nordic economies in a global context
Source:World Bank, WorldDevelopmentIndicators and OECD,International DirectInvestment, StatisticsYearbook
� Individual businesses mustdecide for themselves, on thebasis of their own operatingconditions, what forms theirwork on these issues should take;whether to adopt specific codes,reporting models, accountingstandards and the suchlike inthe area of CSR; and whetherthere is any reason or need toformulate their own company-specific CSR policies.
The global market andCorporate Social Responsibility
� Support is given to the value-based platform that findsexpression in the content of the Global Compact.
� Nordic companies are expectedto respect human rights, thebasic principles of labour lawand fundamental environmentalstandards wherever theyoperate in the world.
A free and equitable global market
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If trade is good for development, bar-riers to trade are bad for develop-ment. This is an issue that the mem-bers of the World Trade Organi-sation (WTO) have agreed to addressin the ongoing WTO trade negotia-tions.
Free trade gives equal opportuni-ties, better access to technology,enhances competition, improvesefficiency and generally increasesthe dynamics of the economy. Pro-tection and lack of trade may saveuncompetitive companies andsectors for a while, but it generallylowers competitiveness, with severelong-term consequences for theeconomy and society .
Open markets matterThe Nordic countries are all nowdemocracies with advanced know-ledge-based industrial complexesand with living standards that areamong the highest in the world.However, not more than 150 years
ago, all were predominantly agri-culturally-based developing coun-tries. In hindsight, this has been aremarkable transformation.
The developing countries of themodern era must go through thismodernisation process even fasterthan was the case in the Nordicregion. This might seem to be animpossible challenge. However, webelieve this might be possible if theyare able to enjoy sufficient assis-tance and support to build on bestpractices, provide openness and pur-sue sound governmental policies.
Open markets rest on some corefoundations. One is the strong pref-erence of people for more freedom ofchoice. A second foundation is basedon the old principle of comparativeadvantage; countries, like indivi-duals, prosper when they use theirresources – natural, human, indu-strial and financial – to concentrateon what they do well relative toothers.
10
Scandinavian economies are more open than world average
Source:World Bank, World Development Indicators
0
10
20
30
40
50
Export's share ofGDP, % 2000
Procent
Import's share ogGDP, % 1999
Scandinavia
World
The markets must work for all and not just for thedeveloped world. Today there are too many barriers.Business should continue to play a role in building a freerand more equitable global market. Our aim is to see thecreation of a global market in which trade is less distortedby subsidies, tariffs and non-tariff barriers.
than all aid provided to the develop-ing world.
The ability of the developingcountries to export agriculturalgoods is also limited by tradebarriers. Agricultural tariffs arevery high throughout the OECD-area. Average bound tariffs onagricultural products are at over 40percent, compared to four percentfor manufactured products. As agri-cultural development is essential foroverall development these issues areconsidered to be particularly im-portant. Equally there are manybarriers to trade in textiles, whichare harmful to the developing coun-tries
Capital movementsInternational capital movementshave increased sharply since themid-1970s. The expansion of capitalmovements particularly took placeat the end of the 1980s, followingderegulation and liberalisation.
With the liberalisation of capitalmarkets, abundant savings in the developed world have beeninvested in developing countries andemerging markets. This has had theeffect of radically improving thescope for conducting business oper-ations in various parts of the world.
Paradoxically, as the global finan-cial market has expanded, the num-ber of financial crises affecting inter-national capital flows has risen.Since information is more accessiblefinancial problems are spread morerapidly between countries. Globa-lisation of financial markets has alsomeant a growing interdependenceand countries experience impactsfrom events in remote economies.
The reasons for crisis have beencomplex and mixed. However, itseems that countries with mis-guided economic policies, inade-quate risk management in the bank-ing system, widespread corruption,high inflation and over-expansive
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The incomes for countries will behigher if individuals and companiesare free to engage in specialisationand trade. Specialisation allowsboth businesses and individuals todeploy their relative strengths,abilities and expertise. Freedom ofexchange through trade and invest-ment lowers prices, broadens therange of quality goods and servicesavailable to companies and con-sumers.
Trade and investment liberalisa-tion provides powerful incentives tolocal producers to lift their perfor-mance by improving productiontechniques and by using researchand development to generate inno-vations that will enhance their com-petitiveness. Openness allows coun-tries to absorb technologies devel-oped in other countries at a fasterrate and thus to grow more rapidlythan countries that are less open.
Moreover open economies are keyfactors in securing peace and stabil-ity between countries. Economiesthat are interdependent and basedon political and economic coopera-tion are less vulnerable to politicalimbalance.
Barriers to tradeThe link between trade and devel-opment is positive. More trade givesmore economic growth. This is true
for both developed and developingcountries.
The developing countries gener-ally have high barriers to trade.These are very harmful to develop-ment, but at the same time verydifficult to remove. Many Africancountries fear competition fromSouth and East Asian countries formanufactured products. Similarly,many African governments relyheavily on customs duties to financestate budgets. For these reasonsmany developing countries arereluctant to remove barriers totrade.
On top of this, developing coun-tries also suffer from a lack of freeand fair access to the markets of therich nations, who impose tariffs andquotas to protect their owneconomies – in particular in the agri-culture, textile and clothing indu-stries.
In these areas, many developingcountries are actually very compe-titive and would benefit substan-tially from more free trade. Cur-rently the agricultural sector indeveloping countries faces unfaircompetition because their marketsare inundated with subsidised prod-ucts from the EU and other richnations. It has been estimated thatthe support to agriculture in theOECD-countries is six times higher
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Roughly speaking, 80 percent of theworld is poor, 10 percent middleincome and 10 percent rich. This isnot sustainable. More than one bil-lion people live in extreme poverty.Even more people live without fun-damental human rights.
Despite these tremendous chal-lenges, the situation in general isgetting better, not worse. All in allpeople live longer, are in betterhealth, have more education andearn more today than in any otherperiod in human history. However,progress has varied considerably,and there are still very largeregional differences. Six in tenAsians were extremely poor in 1975,but the figure is less than two in tentoday. Southern Asia and sub-Saha-ran Africa unfortunately lag farbehind other regions.
The business case for povertyreduction is straightforward. Busi-ness cannot succeed in societies thatfail.
Better national policiesGood governance is comprised ofgood national institutions and soundpolicies. Many countries have notyet been able to establish a stablemarket economy and the insti-tutions this entails. Institutions arerequired to ensure legal protectionfor individuals and enterprises.Countries need to have democracyand rule of law, effective judicialsystems to protect property rights,reliability of contracts, lack ofcorruption, offer reasonable tradeterms, have competition rules, fairaccounting systems and predictablegovernment interventions.
Poverty reduction
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In the views of the Nordic Confederations:
• Protectionism and trade barriers should be substantiallyreduced as barriers to trade prevent economic dynamicsand growth and increase poverty.
• The industrialised countries should eliminate all indu-strial tariffs by 2010 within the framework of the WTOnegotiations.
• The developing countries should move towards a moreopen and liberal trade regime.
• Within the WTO negotiations, the western world sho-uld reduce domestic support to agriculture, reduce,with the view of phasing out, all types of export subsi-des and reduce tariffs on agricultural products substan-tially.
• The way to solve problems posed by financial crises isnot to impede access to foreign capital. Instead, thefinancial markets should be made even more internati-onal than they are today. All countries should successi-vely open their markets to capital flows to and fromabroad. At the same time financial institutions shouldbe strengthened and sound regulations implemented.This will empower them to manage the risks to whichthey are exposed.
monetary policy have been mostexposed. The costs of bad policieshave risen in a global economy.
On the other hand, the scope forsound and responsible economicpolicy has increased and the rewardfor such policy is higher than ever.Nowadays countries that pursue
good policies, strengthen their insti-tutions and encourage long-termgrowth have better prospects ofobtaining low-cost loans for theirinvestments. Since creditors con-stantly keep an eye on how themoney is used, good governance isencouraged.
Combating poverty is the most important and challengingissue in the world. The United Nations has the declaredobjective of reducing poverty by 50 percent by the year2015. This is an ambitious goal, which we believe businesscan play a key role in fulfilling. Fighting poverty in theworld needs a policy mix of better national policies, moreopen trade and investment policies and better developmentaid. Wrong national policies that are unfriendly to businessand commerce, will not help the poor countries, they onlycontribute to more marginalisation and exclusion.
advantage. Protection shrinks thedomestic economy. The Nordic expe-rience is that open domestic marketis a source of competitive strength.
InvestmentThe developing countries need moreinvestment. Foreign direct invest-ment (FDI) is currently a chief inte-grating force in the world economy.More open economies enjoy higherrates of private investment.
Investments bring capital and jobsas well as lasting managerial skills,access to knowledge and necessarytechnology. Indeed, foreign compa-nies typically pay better salaries andbenefits, offer higher productivityand have much better environmentalrecords than domestic companies indeveloping countries.
The lesson is striking. Developingcountries that have oriented theireconomies towards dynamic parti-cipation in world trade, investmentand technology flows, have drama-tically improved their living stan-dards and have been able to fightpoverty. Poverty has prevailed incountries that have been less com-mitted to market forces and thosewho have not sufficiently encouragedinternational trade and investment.
The bulk of foreign direct invest-ment (FDI) is concentrated in deve-loped countries, but a growing share
is accounted for by developing coun-tries, both as homes and as hosts. Theproblem is however that the leastdeveloped countries receive only asmall fraction of total FDI to deve-loping countries. The share of FDIinflows by non-OECD countriesincreased from 20 percent to 35 per-cent between 1990-1995. The FDIinflows to the developing countries inthe last 10 years has been greaterthan the total amount of developingaid in the last 50 years. Private cap-ital investment is therefore veryimportant for the economic develop-ment of many of the poorer countries.
Many bilateral investment agree-ments (BITs) have been established,especially during the 1990s in orderto promote and protect foreigninvestment. By the end of 2000 thenumber of BITs have increased toabout 1940 agreements. There is nomultilateral agreement on invest-ment. Hence, multilateral invest-ment negotiations should be part ofthe WTO negotiations after the nextMinisterial Conference in 2003.
Official development aidOfficial aid programs to the devel-oping countries have existed for thepast 50 years. The effects of theseprograms are not impressive. How-ever, developing aid targeted andaimed at promoting efficient insti-
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During the past three decades,many poor countries have expe-rienced rapid economic developmentafter adopting more liberal economicpolicies. Countries with more opentrade and investment policiesattract more foreign direct invest-ments and have higher growth rates,and thus higher living standards forthe people than countries that areless open to trade and investment.
Since the 1950’s the economicdevelopment of nations with openeconomies has been significantlybetter than nations with closedtrade regime. An illustrative exam-ple of this is the six Asian tigers com-pared with the African countries. In1948 the six Asian tigers exportedapproximately three per cent of theworld’s export while Africa exportedapproximately eight per cent. In1999 the picture has reversed andthe Asian tiger contributes to tenpercent of world export while Africacontributes to only two per cent.
Open tradeOpenness to trade is a key factor indevelopment. Developing countries
share of world trade climbed fromabout 20 percent in the 1970s toroughly 33 percent in 2001. Moreopen markets and more trade areneeded to further this development.Increased trade can develop thenational industry’s competitive-ness and increase the incomes tothe society and thus create greaterprosperity. We believe that govern-ments that make it hard for busi-ness to do business, and govern-ments that try to take the place ofbusiness, keep their people poor.Openness promotes economicdevelopment, welfare, democracyand peace.
Many developing countriesencounter serious trade barriers fortheir industrial and agriculturalproducts alike. Better market accesson the industrialised countries mar-kets must be achieved through theongoing WTO-negotiations. Theoften high barriers to trade in devel-oping countries must also be reducedso more trade can take place betweendeveloping countries. Acountry mustalso be open towards imports, notbelieve that more exports are the only
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The process towards a more sustain-able development is urgent andimprovement is needed. There arehowever positive signs. The fact isthat there are constant improve-ments in the supply of clean water,housing standards, access to elec-tricity and medical care. There aremany encouraging signs in globaldevelopment. Today, average lifeexpectancy is rising, infant mortalityis declining, and more and more peo-ple are getting enough to eat.Democratisation is proceeding andhuman rights are being strength-ened, although much still remains tobe done. In many areas we are nowseeing improvements in the environ-mental situation. In the past 20-30years in most western countries therehas been a sharp decrease in emis-sions and hazardous discharges.
However there are still too many
destitute people plagued by star-vation, war and disease. Illiteracy isstill a major problem in developingcountries and tends to lock people inthe poverty trap. In the very poorestparts of the world, the population isgrowing. Poor people are forced tolive from hand to mouth to survive.Pollution and environmental hazardremains a global challenge.
Climate change is a particularlypressing issue. Climate change is areal challenge for governments andbusinesses. We would like to see arapid and efficient ratification andimplementation of the Kyoto-proto-col. All the industrialised countriesmust reduce emissions in order tomake a future global agreement pos-sible. We need an international sys-tem of emission trading in order toreduce climate emissions cost-effec-tively, as envisaged in the Kyoto-pro-
Sustainable development
The Brundtland Commission defined sustainabledevelopment in 1987 as development that allows people"to meet the needs of the present without compromisingthe ability of future generations to meet their own needs".The premise is that development and growth must besustainable from a social, environmental and economicpoint of view. The business community shares a strongcommitment to sustainable development.
2015. We believe that the business-es can and must contribute toprivate sector development throughpartnerships with governments andcivil societies and local businesses.Developing aid should focus aboveall on actions to spur self-initiatedactions and entrepreneurshipwithin the developing countries.
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In the view of the Nordic Confederations:
• Open markets are the best means of creating economicdevelopment. Countries with more open trade andinvestment have experienced higher economic growththan countries with less open trade.
• The developing countries must take the lead themsel-ves in solving the poverty problem by pursuing market-oriented national policies.
• Efficient development aid can make a positive contribu-tion to development. The private sector involvementshould be strengthened.
• The developed countries should give better marketaccess to products and services from the developingcountries in the ongoing WTO negotiations, especiallyin agriculture, textile and clothing.
• A decision to negotiate a multilateral agreement oninvestment at the next WTO Ministerial conference inSeptember 2003 is needed. This can stimulate moreinvestments to developing countries.
tutions and open economic policiescan help to contribute to a bettersituation in many of the poorestcountries in the world.
The UN conference in Monterreyin Mexico in March 2002 agreed toincrease official development aid by20-25 percent from 2004-2006 inorder to meet the challenges ofreducing poverty by 50 percent in
will take the lead in this issue. However, governments must pro-vide sufficient incentives andencouragement in the quest for sus-tainable development. Badly-framed markets cannot encouragesustainable progress.
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environment. Indeed, many Nordiccompanies are global leaders in thefield of environmental technologyand clean production.
From a global perspective, webelieve that innovation in productand production technology has nev-er been more important. Business
tive impacts of business activities. Inthe market economy, companiesstrive to use available resources inthe most efficient way. This meansthat new and better technology isbeing developed all the time. Moreproducts can be produced with small-er inputs of raw materials and ener-gy. Goods and products are becomingmore "intelligent"; designed so as notto inflict unnecessary strains on the
tocol. In addition, national reductioncommitments are needed.
In the same way as much ofhuman activity, business activitiescan represent environmentalthreats. At the same time businessis able to learn, innovate, developand implement new technologieswhich provide solutions to environ-mental problems and substantiallyreduce or even eliminate the nega-
In the view of the Nordic Confederations:
• International co-operation for sustainable developmentmust be strengthened
• For development to be sustainable, economic as well asenvironmental and social factors must be taken intoaccount. Business and industry must be profitable inthe long term to permit investments to be made, newtechnology introduced and sustainable growth achie-ved.
• Democracy and the market economy are conditionsthat must be fulfilled in order for development to bemade sustainable.
• Free trade helps to ensure that the world's joint resour-ces are used optimally, and thus contributes to sustai-nable development.
• Governments bear a responsibility for global environ-mental protection. Legislation and standard regulationsmust be implemented on a global scale.
• The Kyoto-protocol should be ratified and implemen-ted rapidly and efficiently.
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employees, suppliers and other part-ners, businesses should be good andreliable operators. Respectingsociety’s rules – both written andunwritten – is, of course, part of theirfundamental social responsibility.
Every company bears individualresponsibility for its conduct, andmost companies also conduct them-selves responsibly. The privatesector and other individual citizensbear no collective responsibility forbad conduct. Nor can private enter-prise be in any way collectively toblame for the misbehaviour of anindividual business. A part of CSR ishigh ethical values as the basis ofoperational management of thecompany.
The CSR debate sometimesappears to start with the incorrectassumption that companies are the”bad guys”. We know of no researchindicating that new or systematic
cussion is the ambition to bring abouta decent global level in terms of cer-tain fundamental, and international-ly-recognised and established values.
In the plethora of internationalCSR rules, conventions, initiativesand policies, there is a common core:the Universal Declaration of HumanRights and the ILO core conven-tions. Combined with some basicprinciples relating to the environ-ment, these form the joint value-based platform of principles to whichthe United Nations Secretary-General Kofi Annan has proposedthat companies should act in theirown corporate domains. This initia-tive, known as the Global Compact,provides a value-based platformthat appears to be a core for CSR.
The primary role of companies isto supply goods and services to theircustomers economically and effi-ciently. In relation to their owners,
The world economy is increasinglyglobal. Many Nordic companies buyand sell products throughout theworld. Worldwide, there are nowsome 63,000 multinational enter-prises. About 16,500 of them arelocated in the Nordic countries.
The interests and opinions ofmany stakeholders have to be met.Governments regulate, trade unionsand organisations follow the conductof companies closely, but the ”mar-ket”, in the form of demands fromconsumers, business associates,investors and capital managersplays the most important roll.
As a consequence, we are seeinga proliferation of various national,regional and international initia-tives and regulatory instruments
aimed at establishing norms for cor-porate social responsibility. Recentinitiatives include the revisedOECD Guidelines for multinationalcompanies, the EU initiative on cor-porate social responsibility, the UNGlobal Compact as well as ILO con-ventions and declarations. Manyinterest organisations have alsodrafted various ”codes of conduct” towhich they think companies shouldconform, such as the Global Sullivanprinciples and the Global ReportingInitiative. In addition, there are theinternal guidelines and policies ofthe companies themselves, whichare often based on the regulations.A growing number of companies areactively engaged in these issues.
The basis for the whole CSR dis-
The global market and CorporateSocial Responsibility (CSR)
As companies become increasingly international thebusiness agenda expands. Companies meet new demandson their own conduct and that of their suppliers andbusiness partners. Companies are not only measured bytheir economic performance, they increasingly also have todemonstrate a good environmental and social perfor-mance. We welcome this development. We believebusiness has a commitment to contribute to sustainableeconomic development.
dals and unfavourable publicity.The market is therefore a morepowerful control instrument thanregulations. Best practice isdisseminated better by marketpressure than by new regulatoryinstruments.
In response to the market’sincreased ethical demands, a wealthof voluntary certification arrange-ments, codes of conduct, monitoringstandards and reporting models ofvarious kinds have emerged. Thestrength of these voluntary instru-ments lies in the market pressureupon which they are based. The vol-untary nature of these arrange-
ments is necessary, since it permitsthe requisite flexibility and encour-ages companies to take actions.
The Nordic Confederations do notbelieve that all businesses can followa single model. There can be no ”one-size-fits-all” approach to theseissues in the practical workinvolved.
Companies must therefore havethe freedom to choose the manner inwhich they wish to assume respon-sibility. In the final analysis, it is acompany’s conduct that counts – notthe existence of a set of corporateprinciples or its affiliation to a par-ticular model.
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panies, like countries, shouldrespect human rights, basic prin-ciples of labour law and fundamen-tal environmental standards.
The world is becoming ever moretransparent. Media, consumers andNon Governmental Organisations(NGOs) closely monitor corporateconduct and the production of goodsand services. If consumers findproducts or manufacturing methodsunacceptable, they quite simplystop buying the goods concernedand urge others to follow theirexample. Investors and capitalmanagers work in the same way.They attempt to avoid risks, scan-
The Nordic Confederations:
• Support the value-based platform that finds expressionin the content of the Global Compact.
• Trust that Nordic companies will respect human rights,basic principles of labour law and fundamental envi-ronmental standards wherever they operate in theworld.
• Believe that individual businesses must decide forthemselves, on the basis of their own operating condi-tions, what forms their work on these issues is to take;whether to adopt specific codes, reporting models,accounting standards and the suchlike in CSR; andwhether there is any reason or need to formulate theirown company-specific CSR policies.
problems stem from the rapidlygrowing number of MultinationalEnterprises (MNEs). On the con-trary, there are ample signs thatmultinationals often act in a waythat improves both the social andbusiness climate in the third world.OECD studies show that they oftenpay average salaries considerablyabove the norm in domestic com-panies in the countries in which theyoperate, and that they often intro-duce new, environment-friendlytechnology, modern managementsystems and so on.
The Nordic Confederationsregard it as self-evident that com-
Denmark Finland Iceland Norway Sweden Source
Direct investment flows 1
Average inflow, million USD, 1995-1999 4.385 3.891 89 3.936 21.833 4
Average outflow, million USD, 1995-1999 4.393 6.645 61 4.401 14.371 4
Inflow % of GDP, 2000 9,81 7,31 1,84 3,72 10,22 1
Outflows % of GDP, 2000 5,33 19,88 4,46 5,1 17,74 1
Trade 1
Exports (Goods and services billion USD at current prices and exchange rates, 2000) 69 51,6 3 75,4 108,1 5
Exports – partners in %, 1999: EU 66.5 EU 58 EU 64 EU 73 EU 55Germany 20.1 Germany 13 UK 20 UK 17 Germany 11Sweden 11.7 Sweden 10 Germany 13 Germany 11 UK 10
UK 9.6 UK 9 France 5 Netherlands 10 Denmark 6France 5.3 France 5 Denmark 5 Sweden 9 Finland 5
Netherlands 4.7 Netherlands 4 US 15 US 5 France 5Norway 5.8 US 8 Japan 5 US 9
US 5.4 Norway 8 3
Imports (Goods and services billion USD at current prices and exchange rates, 1999) 57,6 37,8 3,4 50,4 91,3 5
Imports – partners in %, 1999: EU 72.1 EU 60 EU 56 EU 66 EU 67Germany 21.6 Germany 15 Germany 12 Sweden 15 Germany 18Sweden 12.4 Sweden 11 UK 9 Germany 12 UK 10
UK 8.0 UK 7 Denmark 8 UK 9 Denmark 7Netherlands 8.0 US 8 Sweden 6 Denmark 7 France 6
France 5.8 Russia 7 US 11 US 10 Norway 8Norway 4.2 Japan 6 Norway 10 US 6
US 4.5 3
27
Denmark Finland Iceland Norway Sweden Source
Area
Total area (thousand sq. Km.) 43 338 103 324 450 1
Population
Population 2000 (thousands) 5.340 5.181 281 4.491 8.872 1
Population growth rate 2000/1999, % 0,3 0,2 1,4 0,6 0,2 1
GDP
GDP 2001, (using current Purchasing power parity), Billion USD 160 134,5 8,7 140,4 227,9 1
GDP 2001 (PPP) per capita. Index OECD=100 121 105 123 126 104 1
GDP growth, annual average 1991-2001 2,3 2,9 2,8 3,2 2 1
Sectoral contributions to gross value added 1
Agriculture 2,6 3,7 10,1 1,9 1,8 1
Industry 27,3 34,2 29,5 43 28 1
Services 70,2 62,1 60,5 55,2 70,2 1
Labour market
Total labour force 2000 (thousand) 2853 2609 160 2350 4418 1
Employment by sector 2000, % of total 1
Agriculture, forestry and fishing 3,3 6,1 8,3 4,2 2,4 1
Industry 26,4 27,6 23 21,9 24,6 1
Service 70,2 66,3 68,7 73,9 73 1
Standardises unemployment rates (2001) 4,3 9,1 2,3 (2000) 3,6 5,1 2
Taxes
Total tax recieipts % of GDP (1999) 50,4 46,2 36,6 41,6 52,2 1
Inflation
Harmonised Consumer Price Index (HCPI) July 2001 – July 2002 2,2 2 4 1,2 1,8 6
The Nordic countries at a glance
26
Source: 1) OECD in Figures 2002
2) OECD main Economic Indicators, August 2002
3) The World Factbook (Prepared by
the U.S. Central Intelligence Agency)
4) OECD, International Direct Investment,
Statistics Yearbook
5) World Bank, World Devlopment Indicators
6) Eurostat
2928
The Confederation of Finnish Industry and Employers (TT)
The Confederation of Finnish Industry and Employers (TT) isan organisation serving, promoting and safeguarding theinterests of industrial enterprises and businesses in the fieldsof manufacturing, construction, transport and in other sect-ors of business that are closely connected to industry. TT hasnearly 5,700 member companies, which employ about540,000 people. The member companies are organised into31 branch associations. TT`s member companies account forthree quarters of the total export income and value added ofthe Finnish industry.TT has eight regional representatives located in Finland’smajor cities . Along with PT (The Employers Confederation ofService Industries in Finland) TT has a joint office in Brussels. TT's main task is to advocate the policy interests of Finnishcompanies as they pertain to industry, finance, labour mar-kets, energy and international trade. The Confederationpromotes entrepreneurship, the market economy and theinternationalisation of business.TT is member of UNICE, BIAC, ICC and IOE (the InternationalOrganisation of Employers).
The Nordic Confederations ofIndustry and Employers
Confederation of Danish Industries (DI)
The Confederation of Danish Industries (DI) is the organisati-on of all competition-oriented companies in Denmark. DI has6,100 members from both the manufacturing and the servicesector. The members are organised in one or more of DI'smore than 50 branch associations. The head office is locatedin Copenhagen. DI has an office in Brussels. DI operates in both the Danish and the international politicalframework. DI works to influencing legislation and othersets of rules that are passed or formulated by the Danish par-liament (Folketing), ministries, counties, local councils andother authorities, in a more business-friendly direction. Thesame applies to sets of rules adopted or formulated by inter-national authorities such as the European Union and the Uni-ted Nations.DI is member of UNICE (Union of Industrial and EmployersConfederations of Europe), ICC (International Chamber ofCommerce) and BIAC (Business and Industry Advisory Com-mittee to the OECD).
Confederation of Finnish Industry and Employers
3130
The Confederation of Norwegian Business and Industry (NHO)
The Confederation of Norwegian Business and Industry(NHO) is the dominant business organisation in Norway,managing the interests of some 16,500 member companies.The head office is located in Oslo and 15 regional offices arespread throughout Norway. NHO has an office in Brussels. Anetwork of 23 affiliated sector federations work in close co-operation with NHO. NHO’s members come from nearlyall industries in the private sector, manufacturing industries,services, handicrafts and trade. NHO works to improve the framework conditions for busi-nesses and entrepreneurship in Norway and also internatio-nally. Norwegian welfare can only be secured through a pro-sperous and competitive business community.NHO is member of UNICE, BIAC and IOE.
The Confederation of Icelandic Employers (SA)
SA has 2,700 members in 7 member federations (SI being thelargest member) and accounts for almost 60% of all salariedemployees on the Icelandic labour market. SA's projectsinclude negotiations of contracts with unions on wages andworking conditions, and the interpretation as well as com-munication of decisions by governmental authorities thatdirectly affect the financial performance of businesses atboth the domestic and international level. SA is member of UNICE and IOE.
The Federation of Icelandic Industries (SI)
SI has some 1,400 members and is the main organisation ofIcelandic employers in manufacturing industries, crafts, soft-ware production and related services, ranging from smallfamily businesses to Iceland's largest industrial companies.SI's mission is the creation of a more favourable climate forindustrial enterprise in Iceland and the supporting of itsinterests at home and abroad, promoting the competitive-ness, profitability and the increased internationalisation ofIcelandic companies. SI is member of UNICE.
32
The Confederation of Swedish Enterprise (SN)
The Confederation of Swedish Enterprise represents compa-nies in Sweden and has approximately 48,000 large and smalland medium-sized member companies. These are organizedin 47 sector and employer associations. The associations arethe Confederation's members.Operations cover an extensive field and address numeroustarget groups. SN works to shape public opinion and impro-ve knowledge, develop new ideas and produce tangible pro-posals for an improved atmosphere for entrepreneurship.Free enterprise is both a public interest and a special interest.Swedish welfare can only be secured and developed througha prospering business community. SN is member of UNICE, BIAC and the IOE.
