UN Puts Convicted Korean Businessman on Global Compact Board, Dismisses Complaints

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/ungc1skgroup040809.html

UNITED NATIONS, April 8 -- As the UN Global Compact hits its tenth anniversary, questions are mounting about its complaint resolution mechanism, its seeming pro-business slant, even its board of directors. On March 11, Secretary General Ban Ki-moon named as one of six new board members a South Korean businessman, Chey Tae-won of the SK Group, who was convicted of fraud in 2003.

Inner City Press on April 8 asked the director of the Global Compact, Georg Kell, why in the world of CEOs one convicted for fraud would be selected for the board of an entity ostensibly espousing integrity. Kell acknowledged the criminal conviction but said that the Compact is "not a white knight," that one can "learn from mistakes," and that Chey Tae-won's inclusion by Ban Ki-moon onto the board of the Global Compact is "very fitting." Video here, from Minute 49:47.

In 2003 Chey Tae-won, whose SK Group is involved not only in electronics but also oil refining, was sentenced to three years in prison after he was "convicted of inflating the 2001 profit of the conglomerate's trading arm, SK Global, by 1.5 trillion won ($1.25 billion)." He only served seven months in jail; his wife is the daughter of former South Korean president Roh Tae-Woo.

Chey Tae-won held a Korea Night event which Ban Ki-moon attended at the most recent World Economic Forum in Davos. Now his rehabilitation extends to being named to the UN's Global Compact board, and being called "a change agent" by its director. While noting that the the UN's Compact with business was started under previous Secretary General Kofi Annan, the current S-G Ban Ki-moon has embraced the Compact, although he has yet to apply his philosophy of mobility -- no more than five years in any one position -- to it.

At Wednesday's press conference, Inner City Press asked Kell why the Compact's annual report says nothing about the 56 complaints against member companies the Compact has acknowledged receiving. Kell replied that most complaints are "by disgruntled employees" and "we are not an arbitrage organization." Video here, from Minute 53:10.

Inner City Press asked about the complaint against the activities in Sudan of PetroChina, which the Compact has dismissed and on which Kell replied that there is no news, and against Deutsche Bank. Kell said that concerned some "investment in a Central Asian country" but "we don't know the background." Well, Deutsche Bank among other things held over $3 billion in natural gas revenues for Turkmenbashi, the dictator of Turkmenistan. No white knight, indeed. Who's next for the Global Compact board, asked one wag, Bernie Madoff? To be described as a change agent learning from mistakes?

Issues surround the UN's and Global Compact's involvement in the CEO Water Mandate arose, but will be covered in more depth in coming days, as information about the session in Istanbul continues to arrive.

And see, www.innercitypress.com/ungc1skgroup040809.html