7.1 Introduction
The participation of business in the public sphere in general, and in the institutions of global governance in particular, especially in intergovernmental organizations, remains an unrelenting source of indignation, as manifested in the alter-globalist movements during the World Trade Organization (WTO) summit in Seattle in 1999 and their contemporary analogues,Footnote 1 or by today’s massive demonstrations to address climate change. Yet, this phenomenon is nonetheless historically firmly anchored, normalized, and increasingly documented by academic research.Footnote 2
There is a robust academic literature addressing these questions. On the one hand, analyses from the fields of international relations, business history, economic sociology, public policies, international political economy, international law, or political theory tend to place emphasis on the lobbying practices of the private sector, the logic of influence and power, and the capture of public interests by private commercial actors at the expense of public institutions.Footnote 3 These works resonate that much more strongly today when the debates on the various responsibilities of ‘business’ and of the capitalist system in relation to climate change are highly politicized.Footnote 4
On the other hand, academic reflection on the democratic deficit,Footnote 5 the lack of accountability,Footnote 6 and the lack of transparencyFootnote 7 of global governance institutions, as well as on the legitimacy crisis of multilateralism,Footnote 8 has inspired recommendations for the ‘democratization’ of global governance institutions in order to make them more legitimate. The reform proposals brought by this thirty-year-old debate are at times expressed in a ‘utopian’ mode symptomatic of cosmopolitan democracy, and at other times in the ‘realistic’ mode of stakeholders’ participation.Footnote 9
In the absence of explicit dialogue between these two segments of academic literature, the impression that emerges from their cross-reading, especially in the present context, is that of a problematic, conflicting, or even incompatible, relationship between, on the one hand, the participation of business within the institutions of global governance, and, on the other hand, the democratization of these institutions. This chapter does not seek to provide a list of the democratic objections raised against business’ participation, particularly within international organizations (IOs) explicitly mandated by their statutes to advance the general interest. On that issue, readers may consult Melissa J. Durkee’s chapter in this volume and, for more specific case studies related to health and food, the analyses of the relationship between the World Health Organization and pharmaceutical companies,Footnote 10 as well as between the Food and Agriculture Organization and agri-food companies.Footnote 11
The present chapter wishes to make a socio-historical and comparative contribution to these debates, as well as to the more general reflection on the challenges faced by IOs in their relationship to democracy, and on the stakes of their democratic representativeness. It aims at contextualizing this gap between the persistent concerns about the state of democracy in IOs and the historical process of normalization of the representation of private companies by a number of established and authorized spokespersons and their active participation in global governance institutions. This contextualization will build upon a comparison between the International Chamber of Commerce (ICC) and the International Organization of Employers (IOE) in the twentieth and twenty-first centuries. For more than a century (since 1919 for the ICC and since 1920 for the IOE),Footnote 12 these two organizations have claimed to represent business, a term that they most often translate into French as ‘l’entreprise’ or, more precisely, as ‘l’entreprise privée’. While both organizations claim to be representative of private companies,Footnote 13 their areas of focus differ. The IOE specializes in so-called ‘social’ issues,Footnote 14 including employment-related issues within the International Labour Organization (ILO), and, as such, represents the employers’ dimension of the representation of business. The ICC specializes, although not exclusively, in ‘economic’ issues related to trade and, its historical role, as a forum for arbitration of international disputes, particularly in connection with the League of Nations (LN) and the United Nations (UN). Today, the IOE introduces itself as ‘a powerful and balanced voice for business’, while the ICC claims to be ‘[t]he bold, inclusive voice of business’.Footnote 15
This chapter does not intend to verify the accuracy of these two organizations’ claims to represent the interests of business by means of a quantitative analysis of their members or their perceived legitimacy, for example. Instead, the objective is to study the actors, the ICC and the IOE, understood as institutional, established, and authorizedFootnote 16 spokespersons that endorse these claims and defend the private commercial sector’s interests. This chapter will also examine the processes by which these claims and the defence of these interests have developed, by outlining the contexts in which they are socially accepted (mainly in the LN, the ILO, and the UN).
Moreover, the terminology used by the ICC and IOE will serve as the starting point of our analysis, keeping in mind that using these terms (which further varied over the course of history) can be confusing in a reflection on the links between the private sector (in the sense of market institutions) and democracy, because they sometimes refer to business, company, private compan(ies), trade, or employers’ organizations. The confusion seems only heightened by the fact that, while ‘civil society’ is an entity that is, in theory, dissociated from the market, and, in particular, from for-profit organizations,Footnote 17 it is not necessarily the case in practice within IOs, where ‘civil society’ rather refers to an unstable nebula of social and economic actors who may use this concept as a label for strategic purposes of legitimization and representation within international institutions. The goal of this chapter is not so much to discuss, from a normative or democratic theory perspective, the soundness or the unsoundness of these distinctions; rather, it is to analyse what these categories refer to in practice when they are used by organizations such as the ICC or the IOE.
Although research on international business organizations is not new,Footnote 18 it remains marginal in the constellation of works that focus either on international non-governmental organizations (and favour those issued from civil society and trade unions), or on interest groups.Footnote 19 This chapter’s socio-historical perspective seeks to reveal the role of these organizations in the more global process of legitimization and normalization of the representation and participation of business in general, and ‘private enterprise’ in particular within global governance institutions, uncovering the different meanings of these terms. One point should be specified upfront: while representation and participation ought not to be confused, these two dimensions are intrinsically linked in the context of IOs because, most often, these organizations’ representation is a precondition for their participation. If representation and participation were to be distinguished, representation would rather refer to processes of authorization, accreditation, and justification of representativeness, as discussed below, whereas participation would rather refer to advocacy and lobbying practices and the negotiation of international norms.
The use of a socio-historical perspective, together with a comparison between the IOE and the ICC – two false twin organizations in the representation of the private commercial sector – is especially interesting because it questions the now commonly admitted view that business ought to be part of global governance institutions. Moreover, it also qualifies the view according to which the 1970s and 1990s would have marked a break from the point of view of the legitimation of private companies as political actors, a break that is often swiftly assimilated to the neo-liberal turn of the 1970s and to the end of the Cold War twenty years later.Footnote 20 As is well known, the participation of the private commercial sector occurred at least concomitantly with the institutionalization of IOs in the mid/end of the nineteenth century,Footnote 21 even though the modes of legitimization and the institutional forms have evolved, also thanks to a clearer distinction, in the category of non-State actors, between non-governmental organizations (NGOs), civil society, and the market.Footnote 22 As for the market, attempts to create what would eventually become the ICC and IOE in 1919 and 1920 even preceded the First World War.Footnote 23
This chapter aims at problematizing and characterizing the links between the representation and participation of the ICC and the IOE within IOs, as well as the issue of democracy from an empirical-inductive perspective, mostly relying upon institutional documentation, archival work, semi-structured interviews, and participant-observation. The analysis identifies discussions and controversial debates at different times in these organizations’ history that either squarely address the question of democratic representation, contend with it, or touch upon it, mainly through questions about the legitimacy of these organizations’ representation and participation in the development of global governance. For greater clarity, we distinguish two dimensions that refer to two distinct levels of analysis: the process of institutionalization of the representation of these two international employers’ organizations in IOs (Section 7.2, or external dimension); and their internal organization, particularly in their relations with their members, the way in which they select them and build a collective entity that is now referred to as ‘business’ (Section 7.3, or internal dimension). By doing so, we distinguish the representation of the ICC and the IOE within international organizations from the representation of business within and by the ICC and the IOE.
7.2 The ICC and the IOE: Distinct Tracks for the Representation of Business in International Organizations
7.2.1 Building an Institutionalized Representation
The ICC and the IOE are two international employers’ organizations that took root in a common ground, the (very European) ‘matrix’ of the First World War.Footnote 24 They are composed of (often common) organizations and of individuals who maintain more or less close ties through international conferences and their membership in national employers’ organizations and networks. Yet, the institutional positions of these two organizations are relatively distinct. While the IOE occupies a secure position, it remains largely confined to the ILO. In contrast, the ICC progressively developed (if unofficially, at first), a privileged relationship with the LN, and later with the UN but without exclusivity.
In beginning our examination of the IOE and the meaning of business representation at the ILO, it is important to keep in mind that the ILO is the only truly tripartite intergovernmental organization where governments, trade unions, and employer representatives are represented on an almost equal footing. According to constitutional and regulatory provisions, the IOE had no institutional existence at the time of the ILO’s creation because the official members of the ILO are national employers’ organizations. Much has already been written about the selection and conditions of participation of national employers’ organizations at the ILO.Footnote 25 Much of the debate relates to the national representativeness of employers’ organizations for participating in the International Labour Conference (ILC),Footnote 26 a condition set out in Article 3 of the ILO Constitution. At this level, the IOE does not play a decisive role, except maybe before the ILO Credentials Committee in order to challenge the representativeness of an employers’ organization and prevent it from participating in the ILC and for coordinating the employers’ group as a whole, to better oppose governments and trade unions.Footnote 27 It is more at the level of the ILO’s restricted and executive body, the Governing BodyFootnote 28 and of certain strategic committees such as the Committee on Freedom of Association that the IOE may influence the policy of the ILO. It does it successfully by controlling the composition of the employers’ group at the Governing Body (which is far more restricted than the employers’ group of the ILC). Since 1948, the IOE has obtained a general consultative status. This status further formalized the role and participation of the IOE, but it is comparable, at least on paper, to that of other NGOs such as (at the time) the International Confederation of Free Trade Unions (ICFTU) now the International Confederation of Trade Unions (ITUC), or the International Cooperative Alliance to name a few. Yet, labelling the IOE as an ordinary NGO within the ILO would be misleading. In practice, and mostly because of the tripartite structure of the organization, the IOE’s relations and influence exceed that of other NGOs with that same status at the ILO. The place of the IOE extends to the ILO’s bureaucracy through a specific service devoted to private companies (the Bureau for Employers’ Activities, ACT/EMP) with which it maintains close ties, even though ACT/EMP is not subordinated to the IOE. Within the ILO, the IOE can only truly be compared to its trade union ‘counterpart’, the ITUC (previously the ICFTU and before it the International Federation of Trade Unions (IFTU)). While the IOE is not mentioned as such in the ILO’s Constitution, it de facto operated the secretariat and federated the Employers’ group within that organization without interruption, if not without contestation, since 1920.
The institutional configuration of the ICC, which also claims to be the most representative organization of business at the international level, is quite different. As highlighted above,Footnote 29 the ICC likewise established very early on a lasting relationship both official and unofficial with the LN in order to exert influence on commercial, financial, and monetary issues. The formalization and institutionalization of this privileged relationship were strengthened in the aftermath of the Second World War, since the ICC was one of the very first NGOs to obtain general consultative status with the Economic and Social Council (ECOSOC) pursuant to Article 71 of the UN Charter. Moreover, if we move to the contemporary period, it is currently the only organization representing the private sector to have obtained, in 2016, a permanent observer status with the UNGA, following a long negotiation process that benefited from significant political support, including that of France.Footnote 30 But contrary to the IOE, the ICC does not control the composition of strategic organs and its influence over the negotiation process is more diffuse.
A comparative perspective reveals that the IOE and the ICC hold different positions in terms of institutional representation. To ground its position as spokesperson, the IOE can rely on the constitutive link that binds national employers’ organizations to the ILO, a link which derives both from the constitutional texts and from its bureaucratic structure. The IOE is a kind of ‘proxy member’ of the ILO towards business, a role which was sanctioned a posteriori when it was granted consultative status. The ICC, however, remained outside the LN treaty system, before moving constitutionally closer to the UN, owing to its consultative status with ECOSOC and then to its observer status with the General Assembly. The ICC strived to develop, through other channels than institutionalized representation, a privileged relationship as adviser, rather than negotiator as would be the case for the IOE, vis-à-vis the UN and other organizations.
Despite its a priori more certain and secured position within the ILO, the IOE remained, in the early years of the ILO at least, very hesitant as to its ability to be a true spokesperson for the interests of business, and oscillated between functions of information and expertise, of facilitation, and of representation. It was not until the Cold War that the IOE fully endorsed its spokesperson role, especially by popularizing the idea of a group of ‘free’ employersFootnote 31 and the representation of the ‘free enterprise’, while defending itself from being a ‘propaganda’ or ‘combat’ institution.Footnote 32 The ICC, however, embraced much more quickly, as early as the interwar period and without a specific institutional basis, its role as ‘spokesman for economic information in its broadest sense, and the intelligent, unofficial but effective guide to international action’Footnote 33 and ‘spokesperson of the business world to the League of Nations’,Footnote 34 which is in line with the ‘Merchants of Peace’ slogan popularized in particular by the 1938 book of George Ridgeway and constantly repeated by the ICC.Footnote 35
Moreover, the IOE’s a priori privileged position only applies to the ILO, despite a strategy clearly pursued by the IOE since the early 2000s to broaden its field of competence and make its relationship with the ILO ‘one among others’, somewhat on the model of the ICC, which also developed privileged links with the General Agreement on Tariffs and Trade (GATT) and then the WTO. Despite its openness to other organizations, the IOE is clearly struggling to expand beyond its organic relationship with the ILO. It is on that basis that the IOE believes it has legitimacy to be represented in the UN. Indeed, notwithstanding its consultative status with ECOSOC since 1948 (which it obtained two years after the ICC), the IOE does not have, like the ICC, observer status with the UNGA. In its still pending application for the same status, the IOE places particular emphasis on its link with the ILO, and highlights the support given to its application by the ILO Director-General.Footnote 36 Even in arenas relatively far from UN multilateralism and the ILO, such as the Business7 or Business20 (i.e. the employers’ counterpart of the G7 and G20 summits), the IOE most often justifies its participation by highlighting its relationship with the ILO.Footnote 37 In this respect, while the ICC remains quite independent from the LN and UN system, one could discuss whether the IOE belongs to the category of ‘IO-sponsored NGOs’ developed in particular by the political scientist Jens Steffek in order to better characterize the interdependency between intergovernmental organizations and NGOs.Footnote 38
7.2.2 An Ambivalent Process of Cross-Legitimization
As a counterpoint to the research on lobbying, which most often sees the relationship between business and employers interest groups as a unilateral logic of pressure exerted by the private sector on the public sector, the elements highlighted above point to a more ambivalent process of cross-legitimization between international employers’ organizations and intergovernmental organizations, even if it may vary depending on the historical context. We now suggest moving to the end of the 1990s until today to show the dynamic through which intergovernmental organizations seem to welcome the participation of the business organizations.
A press conference held in 1999 in the UN at the behest of the then Secretary-General Kofi Annan offers an interesting illustration. This event was convened for the launching of what would become the Global Compact, an initiative that supports private companies in upholding principles on human rights, labour rights, and the environment. Juan Somavia, then Director-General of the ILO, highlighted the ILO’s experience in cooperating with what he sometimes calls ‘business’, and ‘the private sector’, and which refers, in the case of the ILO, to national employers’ organizations, to the IOE, but also to the links cultivated by ACT/EMP with companies of various natures – in the following words:
[S]een from an institution in which business is part of the company, I am saying now that we are in the presence of private sectors. I believe that a greater engagement of the United Nations system as a whole is good for the United Nations and it is also good for business. One thing that I think is clear is that good values in the end are good business, and this is about how we see and how we develop that really basic notion that good values are good for business and business is necessary for creation of employment through investment in other fields in order to be able to bring development solutions to many countries. We just want to make sure that it is done in a way that responds to what the United Nations represents, which is basically a value institution.Footnote 39
These words do not convey unbridled enthusiasm for business participation in the work of the ILO, but a rather pragmatic posture justified by a logical imperative (employment and development) and supported by a relatively vague reference to ‘values’. They are also interesting from the point of view of the institutional logic (tactics, almost) by which the ILO sets itself up as an example, or, at least, as a forerunner and reference organization for the inclusion of non-State actors, in the present case, business. Now more than a hundred years old, the ILO continues to relentlessly draw attention to its tripartite structure and negotiating system as a key element of its legitimacy, both in terms of processes and results. As shown in a previous analysis where we define representativeness as a ‘practical value’,Footnote 40 the way in which the notion of representativeness is codified in legal texts but also performed by relevant actors in their capacity of delegates and representatives, does not allow for a clear delineation as to what would fall under ‘input’ legitimacy (legitimacy through procedures) or ‘output’ legitimacy (legitimacy through results).Footnote 41 The representativeness resulting from tripartism is based both on a logic of efficiency linked to the representation of the interests and forces involved, and on a democratic logic. Here, this democratic logic is essentially understood in terms of social democracy, which (among other characteristics) transposes the mechanisms of collective bargaining tested at the national level to the international level. These two logics (efficiency and democracy) make it possible to justify the presence of employers’ organizations, trade unions, and governments by presenting it as both desirable (in terms of norms and values) and beneficial (in terms of results).
Yet, this difference in status and institutional positioning does not necessarily mean that the IOE has been able to exert a stronger influence at the ILO than the ICC within the LN and later the UN, nor that its relationship is always well accepted by members of these organizations. On this point, it is always interesting to come back to the ‘mythology’, that is, to the stories passed down by generations of employers’ representatives, within these same international employers’ organizations.Footnote 42 Within the IOE for instance, there is a recurring theme of the IOE’s perception as the ILO’s ‘unloved’ partner. This narrative goes back to the time when Albert Thomas, the first Director of the ILO, would have compared the organization to a train in which the unions are the engine and the employers the brake, a metaphor to which the Employers’ group itself keeps referring.Footnote 43 The defensive organizational culture of the IOE, the virulence of the debates, and the recurrent crises of social dialogue (most recently with regard to the right to strike)Footnote 44 also temper the impression of harmonious cooperation, including at the level of the relations between Secretaries General and Presidents. The IOE fosters a culture of social dialogue which is made possible by a guaranteed representation and a participation on a (quasi) equal footing with States and trade union organizations, as well as by the recognition of conflicting interests. This culture of social dialogue prevails within the framework of the ILO and is framed not only by the ILO Constitution but also by the negotiation practices that have crystallized over time.
In contrast, the ICC’s relationship with the UN borrows more from the flexible channels of economic diplomacy, even though it is sustained by institutional arrangements. The ICC has participated in many UN initiatives, starting with the Global Compact in 1999–2000 or the Paris Agreement in 2015, thus developing its reputation as a responsible partner rather than an adversary. Indeed, even if the Global Compact mainly focuses on individual companies and not on international employers’ organizations, it was primarily from the ICC that the then UN Secretary-General Kofi Annan sought and obtained political support, through Maria Livanos Cattaui (ICC Secretary-General) and Adnan Kassar (ICC President). This is exemplified in Adnan Kassar’s declaration at the aforementioned 1999 press conference:
The ICC business delegation appreciates the exceptional leadership, determination and vision that Secretary-General Kofi Annan has shown over the past few years in establishing the fruitful new relationship that now exists between business and the United Nations. Today, on behalf of the private sector, we welcome his call for business to join with the United Nations in a Global Compact to promote shared values in the area of human rights, labour standards and environmental protection. Business takes up the challenge. Business, by creating wealth, makes a powerful contribution to further humanitarian values. That contribution, through the market economy system, is immensely strengthened if accompanied by good governance, labour – neither business nor Government can do it alone. For the Global Compact to succeed all of us – Governments, the United Nations system and business – must be realistic in our expectations. Companies cannot be expected to take on responsibilities beyond their own sphere of activity that are the proper preserve of Governments.Footnote 45
This is also exemplified in Maria Livanos Cattaui’s following words:
The starting point for Mr Annan’s compact must be a clear understanding of roles. Business cannot meet demands and expectations for which governments are primarily responsible – ensuring the rule of law, universal access to education, freedom of speech, fair distribution of wealth and an adequate safety net for the old, the sick and the jobless. What companies can do is to be good corporate citizens in their relations with the community in which they operate and in their treatment of employees, suppliers, sub-contractors, customers and business associates. They can conduct their business fairly, and resist corruption. The continued spread of high corporate standards in all these areas is a powerful combination for progress towards a world which, in Mr Annan’s words ‘offers everyone at least a chance of prosperity, in a healthy environment’.Footnote 46
While both insist on a strict delineation between the public and private spheres in order to avoid too many responsibilities and public interference, they began to sketch a narrative of their participation that is more compatible with democratic values and articulated around the idea that companies could be ‘good citizens’, in particular by doing their part in abiding by international law.
One could think that the context of the 1990s, which was marked by a generally business friendly atmosphere offers an explanation for these statements. However, this was only the beginning of a more deeply rooted trend. For instance, twenty years later, in 2019, in a context already much more critical of business and multinational corporations, we could hear a political figure like Laurent Fabius, in his capacity as former Minister of Foreign Affairs of France, declare on the occasion of the Centenary of the ICC: ‘[I] hope that ICC will use all its authority to convince governments … obviously you are realistic men and women because you are in business, interested in short term issues but you never forget long term issues … I appreciate very much the way you tackle problems: realistic, humanistic, with your heart.’Footnote 47
This brief comparison of the IOE and the ICC in their relationships with the ILO, the LN, and the UN, reveals, first of all, the different trajectories taken by the institutionalization of the representation of business. Such a finding resists a homogenizing view on the channels of influence of the private sector on the public sphere. This comparison further highlights a movement of interdependence and cross-legitimization between international and intergovernmental employers’ organizations based on arguments that sometimes draw on a form of pragmatism very close to the functionalist reading grid,Footnote 48 sometimes in a (neo)corporatist culture of social dialogue, sometimes in a more classically liberal register of the necessity and desirability of a pluralist representation of interests. As a result, this process of cross-legitimization must be described as ambivalent, because it does not pursue the same type of purposes or rest on the same foundations.
The third part of this contribution now leaves the analysis of the relationship between the IOE and the ICC and intergovernmental organizations and moves to a closer examination of their internal organization and the way they deal with the issue of representativeness.
7.3 When the ICC and the IOE Confront Their Representative Claims
7.3.1 The Political Limits of a ‘Universal’ Representation
Accessing the documents governing the internal organization of employers’ organizations is undoubtedly more difficult than accessing those of trade unions and NGOs. Yet, a journey through the archives of the IOE and the ICC evidences a concern to codify the rules of representation and the statutes of the organization, ranging from the admission criteria for membership to the rules governing the delegation of the authority to speak to the international employers’ organization on behalf of private companies, but also to exchanges on the evolution of the political context. Without necessarily interpreting these discussions as signs of a democratic vitality on the part of the ICC and the IOE, they show, at the very least, a concern for demonstrating their representativeness, as a way to ground their legitimacy and safeguard their authority in representing a rather heterogeneous collective, in a twofold concern for inter-sectoral and inter-national universality.
As explained in the first part of this contribution, whereas the ICC seems to quickly embrace the role of ‘spokesperson’ or even ‘parliament’ of the business world,Footnote 49 the first years of the IOE were marked by its initial difficulty in assuming a representative function and speaking on behalf of a collective. This is especially visible when the IOE urges to respect the voting autonomy of its members, but also in its emphasis on the diversity of national contexts, as well as in vivid discussions about the possibility, for a member of the IOE or the employers’ group at the ILO, to speak on behalf of a wider collective. As for the ICC, while this consideration for the autonomy of the members is more likely driven by considerations of institutional survival – aimed above all at not alienating the support of large employers’ organizations which pay larger contributions – rather than by a concern for internal democracy, there remains a certain attachment to issues of procedure and authority delegation, most often aimed at preserving this autonomy. Both the IOE and the ICC are searching for a compromise that is classically sought by any IO, governmental or not: a compromise between the affirmation of their role as representative institutions with their own voice, and the recognition of the autonomy of their members. This quest leads them to constantly insist on the diversity and heterogeneity of the collective they represent.
With regard to the selection of their members, the common choice made by the IOE and the ICC to represent the entire private sectorFootnote 50 results in a preference given to ‘umbrella organizations’ or ‘peak organizations’, as opposed to sectoral professional associations. Although the IOE has long been more restrictive than the ICC by only accepting employers’ organizations and not individual companies (this restriction has been loosened since the 2010s) and insisting on the need for a single interlocutor per State,Footnote 51 the two international employers’ organizations share a concern for geographical representativeness on a national basis (by country), while also encouraging regional groupings. They both ground part of their legitimacy on their ability to ‘universalize’ representation and speak on behalf of the ‘greatest number’. This concern to increase the number of their members, whether employers’ organizations in the case of the IOE, or national committees in the case of the ICC, manifests itself at different key moments in the history of these two organizations, which more or less overlap (creation phase, Second World War which caused the loss of many members, decolonization, end of the Cold War), but towards which they will at times adopt different attitudes. This is again where distinct trajectories are observable in the representation of business.
While the ICC places greater emphasis on the number and the diversity of the companies it represents, the IOE mostly insists on the number of States in which it has members (i.e. employers’ organizations), and even more on the fact that its members come from States in which employers’ organizations are independent from public authorities. Without necessarily raising the argument of democratic representation, the condition of representativeness in the sense of the independence and autonomy of employers’ organizations from State authorities, is a more decisive criterion for admission within the IOE than the ICC. The ‘borderline’ case of communist countries, of which both the IOE and the ICC are, unsurprisingly, open adversaries, offers an illustration which can be studied from the interwar period until (at least) the end of the Cold War and even afterwards. The relationships between the IOE and the ICC and Soviet and then Russian organizations and companies are generally non-existent until the end of the 1990s. The rejection was more pronounced on the side of the IOE which spearheaded the fight against communist ‘employers’, to whom it denied any representativeness. The treatment of China, however, is slightly different. As for the IOE, there was no question, until the end of the 1990s, of making room for Chinese representatives within the IOE and the ILO Governing Body (see Section 7.1).Footnote 52 Infringements of the principle of freedom of association and suspicions about the lack of independence of employers’ organizations continue to be considered as obstacles, if not fully prohibitive impediments, to the genuine integration of Chinese organizations into the IOE for instance. No Chinese national holds a leadership position within the IOE’s internal structures or in the employers’ group of the ILO Governing Body. To this day, the Chinese delegate in the ILO Governing Body only has a deputy member status and plays a rather marginal role in the employers’ group dynamic.Footnote 53
Quite to the contrary, as early as the interwar period, the ICC adopted a much more depoliticized and open attitude towards China, prompted by the need to maintain links with Chinese trading circles and the observation of China’s dynamic trade and development.
In 1995, the ICC publicly supported China’s (and Russia’s) accession to the newly created WTO pointing to the supposed benefits of socialization into multilateral institutions and to the gradual normalization of these countries in the economic and commercial system. ICC Secretary-General Maria Cattaui then declared: ‘ICC wants to deliver a very important message that as Asia – especially China – develops, there is a growing need for Asian economies to be integrated into the rule-based, multilateral system for international business transactions’.Footnote 54 Moreover, the ICC includes a large number of Chinese chambers and organizations among its members,Footnote 55 and among its most senior representatives (presidents and secretaries-general) are many individuals who have developed privileged interests and connections with Chinese companies.
This type of borderline case highlights the two different conceptions of representativeness of the IOE and the ICC. The IOE seems to rely more on a neo-corporatist paradigm, grounded in the recognition of the autonomy of interest groups as a prerequisite for the institutionalization of negotiations and any form of democratization. In contrast, the ICC seems to follow a liberal paradigm of ‘gentle commerce’ (‘doux commerce’), which bets on the democratization resulting from the development of trade and liberalization, in line with its historical slogan of ‘Merchants of Peace’ mentioned above. Such a slogan allows it to display a posture apparently less political and restrictive than the IOE in its relationships with its members.
7.3.2 The ‘Diversity’ Argument in Light of the Growing Importance of Multinational Companies
This last section addresses the dilemmas raised by the growing place of multinational corporations in the public debate. It examines how the IOE and the ICC have tried to reconcile their claim of representation of all companies with the need to intervene in the specific field of regulation of multinational corporations to defend their interests. Since the 1970s, when the debates on the regulation of multinational corporations became increasingly politicizedFootnote 56 and the number of arenas and forums speaking in the name of business like the Davos Forum multiplied, the question of members’ representativeness and of the type of companies represented (multinational or not) became more and more pressing. In order to understand the place of multinational corporations in the organizational structures of the IOE and the ICC, it is necessary to review their respective membership admissions procedures.
As mentioned above, the IOE’s statutes have long reserved membership to employers’ organizations (with a preference for a single interlocutor per State), whereas the ICC established a system of national committees which oversee multiple entities and to which companies can adhere directly. In the case of the ICC, employers’ organizations, chambers of commerce, and businesses are also eligible for membership status, and the ICC tries to federate them through its national committees. In the case of IOE, the national member is the employers’ organization (in principle the largest organization, even if this is not systematic),Footnote 57 which results in the indirect representation of companies, including those that are multinational. In addition, the ICC brings to the fore at the level of its presidency the leaders of large companies, including multinational corporations; for a long time, this was not the case at the IOE, where preference is given sometimes to leaders, sometimes to ‘permanent employers’, thus making the presence of multinational corporations within this organization even less visible.
In addition, the architecture of the ICC tends to layer on levels of representation by adding new structures such as the World Chambers Federation which was created in 1951 and currently claims to convene some 12,000 chambers of commerce.Footnote 58
As a result, the ICC at least seems to benefit from a kind of a ‘critical mass’ effect, from a diversity of companies, and from an institutional flexibility that seems to be greater than the IOE. Because of its network structure, the ICC has a varying membership which should be analysed in greater depth, but such an analysis goes beyond the scope of this chapter. According to a report on its relationship with the UN, the ICC represented, in 2015, 6.5 million companies in more than 130 countries.Footnote 59 In 2023, the ICC claims in the membership section of its website to be bringing together more than forty-five million companies from more than 170 countries ‘ranging from the world’s largest companies, to SMEs, business associations, banks, law firms and local chambers of commerce’.Footnote 60 Again in 2023, the World Chambers Federation section of the ICC’s website claims that the ICC has members in 116 countries/territories.Footnote 61 The IOE, which also claims to be ‘the largest network of the private sector in the world’, lists 150 employers’ organizations,Footnote 62 representing fifty million companies worldwide,Footnote 63 in about 140 States and territories.Footnote 64
Yet, these competing claims of representativeness result in different strategies of positioning and justification on the question of multinational corporations. The ICC defends the idea according to which the organization, while directly including multinational corporations and powerful actors from the international trade among its members, also represents small and medium-sized enterprises, regardless of their degree of integration into the world market. Hence the emphasis placed on national committees, which are (in principle) a privileged liaison body with the local companies:
I would like to clarify one point which is the prevailing idea about ICC that it is composed only of the very important multinationals and that we, in the ICC, are just taking care of these multinationals. This is not true. The ICC is representing business and in business, there are plenty of middle and small-sized enterprises. We are represented in 137 countries and most of these countries are developing countries. For instance, I come from a very small country, from Lebanon, and I have been elected as President of the ICC. This shows that we are concerned with the business in general, and the marriage with the United Nations according to us, coming from a small country, will yield good benefits.Footnote 65
The IOE resorts to the same type of arguments, especially when it finds itself caught up in debates on the regulation of multinational corporations. It is also because of the intense lobbying exercised by the IOE during the negotiations on the 1977 ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy that the definition of a multinational enterprise adopted in that Declaration is so broad.Footnote 66 However, the IOE is subject, especially within the ILO, to a different criticism than the ICC. Indeed, the employers’ group and the IOE are regularly accused by trade unions and other civil society NGOs of not being representative of any companies, multinational or not. This criticism points to the ‘lawyers’,Footnote 67 working for the law firms defending the employers’ interests, to the employer civil servants or to the ‘permanent employers’ who hold the main representative functions within the Employers’ group and the IOE. Although this criticism is only partially justified and is part of the much broader phenomenon of bureaucratization of professional representation and the NGO world,Footnote 68 it is worth noticing that, in 2008, the IOE decided to make explicit room for multinational corporations within the framework of specific mechanisms such as the Global Industrial Relations Network (GIRN). The GIRN aims to offer a small group of multinational corporations, in exchange for a specific fee, a space for confidential discussion on the problems they encounter in terms of labour law, as well as information and advice on existing international regulations pertaining to social matters.
In a context where the representation of business is becoming increasingly competitive, and where debates are becoming politicized – whether about the responsibility of multinational corporations or the issue of conflicts of interest, as exemplified by the progressive exclusion of the tobacco sector from the UN public-private partnerships or the negotiation since 2014 of a UN treaty to regulate the activities of transnational corporations – the question of the representativeness of organizations such as the ICC and the IOE is no longer only an issue of internal legitimacy, that is, vis-à-vis their members, but also, of external legitimacy, that is, vis-à-vis their trade union interlocutors and civil society, as well as the IOs in which they have institutionalized and established their representation.
7.4 Conclusion
To conclude, this comparative analysis of the representation and participation in IOs of the ICC and the IOE as spokespersons for business has shown that questions and tensions have not so much focused on the legitimacy of such representation as on its modalities, confirming the argument of a ‘non-problematic’Footnote 69 participation of business in the institutions of global governance. The absence of representation has never really been envisioned and representation has not been the subject of any particular dilemma, since these two organizations were created for the very purpose of representing the interests of private companies within IOs and accepted as such by the latter. However what must result from, this representation, is a more open question. But whether this place has been reserved and guaranteed for them (as for the IOE at the ILO), or whether it has been achieved through the establishment and maintenance of diplomatic relations (as for ICC with the UN), the representation and participation of private companies through these two organizations has not been fundamentally questioned.
Criticism against the place of the private sector addressed by the current protest movement, which is undoubtedly more pressing in the context of the climate crisis and in the aftermath of the 2008 financial crisis, raises the issue of whether to challenge this historical process of normalization of relations between the private and the public sectors at the international level. Because this debate seems formulated with reference to democratic concerns (denunciation of conflicts of interest, strengthening of the general interest), the question also arises of what ‘defence’ strategy organizations such as the ICC and the IOE can adopt if they want to stick to a democratic mode of legitimization. A first strategy precisely consists of reverting to this historical dynamic of convergence, based on the institutionalization of the relations between the private and the public, their codification in texts or in diplomatic practices. Another strategy is to question the legitimacy of their opponents, for example by denying their representativeness and highlighting the fundamental principles of their own.
For instance, in 2000, ICC Secretary-General Maria Livanos Cattaui spoke in response to the mobilizations of civil society, aiming to deny any representative legitimacy to these movements and accusing them of running counter to ‘true’ democratic processes:
It is quite natural that people flail out. But there’s a tendency when you’re flailing out and looking for a cause to say, I represent the world. And that is simply not true. Nobody voted for these protesters. We have to be very careful to listen and understand the causes for uncertainty. But we must also understand that this cannot undermine proper democratic processes. When I go around the world and I see developing countries, there is only one thing they want and that is to be more a part of this world, to be more integrated into the economy, have better access to our markets, to our knowledge and to our technology. The last thing they want is to stop the world and get off.Footnote 70
The IOE uses the same rhetoric, but less so in its relations with trade unions, which it considers to be negotiating partners, than with NGOs.Footnote 71
If the two organizations now share this assumed position of representative spokesperson of businessFootnote 72 by taking part in the creation of international norms and taking on a historical function of ‘responsible partner’, the socio-historical perspective allows us to see a less linear process, or, at least, a less obvious and more differentiated one than it may seem. The institutionalization of the relations between the ICC and the IOE and intergovernmental organizations, as well as their positioning as spokespersons for business at the international level, occurs without the democratic question being central in the discussions, but with a constant concern to secure their place and legitimize their representative claims that can lead them to reveal, or even to take on, positions that are more political than they may initially appear. Finally, it is unclear that this strategy, which is essentially based on the demonstration of external and internal representativeness, will achieve its goal of defending against the claims of lack of legitimacy that seem to currently face business organizations.
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