International Conference on the Social Commitment of Enterprises

Opening address by Prime Minister, Mr. Poul Nyrup Rasmussen; Denmark

Welcome:

Your Majesty, Commissioner, Ladies and Gentlemen.

It is a great pleasure for me to open this international conference.

The conference represents one of the important initiatives which the Danish Government has taken to follow-up on the Social Summit in Copenhagen 2 years ago. I am pleased that we have been able to enlist collaboration from the World Bank, the ILO, UNDP and UNIDO.

The theme of the conference is very much in line with policies the Danish Government has tried to further nationally and within the framework of the European Union. I am delighted that the European Commission is co-hosting the conference with us.

Since our main concern is the social commitment of enterprises I am also very happy that so many business leaders have decided to join us to discuss a new role for business in social cohesion.

A metaphor for the good society

Social responsibility of business is the key element in new partnerships and a crucial element in the good society we must strive for.

First, neglect for the social environment may have just as serious consequences for the long term viability of business as neglect for the physical environment. It does not matter whether your business is in the first, the second or the third world - the message applies universally.

Second, affluence or not, we cannot afford unemployment and social exclusion. Not only because it is a threat to the quality of life of millions. Not only because it undermines the prosperity of society. The matter of fact is that it will damage the very fabric of our democratic societies.

If sustainable growth and genuine welfare is to be achieved we must strive to develop a new minimum standard. A concept in which we combine concern for economic, environmental and social sustainability. In which we balance our concerns so everybody wins.

There is no alternative to a democratic market economy. This is not perfect. Rather the best we have. Therefore, this model must be made more socially sustainable.

No single actor can handle the problems alone. If we are to succeed, we need to combine the efforts of governments with those of business, social partners, governments and NGO’s.

Changes implied by social commitments and new partnerships

We are asking the business community for expertise, knowledge, commitment and participation. Not to be less competitive. Competitiveness and social responsibility go hand in hand.

We ask that you secure the employability of the staff;

We ask you to include people who perform below average, but who can still have a valuable contribution to make;

We ask you to support activities and training in the local community;

We firmly believe that this can be part of a sound corporate strategy.

New Partnerships are not headings for more costs on enterprises. New partnerships are about designing new roles for public authorities. New roles for private companies, employees and social partners. Roles that enable us to develop a joint effort for social development. Roles that enable us to tackle potential social problems where they arise. At the work place and in the local community.

The beauty of the concept

Let me quote from one of the papers in our conference dossier:

'The beauty of the concept of partnership is that if the game is played right, it is one of the very few games which has only winners.'

What does it mean to play the game right?

First; models must be formulated from the perspective of the individual enterprise and their employees.

Second; it must be in the interest of enterprises to do right.

Third; public authorities must recognise enterprises as equal partners. We must greatly improve their ability to service companies.

Fourth; partnerships must be developed at all levels. Between employers and employees in the company itself. On the local level, involving local authorities and institutions, social partners, NGO’s and citizens. On national level between government, organisations and business. And, of course on the international level.

And fifth; the social responsibility of enterprises and new partnerships must be developed on a voluntary basis.

New Partnership for social responsibility in a Danish context

Danish unemployment presently stand at 8 percent of the labour force. This is a major improvement over the 13 percent registered only four years ago.

In an European context this result rates among the very best in the 1990’s.

Credit for the favourable development belong to an intensive effort at improving the functioning of the Danish labour market. Just to maintain a few of these efforts: Clear link between rights and duties for every unemployed person; earlier activation; education and retraining focusing on the qualifications needed for the unemployed to gain foothold on the labour market; decentralisation of responsibility for the implementation of labour market policy on a regional basis; the preparation of individual action plans. To name but some of the most prominent initiatives.

It takes time. 220.000 Danes are still out of work.

Maximising employment is our challenge. We have taken it up in our vision 'Denmark 2005' - a plan which aims at creating new jobs until the year 2005. Which aims at cutting unemployment to 5 percent.

Our goal is ambitious. It must be achieved while at the same time keeping inflation low and stable. And while the repayment of the foreign debt and the public sector debt are continued.

The strategy too is ambitious. It focuses on further developing the Danish labour market reforms. It is supplemented by new initiatives focusing on achieving a more encompassing labour market.

The objective is twofold: Firstly, to create such conditions that the elderly do not leave the labour market too early. Secondly, to provide for the necessary incentives, so weaker groups can enter the labour market.

Therefore, we place great expectations on flexible jobs - jobs with a variable wage subsidy - designed for keeping persons with a reduced working capacity on the labour market. We place trust in the effectiveness of an improved working environment; reforms of the early retirement system, and a specific senior policy for the labour market.

To succeed the partners on the labour market, as well as the business community, will be included more actively than has until now seen the case.

The task before us : Expansion of our capacity for action

As business managers and ministers we may often feel that room for action is limited. That you cannot allow yourself social considerations when you have a business to run. That as government you cannot ask business to perform other than traditional tasks. That is if you want companies to stay competitive and remain within your borders.

Many find it very difficult - if not impossible - to combine social considerations with the quest for competitiveness. Faced with such an amount of disbelief one might easily despair.

My message is different: It is exactly when our options appear most limited that we need to be more imaginative. To be more innovative. To be more daring. Let me suggest to you that our capacity for action is substantially higher than we tend to think. 15 or 20 years ago most of us saw considerations for the environment as fundamentally incompatible with profitability. Today we are all wiser.

I am convinced that the flexibility of our democratic market economies over the next decades will make social concerns an integrated part of a successful strategy. And I see New Partnerships for Social Cohesion as a tool for furthering a development in this direction.

There are obstacles before us, but obstacles exist to be overcome.

Conclusion

In a few weeks time, some of us will meet again at the European Employment Summit. The very fact that is has been decided to hold a special Employment Summit shows that the leaders of Europe are determined in their efforts to create more and better jobs for citizens of Europe.

It also reflects that employment is a joint concern.

Inspired by another of the papers lying in front of you, let me conclude by saying this:

We do not have all the answers. What we can do is to open our minds to the fact that social responsibility is not a luxury item. It is an indispensable tool for future prosperity and business profitability.

The Danish Government plans specific steps to develop an international dialogue. Tomorrow, from this platform, the Danish minister for social affairs, Ms Jespersen will spell out reveal our plans to facilitate this dialogue.

So let us seize the opportunity. Together.

Your Majesty, Commissioner, Ladies and Gentlemen.

Thank you