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									                     Global Compact Development Project
                   Combining best practices from Panama, Ghana and Thailand



                                           Final Report
                                          May-August 2002



      “The Global Compact Development Project is a partnership project that promotes public-private
        partnerships and good corporate citizenship within the framework of the Global Compact.“


A.        Context and Introduction

The United Nations has been working with the private sector for more than 50 years, for
example through the procurement of goods and services. Since then, the UN and business
have been interacting through intergovernmental processes and policy networks. At the
beginning of a new century, societies are facing increasingly complex and interconnected
economic, social and environmental challenges.

Beside these new challenges, the United Nations and business share common goals, even
though they might be driven by diverging interests. The multilateral institutions provide the
soft infrastructure for sustainable development by advocating for the respect of public goods1
and universal values. The private sector contributes to these goals not only through
philanthropic action or community projects but also through the way good corporate citizens
are conducting their business, including sound social and environmental investment.

The Global Compact, initiated by Kofi Annan in 1999, calls for cooperation on the global
level. The Secretary-General asked world business and other actors to unite in a multi-
stakeholder partnership in order to address the challenges of globalization through dialogue,
mutual learning and partnership projects.

Today, more than 500 companies are working towards realizing the Global Compact’s
principles - together with the UN, partners from civil society and labour. The long-term
success of the Global Compact with a view to concrete results will depend on positive
change initiated at the country level, particularly in developing countries.

On 9 April 2002 in Spain Kofi Annan explained: “ I see the Global Compact as a chance for
the UN to renew itself from within, and to gain greater relevance in the twenty-first century…”
the Secretary-General’s vision has been the guiding principle of the project with a view to
help the UN country teams to use the Global Compact efficiently as a mechanism for
renewal and change.

1
    Such as peace, public health and education

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B.      Challenges



Capacity building:

In developing countries neither UN staff nor business leaders are yet well prepared for joint
undertakings due to historical reservations, misunderstandings and a lack of contact. Even if
contact is established, communication problems and a lack of resources and capacity create
obstacles for cooperation. The UN and business are not speaking the same “language“ and
do not know enough about each others’ roles, resources, interests, working methods and
culture. However, there is an increasing demand for building the capacity of those, in the
private and in the public sector, willing to develop efficient partnerships.


UN learning networks:

The Global Compact offers companies the opportunity to exchange their good practices
through the website as well as through an annual learning forum conference at the global
and local level.2 However, there is no corresponding learning network for UN Country Teams
to exchange their learning experiences developed in dealing with business. As long as the
Global Compact assumes that business alone can and has to learn from this new form of
cooperation, the full potential of the Global Compact in developing countries will not be
realised.

Building Local Compacts:

Despite the fact that the GC Office in New York, with the support of UNDP, undertakes
efforts to coordinate the outreach to the country level the relation between the global level
and local initiatives starting up around the world remains weak. Moreover, the way the
concept of the Global Compact is applied differs from country to country. On the one hand,
initiatives at the country level must fit the local context and culture and the Global Compact
concept should be adapted to the local conditions. On the other hand, there is a need to
ensure a minimum of coherence in the way the Global Compact is implemented locally.
Otherwise, what the “label“ Global Compact stands for will become vague and diffuse.


The participation of SMEs:
                                                                                                 3
Despite the fact that the Global Compact also includes a significant number of SMEs from
developing countries, the initiative is perceived to be driven by large enterprises from
developed countries. This is true insofar as SMEs often lack the capacity and confidence to
take full advantage of the Global Compact. For instance, they may need support in drafting
their letter to Kofi Annan or posting their examples on the Global Compact website.
Accordingly, since its launch in Davos, the Global Compact has been perceived as a “global“
initiative that struggles to trickle down to developing countries and to reach SMEs.




2
  For more information on the first learning forum meeting at the country level introduced by the Global
Compact Development Project and UNDP Panama see below section D paragraph 1.
3
  Small and Medium Sized Enterprises

                                                                                                      2
C.     The Project


1. Starting Point

In October 2001 BASF approached the United Nations System Staff College (UNSSC) and
UNDP in order to undertake a project increasing the capacity for cooperation between the
United Nations and business in developing countries and to support the development of
sustainable Global Compact structures at the county level. BASF was interested in UNDP
global outreach and in the specific mandate of UNSSC positioned at the centre of the UN
system and able to interact with every UN agencies. Moreover, BASF had been informed of
UNSSC learning activities for UN country teams on partnership building and corporate social
responsibility and felt that a business contribution in this project could reinforce its impact. In
order to match the task, the project itself was designed as a partnership combining the
expertise of focal points from the United Nations and business.

In March 2002 the project team made of a representative form BASF and a representative
from UNSSC, agreed on the concept with the Global Compact Office and the UNDP Bureau
for Strategic Partnerships in New York. At the same time, ICC Secretary-General Maria
Cattaui reviewed the project concept with business leaders at the International Conference
on Financing for Development in Monterrey. In May 2002, the project team presented the
final concept to stakeholders, including UN agencies, business representatives and civil
society in Turin, in order to collect input for the field mission. The three countries of the
project mission, Panama, Ghana and Thailand were selected by the UNDP Bureau for
Strategic Partnerships in coordination with the International Chamber of Commerce.

2. Project Team:

The project team was composed of:

Dr. Andreas Bluethner, Trade Law Advisor, International Economic Affairs, BASF AG
Ludwigshafen
Global Compact Focal Point for BASF, UNISTAR Volunteer

Dr. Bérangère Magarinos, Project Officer, UN System Staff College, Turin, Italy
In charge of UNSSC Partnership Project.
Global Compact Focal Point for UNSSC.

During the mission in Ghana and Thailand, the project team received support from
Paula Marie Hildebrandt, fellow of the Postgraduate Program in International Affairs of the
Robert Bosch Foundation and the German National Merit Foundation and UNDP consultant.
She focused on the work with civil society organizations.

3. Objectives:

The overall objectives of the project missions were to:

 provide sensitization workshops for UN and business leaders on the Global Compact,
  corporate social responsibility and partnerships management
 identify with the UN country team partnership opportunities and define common goals
  between the UN and business in the country
 support UN Country Teams in developing their inter-agency Global Compact strategy
 open a dialogue in the country on UN/business relations
 facilitate information sharing amongst UN agencies on their respective partnership
  experiences

                                                                                                 3
 supply coaching to all sides on how to approach potential partners (“brokerage“),
 facilitate a joint event4 that enabled mutual learning through shared experiences, pooled
  partnership resources, created new contacts and initiated a national network,
 provide feedback to improve existing partnership projects,
 support companies willing to join the Global Compact,
 facilitate Global Compact promotion and information events,
 give advice on the development of sustainable Global Compact structures and
 share best practices from UN-business cooperation from other local Global Compact
  initiatives between the UN Country Team and business.
4. Approach:
The methodology that was applied was not based on traditional top down training methods.
Experience shows that adults learn faster when applying learning directly to their work
situation. In that respect the project team used coaching methods including learning tools
adapted to individuals in demanding positions with limited availability. The project team spent
a period of four weeks with the UN Country Team and organized its work into three main
phases5:
    1. The first phase is the assessment phase and was spent individually with senior UN
        staff members as well as with staff directly involved in partnership projects or with a
        special interest in developing business linkages in their work, such as “Global
        Compact Focal Points“. The objective of the first phase was to review existing
        partnerships, interests in the Global Compact approach, local best practices and
        lessons learned as well as future plans and expectations. The team also interviewed
        business leaders and included their inputs in the overall assessment.

    2. In the second phase, the project team organized and facilitated two learning
       workshops in each country, one for UN staff and the second one for the business
       community. The workshop for business focused on the elaboration of the Global
       Compact’s content and mechanisms, its benefits and obligations and case studies.
       The UN workshop contained training on the Global Compact and partnerships. Aided
       by facilitation from the project team, the participants identified areas of mutual
       interest6 with business, with a view to the specific situation of the country.

    3. In phase three the project team organized with the UN Country Team and businesses
       a joint event (“Learning Forum“) to explore future collaboration. The agenda and
       objectives of the event were defined in agreement with the Country Team during
       phase two and depended on the development of the local Global Compact initiative.

    4. The fourth phase of the visit was dedicated to the follow-up of the joint action plans
       defined during the joint event. In accordance with the needs of the UN Country Team
       and selected business leaders, the project team helped to develop mid-term
       strategies for the local Global Compact Alliance and individual projects. Coaching for
       individuals engaged in Global Compact activities continued after the project mission.

4
  The joint event took place either as a “Learning Forum“ for countries with a developed local Global
Compact initiative up and running since at least one year (Panama), as a strategy meeting to define a
base for joint further development of the Global Compact Alliance (Thailand) or as the launch of a local
Global Compact initiative (Ghana).
5
  The length and order of the four phases depended on the specific development of the local Global
Compact initiative. In Panama and Thailand, the project team proceeded as described below while in
Ghana the project team first supported the launch of the Global Compact (phase three) followed by the
two capacity building workshops (phase two).
6
  Selected areas of mutual interest included education, health (HIV/AIDS), sustainable tourism and
maritime environmental protection. These areas of potential cooperation were presented by UN
experts to business in phase three.


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D.        Positive changes created


Beside the activities outlined above, the following achievements and innovations were
completed during the project mission:

1. First Learning Forum at the Country Level:

The project team introduced and facilitated the first Global Compact Learning Forum at the
Country Level in Panama. So far, mutual learning, has been generated through a web-based
                                                      7
learning forum and a yearly Learning Forum meeting . The demand for a country level forum
arose from the fact that web-based learning alone does not inspire participants’ action in the
same way as a learning forum conference where people meet personally. Moreover, local
entrepreneurs and UN focal points often lack the resources to travel to global learning forum
meetings. Finally, but most importantly, a learning forum at the country level provides a
platform for local enterprises of any scale to present their good practices and to inspire
others with examples that fit local capacities and culture. Nevertheless, under certain
circumstances a combination of local and international presentations has been proven to
create fruitful exchange and inspiration and might bring together the appropriate partners
and ideas for a project.

2. New learning opportunities:

While utilizing the mechanisms of the Global Compact, the project team also explored new
ways of creating learning in the field of UN-business partnerships. For instance, by
organizing and facilitating joint UN-business events, the project team initiated a self-learning
network of different but complementary best practices and working cultures.

1. First, business participants learned from UN experts about common goals, such as the
   fight against HIV/AIDS, the improvement of the education system and other ways to
   contribute within their sphere of influence.

2. Second, UN participants were able to learn from business working culture, particular the
   “business way“ to develop and implement projects.

3. Third, the Global Compact meetings initiated self-learning amongst the different
   participants from the business sector. Local participants were inspired by examples
   presented by international corporations and their encouraging way to address the nine
   principles, whereas international participants learned more about the local way to
   implement the nine principles, in particular with local partners and for the benefit of local
   communities. The same was true of internal learning among UN participants since the
   Global Compact often for the first time fostered the exchange of experiences in dealing
   with business and demanded coordination of divergent, overlapping and sometimes,
   contradictory approaches. The UNSSC always insisted for the UN workshop and other
   activities to be based on an inter-agency approach. As a result, the process has been
   seen as a valuable team-building exercise for UN country teams.

4. Fourth, the project team introduced good practices from other countries, not only from
   written case studies, but also from their field work experience.

5. Finally, due to the design of the mission as a partnership project, the business person in
   the project worked in close cooperation with UN staff and the UN team member worked
7
    Which first took place in London in October 2001.

                                                                                              5
  closely with business people. This constellation created permanent opportunities for
  learning by doing, since it enabled all sides to detect and adopt best practices from both
  working cultures.

3. Involving the media:

In Panama and Ghana the project team dedicated a significant amount of time to media
work, including interviews with newspapers, business magazines and press conferences as
well as radio and television broadcasting stations. This was of value in creating the
necessary awareness of the Global Compact and the events during the project mission.

Media involvement set an important incentive for business to participate and at the same
time created transparency and incentives for action, for example through the publication of a
photo of CEOs singing on. In addition, the project team encouraged local newspapers to
publish regular Global Compact columns in order to stimulate action through reporting
progress and positive change and to illustrate the Global Compact as a continuous process
of improvement.

4. Involving local business leaders:

The project team was able to involve the UN and business equally in the learning activities
organised in each country. Invited through local chambers of commerce and the national
sections of the ICC, local companies, in many case for the first time, had the opportunity to
participate in Global Compact workshops facilitated by the UN. Around 120 business
participants took advantage of this offer.

In addition, the project team supported around 25 companies individually, including local
SMEs, in their efforts to draft their letter of participation, to prepare their examples for
presentation at the joint event, to write their examples for the Global Compact website and to
define and improve their GC activities. It also supported the brokering of new partnerships.

Finally, the project team encouraged local business to support the Global Compact. Around
25 participants took advantage of the opportunity to join during the project mission. Provided
appropriate follow-up by the local UN focal point is provided, this number should rise
significantly during the next months, since not all companies approached were able to join
formally within the few days available during the project mission. However, in Panama and
Ghana it proved to be very valuable to be able to offer companies the chance to sign a
sample letter (“signature table“) during the events, since this inspired others to follow.

5. Involving Civil Society and Labour

In two out of the three countries civil society and labour were not involved in the local Global
Compact Alliance. In agreement with UN officials, the project team carefully introduced
appropriate partners from NGOs (in particular local community initiatives), academia and
labour expressing their willingness to cooperate with other partners in a positive spirit and
through constructive contributions.

Support provided to these groups included preparations for the joint event, coaching on the
Global Compact, individual coaching related to partnership projects and guidance on how to
compile Global Compact case studies. Furthermore, the project team supported universities
though a guest lecture on the Global Compact and gave advice on how to mainstream the
nine principles by including them in their curriculum.




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6. Culture bridging the gap

In the preparatory workshop for the three missions8 participants identified culture as a
possible link to bridge the gap between divergent partners in a country as well as between
the global and the local level of the Global Compact initiative. In Panama, “the cultural
bridge“ has been created during a social event that took place at the end of the Global
                                                         9
Compact Learning Forum. The event, “Thoughtfood“ allowed participants to discuss the
information received at the forum as well as to elaborate first steps towards concrete action
in a way that could not take place in public sessions. Local musicians cheered up the event.

In Ghana, the project team was able to involve the regional Africa office of UNESCO in the
business event. At the end of the workshop, UNESCO gave an informal presentation on
culture the common roots of a globalised society. The UNESCO team further presented their
projects in an exhibition. UNESCO opened a dialogue with business on how they can
participate in maintaining the cultural heritage of old Accra. The exhibition presented single
projects of UNESCO, including schools and hospitals, with photos and a definition of the
financial and non-financial needs. This element of the Global Compact Business Day was
designed to appeal to the local responsibility of entrepreneurs and to offer a one-stop
opportunity to get them engaged in UN partnerships targeted particularly towards
entrepreneurs with possible in-kind contributions, such as the construction sector.



E.     Suggestions


1. Sustainable and Coherent Global Compact Structures

All three UN Country Teams had developed their specific local Global Compact structure.
They all had in common a “steering committee“ composed of UN and business
representatives, mostly CEOs. The project team suggests the renaming of these committees
as “advisory councils“ in order to reflect coherence with the international body, advising the
Secretary-General’s Office on matters related to the Global Compact. Furthermore, these
bodies should each include at least one representative of all stakeholders involved in the
Global Compact (union, NGO, academia). These bodies should not meet more frequently
than necessary. They should define the long-term strategy of the local Global Compact
Alliances. Due to their legitimacy as local multi-stakeholder bodies, they might also issue
recommendations on matters of principal societal relevance related to the nine principles.

Furthermore, one Country Team put together sub-committees on the three areas of the
principles - human rights, labour and environmental standards. This three-fold sub-structure
may only add value to very advanced local Global Compact initiatives with a wide range of
issues to address. Given the limited time and resources available for participants’
engagement in the Global Compact, there is a danger of losing momentum due to the trade-
off between discussions and concrete action. If a local Global Compact Alliance decides to
introduce such a body, local representatives of UNHCHR, ILO and UNEP should be included
if they are represented in the country, since these organizations have the authority and
competence to apply and interpret these principles.

One local Global Compact initiative introduced a coordination committee composed of
mid-management from stakeholders’ organisations engaged in the Global Compact. The

8
  Took place in Turin in May 2002
9
  “Thoughtfood“ was sponsored by a Global Compact company that also provided a free shuttle service
to the “fiesta de la música“, a global event connecting several countries worldwide through culture.


                                                                                                  7
advantage of such a body seems to be that it distributes the responsibility and the workload
for organizing events between the UN and all beneficiaries and at the same time gives
ownership to all stakeholders. Due to its composition of mid-management, this body can
meet more frequently and may accordingly give advice on day-to-day questions arising in the
local Global Compact network.

Whatever the shape of the body maintaining the national Global Compact network it is
important for the Global Compact to be recognised on the UN side as a UN country team
initiative led by the Resident Coordinator. Indeed, we noticed that the business community
is expecting a diversity of UN agencies to be involved. For instance, companies already have
partnerships with UNIDO or UNAIDS and are wondering if those UN agencies are
participating as well. Moreover, UNDP recognised in the three countries that it would be
efficient to share the amount of work to follow up on the Global Compact. Certainly UNDP
has the lead in this effort. However, the Resident Coordinator has a fundamental role to play
to ensure coherence and harmonization of UN actions towards business.

2. UN-wide learning network on the Global Compact

As already mentioned above, there is a great need for an internal UN learning network
complementing the GC learning forum available for business. Such a learning network
should focus on best practices of the UN in dealing with business. It might include
experiences of managing the Global Compact and partnership projects at the country level
as well as internal change initiated through the cooperation with business. This is necessary
in order to achieve the internal change process expected from Kofi Annan and from many
stakeholders. Thereby, the format of Global Compact examples (not more than 500 words)
should be preferred in line with the limited time available to make use of this mechanism. A
best practice introduced by UNIDO Thailand, was to assess and list their partnership
projects with business by sorting them under the Global Compact’s principles
addressed.Such a web-based UN learning forum could be based in a separate section of the
new Global Compact website, parallel to the Learning Forum for business. A UN Learning
Forum would give local Global Compact initiatives the opportunity to learn from other
countries.

3. Financially Sustainable national Global Compact

In the three countries were the project operated Global Compact structures are becoming
very dynamic and all participants in those networks have high expectations of what the
Global Compact can achieve in their country. The business community is expecting a lot
from UN leadership and the success of national Global Compact networks may well depend
on the capacity of the UN teams and of other partners to dedicate staff time and resources
to the maintenance and development of the network. The three countries we visited are
struggling to identify the right individuals to lead the process. But even more important UN
and business leaders are concerned about the lack of resources to implement the Global
Compact at the field level. The creation of national Global Compact trust funds or the joint
financing of a full time staff in charge of such networks and reporting to advisory councils
could be options to explore.

4. Awards and “quality management“

In each country businesses asked if the Global Compact would honour the best performance
of Global Compact participants with a yearly award. Depending on the local culture, such an
award would create an additional incentive for activities and a recognition of good examples
of positive change.

Furthermore, this idea leads towards the question of the criterion for the best Global
Compact practices. It is certainly up to the Global Compact Office to define what constitutes
                                                                                            8
a “high quality Global Compact partnership project“ or the “most valuable learning
experience“. A panel of experts composed of all stakeholders or the advisory council could
be selecting the examples to be recognised in a local Global Compact forum. Given its
proper composition, such a panel would also have the expertise and legitimacy to select the
companies to present their projects in a local learning forum.

5. Global Compact Guidebook

With a view to the urgent need for further clarification and guidance on the Global Compact
and its implementation, in developing countries, the project team suggests that the main
stakeholders compile an appropriate guidebook. The main clients of such a guidebook,
which should be written in a very practical manner, would need to be UN staff in country
teams dealing with business as well as corporate executives interested in implementing the
Global Compact. Ideally, such a guide should take into account the special circumstances of
developing countries, should be based on field experience, should respect local (business)
culture and should be written in a language that attracts UN officials and business leaders
equally and is easily understood by both.

6. Sustainability of the project

At the end of each learning event participants had a chance to fill in evaluation forms and
give feedback. Overall the evaluation of events has been very positive with an average of
90% of the participants who found worthwhile to attend the workshops and an average of
80% of the participants who found the workshops relevant to their work. 10 Considering these
positive results, UNSSC took the lead to raise funding to ensure the continuity of such an
important learning initiative that fits its mandate At the end of September 2002 UNSSC can
report that funding is mainly secured to offer learning services to three new countries in
2003. While UNSSC has now the financial capacity to continue the project, support from the
business community still need to be identified. Indeed, during the three missions both the UN
and the business “clients” appreciated to interact with a team representing a partnership and
contributing knowledge from both sector. At this point it would be useful to explore again with
UNV if UNSSC could benefit again from the services of a business volunteer. A senior
retired business leader could be very valuable in that position. In October 2002 the Global
Compact Office, UNDP and UNSSC will discuss more in details future collaboration and
work plan for 2003.

F.        Conclusion

The impact of the Global Compact Development Project should be evaluated from different
viewpoints:

      1. Building the capacity to deal with the challenges of implementing the Global Compact
         was the primary goal of this project. However, it is important to recognise that this is
         a starting point of a greater long-term change process. Indeed, creating capacity in
         this context means changing perceptions, transforming mindsets and questioning
         organizational culture, both for business and for the UN. Such an ambitious vision will
         take time to become a reality. In that respect, the project essentially played a catalytic
         role.

      2. Besides the impact that the project was able to make in the three counties, it aimed
         to provide the main stakeholders, namely the Global Compact Office, the UNDP
         Bureau for Strategic Partnerships and the International Chamber of Commerce, with
         experiences gained from a long field mission. From this viewpoint, the Global
         Compact Development Project contributed to the development of a better
10
     Details of evaluation results and reports of each event can be requested at b.magarinos@unssc.org

                                                                                                     9
   understanding of the complexity and specific challenges of national Global
   Compact networks.

3. In its activities, the project tried to highlight the strong contribution of the Global
   Compact approach to sustainable development. This was done though the
   encouragement of local business leaders to share their best practices with others and
   by initiating learning about ways to supply the emerging demand in a changing global
   business environment to produce not only economic, but also social and
   environmental value and quality. Due to the given period of time, the immediate
   impact of the project on sustainable development is of course limited. However, the
   project was not designed to generate short-term success only, but to sow the seeds
   of greater future benefit after the project mission.

4. The philosophy of the project should be understood within UNSSC’s mandate of
   transforming the UN management culture and leadership style. Indeed, UN staff
   working in partnership situations and implementing the Global Compact are creating
   new ways of conducting the daily work of UN country offices. The project had, without
   any doubt, a strong impact on the UN staff who benefited from learning events and
   coaching. In many cases the team invited them to take more “risks” or at least to try
   out their ideas.

   The visit of outsiders to Country Teams helped them to reflect on their usual way to
   deal with business and on how they could improve. In many cases the project team
   facilitated learning on creativity and self-assessment and encouraged Country
   Teams to keep working actively in this new environment. The team worked with very
   dedicated staff members who began to build a new management culture. In a way
   the implementation of the Global Compact at the country level represents much more
   then another phase of the UN reform: this is a UN revolution that will lead to a more
   dynamic and responsive UN.

5. The project aimed to support and encourage business in developing countries to
   work towards the broader goal of sustainable economic development with ultimate
   benefits for local societies. This was mainly done by demonstrating to local
   companies the incentives and benefits of becoming engaged in the Global Compact
   initiative and by providing support and building the necessary capacity.

   By doing so, the team hoped to encourage SMEs in particular to go public with their
   best practices, locally and through the Global Compact website, not only in order to
   be rewarded by increasing their individual profile but also to demonstrate the
   progress currently taking place in developing countries with a view to transforming
   the Compacts’ nine principles into good practice. The fact that a Global Compact
   company acted as a catalyst in this process and benefited companies in developing
   countries might be seen as a form of business-to-business assistance for sustainable
   development and good corporate citizenship.




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                           Global Compact Development Project
                                 www.unglobalcompact.org




                                      Dr. Bérangère Magarinos
                                        Partnerships Project
                                      b.magarinos@unssc.org




                                             BASF
                                      BASF Aktiengesellschaft

                                          Dr. Andreas Blüthner
                              International Economic Affairs Department
                                        a.bluethner@basf-ag.de




                           With the collaboration and support of




                                        Casper Sonesson
                               UNDP Bureau for Strategic Partnerships
                                   casper.sonesson@undp.org



The project team would like to thank our friends and colleagues from the UN, business, labour and civil
                     society for their strong support during the project missions.




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