GE, one of the world’s largest companies and one active in many sectors of the global economy, engages in public policy discussions that impact our Company, our workers and our communities.
GE approaches public policy through education, engagement, involvement and thought-leadership. We seek to inform discussions by promoting thoughtful civil discourse grounded in strong, reasoned analysis. We work in partnership with governments, believing that tackling the world’s biggest problems will be possible only if governments and industry work together as partners. Each year, GE evaluates public policy priorities for the upcoming year. The GE team reviews a number of factors, including the potential reputational effects and risks of pursuing or not pursuing a particular priority. We set commercial priorities to increase shareowner value, mindful that our commercial success depends upon progress on broader public policy imperatives.
GE has been actively engaged in discussions of global economic reform in such areas as energy, healthcare, financial services, international trade and investment, tax, and government procurement. We continue to be committed to engaging with governments—globally, nationally and locally—through constructive dialogue, the promotion of innovative public policy ideas, the formation of novel public-private partnerships, and investments in solutions that can help address the fundamental challenges that confront societies.
Learn more about our policies, positions and statements.
GE’s day-to-day experiences around the world testify to the critical importance of rule of law. Those societies that have strong, predictable and transparent legal institutions and processes engender confidence, investment and growth. By contrast, those with weak institutions and processes tend to lag in economic development and political stability. GE works actively to support stronger rule of law around the world. Key areas of focus include anticorruption; legal and administrative transparency and predictability; independent judiciaries; and fair and effective dispute resolution. GE’s rule-of-law efforts begin with our daily business activities around the world, which are predicated on a strong culture of compliance. GE’s employees further contribute to strengthening rule of law, as does the GE Foundation.
Recent GE activities in the area of rule of law include:
- GE’s global public policy and national executive teams and the GE Foundation have been actively engaged in supporting rule-of-law efforts in developing countries around the world, ranging from Albania to Yemen, in partnership with Partners for Democratic Change. Partners’ innovative approach to rule of law is based on the establishment of self-sustaining “conflict resolution centers,” which seek to manage and mediate the conflicts and changes that arise as countries transition to more democratic systems.
- GE and GE Foundation have been leading sponsors of the World Justice Project, a global effort to strengthen rule of law, including through the creation of a “Rule of Law Index”—a quantitative methodology for evaluating a country’s rule of law based on its respect for human rights, access to justice, regulatory framework for investors, transparency and curbing of abuses of government power.
- GE and GE Foundation have worked to strengthen rule of law in Vietnam. Through a grant made to the U.S.-Vietnam Trade Council Education Forum, GE has helped support efforts by Vietnamese state-government agencies, nongovernmental organizations (NGOs), business associations, academic institutions and others to increase regulatory transparency and public participation in law- and rule-making processes. In this GE Foundation–supported program, there was increased focus on Vietnam’s 2011 energy legislation.
- GE has taken a leadership role in the B20 Working Group on Improving Transparency and Anticorruption, which fosters cooperation among G20 country business communities and governments in the global fight against corruption.
In addition to these activities, GE also regularly raises rule-of-law issues in regional dialogues, such as the Transatlantic Business Dialogue, the Americas Competitiveness Forum and APEC, to encourage regulatory reform and harmonization, and the establishment of regional programs to promote rule of law.
Learn more about rule-of-law issues on the GE Foundation website.
Just as “green is green” when it comes to reducing carbon footprints, we believe that respect for human rights is both a responsibility and a sound business strategy, especially because many of the products we produce—clean water, energy, healthcare technology—are, at a minimum, human rights enablers.
In June 2011, the UN Human Rights Council adopted the Guiding Principles on Human Rights, developed under the direction of John Ruggie, special representative of the UN Secretary General for business and human rights. The Guiding Principles are built on three pillars: states’ duty to protect human rights, business entities’ responsibility to respect human rights, and the obligation of both to provide remedies for deprivations of human rights. Through our membership in the Global Business Initiative on Human Rights (“GBI”), GE was fortunate to contribute to the six-year process that culminated in these Guiding Principles. Our Statement of Principles on Human Rights has been drafted to reflect GE’s obligation to respect human rights in our global operations.
Historically, laws pertaining to human rights have largely been addressed directly to governments. Our Statement of Principles notes this, but also acknowledges that corporations have an important role to play in respecting human rights. However, human rights law as related to corporations is evolving such that at the state, federal and international levels, certain human rights protections are becoming the subject of legislation or transnational covenants. These impose extraterritorial reach, and extend beyond the corporate enterprise to include, for instance, reporting responsibility for companies’ supply chains. A couple of examples will illustrate this trend.
A little-observed provision of the 2010 Dodd-Frank Act, which was passed by the U.S. Congress in response to the fiscal crisis, requires U.S. corporations to disclose use of “conflict minerals” in their products. Conflict minerals are gold, tungsten, tantalum and tin, that are mined in certain regions within the Democratic Republic of the Congo (DRC). Our Washington office has been very active in making recommendations that respond to the intent of this legislation while allowing for practical compliance. Our sourcing operations at each GE business have begun efforts to identify the origins of these minerals when used by GE, so that we can fulfill our disclosure obligations when required to do so.
At the U.S. state level, California has passed legislation known as the California Transparency in Supply Chain Disclosure Act, which responds to the all-too-prevalent use of child labor around the world. This new state law requires businesses selling products in the State of California to disclose certain practices they use to detect and prevent the use of child labor in their product supply chains. Accordingly, our Citizenship Report has been amended to disclose our efforts in this regard. GE seeks to make a positive difference in the communities in which we operate and in the products we produce. As in the case of this new child labor legislation, GE often has practices and policies already in place that touch upon human rights well in advance of our being legally required to create them. That’s part of being a good corporate citizen.
Beyond U.S. state and federal law, the UN Guiding Principles are serving as a consensus standard for the formulation of international norms and as a template for nations in enacting legislation on human rights as an integral element of corporate social responsibility (CSR). In the former context, new OECD guidelines have been issued on business and human rights that closely align with the Guiding Principles. In time, we can expect to see claims of human rights deprivations brought through OECD National Contact Points. In the latter context, the European Commission is endeavoring to draft CSR legislation for its members. And in China, the national government is increasingly focused on CSR, including human rights and business issues. In October 2011, GE hosted a delegation of Chinese state-owned enterprises at Crotonville, N.Y., that had sought out GE for the purpose of understanding our approach to CSR, including our approach to human rights. Their intent was to establish CSR standards for Chinese state-owned enterprises.
Response to Increasing Legislative Mandates on Human Rights
We have responded to the recent increase in mandates by increasing our focus on human rights in ways that respond to the greater accountability required of businesses; by helping to formulate reasonable and practical business norms; and by learning more about the human rights risks we face in emerging markets, where human rights are often under pressure but also where our own growth is likely to accelerate.
On accountability… We have engaged Corporate Audit Staff (CAS) to undertake a “state of play” audit at each of our major businesses, to survey the steps each has taken to operationalize the Human Rights Implementing Procedures issued in 2009. Among other things, CAS has audited the practices highlighted in the Procedures, calibrating the level of staff training and looking at steps being taken to comply with the disclosure requirements for conflict minerals. CAS will look into business responses to ombuds complaints in which employees or business partners have raised human rights issues.
On formulating practices… We are engaging with nearly two dozen multinational companies (MNCs) to develop best practices that respond to the UN Guiding Principles in the context of contractual relationships. In this broader program, GE has taken a particular interest in developing best practices when dealing with state-owned enterprises in which GE is a minority joint venture partner. We are partnering in several such relationships and sharing ideas with other MNCs about due diligence, compliance, audit rights and other operational mechanisms that address legal compliance with hard-law issues such as bribery, money laundering and fraud prevention. These efforts seek to place us in a position to work with our direct business partners to heighten awareness of human rights issues that might otherwise be obscured by custom, culture or a lack of understanding or commitment.
On understanding emerging markets… GE is one of the founding members of the Global Business Initiative (GBI) on Human Rights, a global organization of MNCs that includes companies from such emerging markets as Brazil, Singapore, India and Colombia. The goal of GBI is to convene meetings in emerging markets and include local business enterprises in a discussion of human rights and business. One such meeting was held in Cairo, Egypt, only one month prior to the Arab Spring uprising. During the meeting with Egyptian business leaders, we were struck by how grateful the Egyptian business executives were to have a forum in which to discuss human rights. These comments were immediately followed by cautionary statements, however, about how such comments must be kept within the four walls; human rights in business was not a topic of acceptable discourse in broader Egyptian society. As a participant, one had a sense of what our Egyptian business associates meant. It was only six weeks later, however, that the true meaning of their words became apparent. In another meeting in Kuala Lumpur, Malaysia, we were able to engage with UN Global Compact members and local business leaders to discuss the unique human rights issues that confront MNC manufacturers in Southeast Asia. In December, the GBI convened a meeting in Nairobi to discuss the unique human rights challenges of doing business in Kenya. It was inspiring to observe our efforts at due diligence and stakeholder engagement with respect to ongoing efforts in Kenya to address energy and water deficiencies through a large wind-energy project and partnering on the Habihut Water Kiosk Project.
Learn more about human rights.
Together with other companies, nongovernmental organizations (NGOs) and governments, GE is expanding efforts to address concerns about the use of “conflict minerals”—minerals mined in the Democratic Republic of the Congo (DRC) and in the surrounding region—in our supply chains. These materials—tin, tantalum, tungsten and gold, whose extraction and trade can support armed groups in these regions—are mixed with material from other sources as they move from the DRC into global processing and manufacturing operations. Tin, tantalum, tungsten and gold sourced from global markets are used in GE products, ranging from our lightbulbs and medical devices to our wind turbines and jet engines. Because of the possible connection, however distant, between our products and the conflict in the DRC, we have committed to improving our conflict-free sourcing practices.
The armed groups operating in the eastern DRC, including units of the Congolese military, local militias, and Congolese and Rwandan rebels, control many of the region’s mines and continue to engage in armed conflict, as well as some of the world’s worst human rights violations, despite the formal end of the civil war in the DRC in 2003. As a result, the UN’s special representative on sexual violence in conflict called the country the “rape capital of the world” in 2010, while the International Rescue Committee noted that ongoing fighting caused more than 5.4 million deaths in the decade between 1998 and 2008, making it the world’s deadliest conflict since World War II.
These armed groups illegally tax the extraction and trade of local minerals and other natural resources. Although no armed group is wholly dependent on this income source, it makes up a significant portion of many of the groups’ funding, and it is hoped that efforts to cut off this flow of funds will help reduce the conflict. At the same time, however, most of these natural materials also support the livelihoods of hundreds of thousands of people in the DRC and elsewhere in central Africa.
Recognition of the link between the global minerals trade and the financing of armed groups in the DRC has driven GE and other companies to develop processes to identify their use of potential conflict minerals and to find ways to sever the link between these minerals and armed groups. In mid-2010, the U.S. government provided further impetus by passing legislation (Section 1502 of the Dodd-Frank financial reform legislation) that requires companies to publicly report on their use of conflict minerals and their efforts to reduce it.
GE condemns the use of minerals revenue to fuel ongoing conflict in the DRC and is committed to supporting efforts that address the funding and root causes of this conflict. We encourage conflict-free mineral sourcing from the region, as we believe that responsible sourcing can support local economies, development and livelihoods. Accordingly, GE has adopted a Conflict Minerals Statement of Principles that includes a series of commitments to take action on this issue, including working toward the elimination of all conflict minerals in our products, support for industry initiatives and conflict-free local sourcing. We have taken a series of steps and been active in a variety of forums to help fulfill each of our commitments, as outlined below.
We have participated with a group of companies, NGOs and socially responsible investors in an effort to provide advice and comments to the Securities and Exchange Commission (SEC) to assist in crafting and implementing regulations for Section 1502 of Dodd-Frank. This multistakeholder group has advocated for regulations that will effectively accomplish the objectives of the legislation in a manner that recognizes the practical difficulties that face all interested parties. GE also participated in an SEC roundtable on conflict minerals in October 2011, at which company representatives and government officials discussed their experiences in working to apply Dodd-Frank Section 1502.
GE is also developing a program that would 1) implement appropriate due diligence processes regarding the origin of tin, tantalum, tungsten and gold in our supply chain; 2) strive to eliminate those materials that may be supporting the conflict in the DRC; and 3) encourage our suppliers to make similar commitments and take similar measures. To support this work, we are participating with approximately 30 leading global companies in the OECD’s pilot program to implement the OECD conflict minerals due diligence guidance.
In addition, GE is involved in industry-wide initiatives to verify if smelters are conflict-free and to track conflict-free ores in Central Africa, in order to enable continued sourcing from the region. These efforts include:
- GE and the GE Foundation support the efforts of the Electronics Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) in establishing a “Conflict-Free Smelter” program (CFS Homepage) in which metals smelters are audited to verify the origins of their tin, tantalum and tungsten ores.
- The GE Foundation supports the Conflict-Free Smelter Early-Adopters Fund (CFS Early-Adopters Fund), administered by RESOLVE. The fund promotes early participation of smelters and refineries in the Conflict-Free Smelter Program, with the ultimate goal of encouraging responsible sourcing by supporting capacity-building in the supply chain for the procurement of conflict-free minerals. The fund supports early adopters of the CFS Program by offsetting a portion of the transition or start-up costs associated with passing a first-year audit.
- GE is working collaboratively across industries and with multiple stakeholders to share information, support traceability efforts and supply chain due diligence, and assess where we can contribute to greater stability and well-being in the DRC. Included in these efforts is GE’s participation in the Public-Private Alliance for Responsible Minerals Trade (PPA) (State Department remarks on PPA), a roundtable, multistakeholder group that is working to establish verified conflict-free supply routes in the DRC, and that aims to build capacity for miners in the DRC and in surrounding countries to respond to the challenge of conflict minerals.
GE will continue to engage in responsible mineral sourcing as laid out in our Conflict Minerals Statement of Principles, and we will focus on continually improving our processes in conflict-free sourcing in partnership with other companies, NGOs, SRIs, national governments and other stakeholders.
Learn more about conflict minerals.
GE’s Board of Directors believes that it is in the best interests of its stakeholders for GE to promote sound public policies at the international, national and local levels. To this end, GE government affairs and policy asks each of the company’s business teams to provide a semiannual assessment of their legislative and regulatory priorities. The Global Government Affairs and Policy team does this as well, both regionally and globally. Each business provides a description of public policy priorities, ties these to a GE objective and provides input on the significance of the issue(s) to the Company. The businesses also provide input on the appropriate advocacy plan or strategy for achieving a successful outcome—including whether or not GE will advocate for a priority directly or through one of its trade associations or industry coalitions. We work through these associations to facilitate coordination with other companies with similar priorities, and in situations where their reputation, effectiveness, expertise and relationships can assist us in achieving the company’s goals. Once each business has rolled up its priorities, the government relations team uses this list to determine GE’s overall public policy priorities for the upcoming year. These priorities are then reviewed regularly to take into account new and changing circumstances.
In evaluating the public policy priorities for the upcoming year, Government Affairs and Policy works with GE senior management to review a number of factors, including potential reputational consequences and risks of pursuing or not pursuing a particular priority. We set commercial priorities to increase shareowner value, mindful that our commercial success depends upon progress on broader public policy imperatives. This process takes into consideration GE’s strategic objectives, and there is no pre-assigned formula for determining GE’s public policy priorities or advocacy strategy. Although deal approvals or other onetime matters can sometimes become priorities, tax, trade, rule of law and intellectual property protections typically top our list of public policy priorities.
2012 GE public policy priorities:
- Intellectual property protection
- Free trade
- Tax reform
- Promotion of exports, including Export/Import Bank reauthorization
- Regulations associated with financial services reform and healthcare reform
- Advanced propulsion for military aviation
- Data-privacy and -protection legislation
- Rule of law, globally
- Patient safety
- Access, quality and cost reforms in healthcare
- Access to critical manufacturing materials
- Cyber security
- Natural gas policy
- Advanced manufacturing
- Development policy
- Global environmental and energy policies
Energy is a vital, essential element for economic growth, security and prosperity. As the United Nations explains in the Secretary General’s Sustainable Energy for All Initiative:
“Without access to modern energy, it is not possible to achieve the Millennium Development Goals, the eight-point global agenda adopted by the United Nations in 2000—whether reducing poverty, improving women’s and children’s health, or broadening the reach of education. Energy facilitates social and economic development, offering opportunity for improved lives and economic progress.”
Indeed, reliable and affordable energy is the critical building block for any society, and without it sustainable economic growth is impossible.
However, notwithstanding its criticality, energy production and use, particularly the use of fossil fuels—coal for electricity generation and petroleum for transportation—can have environmental consequences that no modern, competitive nation can responsibly ignore. The scientific consensus supports the conclusion that electricity generated in conventional coal plants and petroleum used for transportation fuel produce large amounts of carbon dioxide that bring out the serious consequences of rising atmospheric and oceanic temperatures.
Given this, GE supports policies that promote lower carbon emissions and also promote sustainable economic growth. We believe that the most efficient such emissions policy, whether implemented on a global or national basis, would be implementing a market-based price on carbon. In our view, such a policy could only stimulate the deployment of cleaner, more efficient technologies in both the power and transportation sectors, but we also believe that the implementation schedule must be realistic and achievable, taking into account economic impacts. Seeking to move too fast and without appropriate regard for the costs and economic effects will result only in continued inaction at both national and international levels. The policy must also include a workable safety valve to account for future economic uncertainties, but one that also assures reasonable certainty for the market, especially for the power sector, where capital investments may be used for 50 years or more.
We support the increased use of natural gas for electricity generation and for transportation to reduce carbon emissions. Abundant and affordable natural gas from shale can reduce carbon and other emissions significantly in power generation and can do so cost-effectively, thus assuring economic growth and reliable electricity for consumers, both of which are essential in this time of economic and financial uncertainty. We believe that shale gas can be developed in an environmentally responsible manner, and we support policies and measures that would minimize risks to ground and surface waters and that would reduce the fugitive emissions of methane associated with production of this resource. Switching from other fuels to natural gas should be encouraged and incentivized in countries, including the United States and China, where new technologies make this fuel abundant and competitively priced.
Other low-carbon energy technologies should also be promoted, as we should avoid reliance on any one fuel for use in power generation. It is essential to encourage the use of renewables, especially wind and solar energy, to reduce carbon emissions and to promote the integration of natural gas technologies with renewables, which would assure the required reliable and flexible generation of electricity. New nuclear technology remains a viable energy source for a low-carbon and secure-energy future. Coal should and will continue to be used to generate electricity, especially in some of the most rapidly developing countries. While continued use of coal for electricity generation is unavoidable, efficiency, carbon capture and sequestration should be encouraged and incentivized when coal is used in new deployments. And where it can be done economically, older and less efficient coal units should be retired.
In sum, a balanced and economically sustainable program that reduces carbon emissions needs to become a global priority and a national priority in all major emitting nations. Ideally, such reductions should start sooner rather than later, to increase the chances of averting the worst effects of climate change. At the same time, any policy needs to be sustainable, and to be sustainable any policy must have a realistic timetable for reductions and must recognize and minimize costs and economic impacts.
Addressing Healthcare Reform
Improving the effectiveness and efficiency of healthcare systems is essential for the long-term vitality of the global economy. While many healthcare systems have achieved impressive results and innovation, opportunities remain to make healthcare more accessible and equitable, less costly and reactive, and more patient-centric.
GE understands the need for local solutions to local healthcare challenges, and is an active partner of many associations, foundations and research institutes that work on the key healthcare issues facing many countries. Governments around the world are bringing basic health insurance coverage to hundreds of millions of citizens each year, and strengthening their countries’ primary care delivery systems. GE is working with these governments to offer low-cost diagnostics and other tools to populations with limited numbers of medical professionals and insufficient healthcare systems.
Appropriate public policies can provide faster access to world-class medical technologies for patients who need them. Therefore, GE Healthcare is committed, as an active partner, to providing constructive input to policy makers. Specific elements of GE’s healthcare policy agenda include:
- Support for universal and affordable coverage. All individuals, where it is relevant in their healthcare systems, should be able and encouraged to purchase health insurance coverage that works for them. To do so, consumers must be able to choose among affordable benefit plans that meet their personal healthcare needs and their financial means.
- Support for reducing healthcare costs, improving quality and increasing access to care
- Support for playing a leadership role in advocating for more innovative reimbursement methods and increased specialization through targeted care–area approaches to cancer, heart disease, stroke and other diseases
- Support for public policy addressing the development and delivery of early-detection and wellness programs in both the public and private sectors, and for permitting the use of meaningful incentives that encourage healthy lifestyle choices and behaviors. Prevention and early detection are critical elements in ensuring quality healthcare and controlling costs.
- Support for liability policies that address fairly the weakness in the medical-liability system
- Support for incentivizing the delivery of effective and coordinated care, utilizing health information technology to reduce healthcare costs through a patient-centered, evidence-based integrated delivery system
- Support for the creation of new medical infrastructure and teaching hospitals in public-private partnerships as creative solutions to offer low-cost healthcare solutions to developing countries
- Support for governments to make transparent healthcare coverage or reimbursement decisions and to create opportunities for input from stakeholder groups in healthcare, such as physician and patient groups, industry initiatives and civil society
Learn more about healthcare.
As the global economy continues to recover, GE is working to promote public policies that will help ensure stronger growth in the short term and sustained growth in the long term. In particular, GE engages globally on issues such as trade, government procurement, rule of law, energy, healthcare and financial services. GE seeks to inform policy makers of the practical implications of proposed initiatives, as well as the costs of inaction. While we are pleased that these dialogues are taking place, we remain mindful of the fundamental challenges confronting the United States and international economies.
One area on which we continue to be particularly focused is sustaining economic growth through international trade. GE has long been an advocate of open markets at home and abroad, and we will remain so. We applaud the Obama Administration for its commitment to negotiating strong free-trade agreements with Pacific Rim economies and the European Union. Trade and investment are key to global economic growth, and we believe that adopting policies that enhance international trade and investment will strengthen the global economy, raise standards of living, spur innovation and help alleviate poverty.
GE’s global public policy commitments include:
- Open Markets: Promote policies that encourage a “level playing field” in global markets, including trade liberalization, market access and investment protection.
- Technology & Innovation: Promote policies that create (and safeguard) an enabling environment for technology development and innovation around the world.
- Rule of Law: Support the development and maintenance of laws and institutions necessary to provide predictability and stability to open markets, with particular emphasis on transparency, procurement rules and dispute resolution.
Ultimately, GE believes that governments should enhance the health and education of their citizens, build necessary trade-related infrastructure, adopt prudent fiscal and monetary policies, and improve the capacity of their citizens to compete in an increasingly integrated global economy.
GE has decided not to do business in certain countries because of the reputational and business risks involved. GE evaluates such countries on an ongoing basis, consistent with applicable law.
Consistent with applicable law, GE does not do business in any country designated as a State Sponsor of Terrorism by the U.S. Department of State. These countries include Cuba, Iran, Sudan and Syria. The Company will not accept any business in these countries, unless it is licensed by the U.S. government for humanitarian or public policy purposes. This policy also applies to North Korea.
Given recent events in Myanmar, including the transition to a civilian government and steps toward democratization, such as the elections on April 1, 2012, GE has revised its policy to permit broader GE business activities in Myanmar. All GE businesses (including all entities owned or controlled by GE worldwide) are now allowed to conduct business in Myanmar provided that no GE business engage in any activities prohibited under (i) U.S. law, regardless of whether U.S. jurisdiction actually applies, or (ii) other applicable local law.