iii. OECD Guidelines for Multinational Enterprises
The Organisation for economic Co-operation and Development (OECD) is an international economic organisation with a mission to “promote policies that will improve the economic and social well-being of people around the word”, and a “commitment to market economies backed by democratic institutions”. 1 The organisation collects and analyses data in many fields of economic cooperation and development, 2 and provides a forum for the member countries to discuss common problems and develop policies.
The OECD was founded in 1960 by 18 european states along with the United States and Canada, and grew out of the Organisation for european economic Co-operation (OeeC), originally charged with administering the Marshall plan in post-war Europe. Its 34 members, 3 which are among the world’s most advanced economies today, are mainly Western states.
In 1976 the OECD adopted the OECD Guidelines for Multinational enterprises (the Guidelines), which constitute recommendations addressed by governments to companies operating in or from the adhering countries. 4 In addition to the 34 member countries of the OECD the following twelve countries adhere to the Guidelines: Argentina, Brazil, Colombia, Costa Rica, egypt, Jordan, Latvia, Lithuania, Morocco, Peru, Romania and Tunisia.
The Guidelines aspire to be “a leading international instrument for the promotion of responsible business conduct 5 ”, and are composed of a non-binding set of principles and standards for responsible business conduct in the following areas: information disclosure, human rights, employment and industrial relations, environment, combating bribery, consumer interest, science and technology, competition, and taxation. Despite their non-binding nature, the Guidelines are backed up by a complaint mechanism, called National Contact Points (NCPs), which are tasked with promoting the Guidelines to businesses and other stakeholders and handling cases of alleged breaches of the Guidelines by MNEs operating from or in these adherent countries (see chapter ii of this section).
In 2011, the Guidelines were updated for the fifth time. A key achievement of the 2011 update was the inclusion of a new chapter on Human Rights based on the corporate responsibility to respect Human Rights as set out in the UN Guiding Principles on Business and Human Rights 6 and new and comprehensive approach to due diligence and responsible supply chain management.
In November 2020, the OECD Working Party on Responsible Business Conduct agreed to undertake a stocktaking study on the 2011 version of the OECD Guidelines for Multinational Enterprises, to assess how the Guidelines have been used since 2011, including the strengths and challenges in implementation of the Guidelines over the past ten years, and assess whether they remain “fit for purpose” to analyse their sustainability for the future 7 .
The Guidelines are composed of two parts: the Recommendations themselves, hereunder presented in Chapter 1, and their implementation procedures, dealt with in Chapter 2.
Content and Scope of the OECD Guidelines
Part 1 of the Guidelines consists of eleven chapters covering the following topics:
- Concepts and Principles
- General Policies
- Human Rights
- Employment and Industrial Relations
- Combating Bribery, Bribe Solicitation and extortion
- Consumer Interests
- Science and Technology
Below follows a general description of the rights and obligations referred to in the Guidelines. For a detailed overview, read the original document to see the principles (or recommendations) and clarifying commentaries, which are placed after the principles in each chapter. 8
This chapter will firstly look at six specific areas covered by the Guidelines (A) (Human Rights, Fundamental Labour Rights, Disclosure, Environmental Protection, Bribery and Consumer Protection), before discussing the scope of the Guidelines (B).