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The OECD Guidelines for Multinational Enterprises

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Presentation on theme: "The OECD Guidelines for Multinational Enterprises"— Presentation transcript:

1 The OECD Guidelines for Multinational Enterprises

2 What are the OECD Guidelines for Multinational Enterprises?
Recommendations by governments to MNEs operating in or from the following countries: the 30 OECD countries, Argentina, Brazil, Chile, Estonia, Lithuania, Slovenia and Israel Apply to corporate activities worldwide

3 OECD member countries Australia Korea Austria Luxembourg
Belgium Mexico Canada Netherlands the Czech Republic New Zealand Denmark Norway Finland Poland France Portugal Germany the Slovak Republic Greece Spain Hungary Sweden Iceland Switzerland Ireland Turkey Italy the United Kingdom Japan the United States

4 What are the OECD Guidelines for Multinational Enterprises?
Not legally binding, but not voluntary either Governments are legally obliged to set up National Contact Points (NCPs) to deal with specific problems regarding the Guidelines in individual MNEs

5 The contents of the Guidelines
I Concepts and Principles II General Policies III Disclosure of Information IV Employment and Industrial Relations V Environment VI Combating Bribery VII Consumer Interests VIII Science and Technology IX Competition X Taxation

6 I Concepts and Principles
3. «A precise definition of multinational enterprises is not required for the purposes of the Guidelines. (……) The Guidelines are addressed to all the entities within the multinational enterprise (parent company and/or local entities).»

7 II General Policies 2. «Respect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments.»

8 II General Policies 4. «Encourage human capital formation, in particular by creating employment opportunities and facilitating training opportunities for employees.»

9 II General Policies 10. «Encourage, where practicable, business partners, including suppliers and subcontractors, to apply principles of corporate conduct compatible with the Guidelines.»

10 III Disclosure Ensure that timely, regular, reliable and relevant information is disclosed regarding activities, structure, financial situation and performance Apply high quality standards for disclosure, accounting, audit and for non-financial information such as social reporting

11 IV Employment and Industrial Relations
Covers all Core Labour Standards Provide facilities to employee representatives Ensure occupational health and safety in their operations Employ local personnel and provide training

12 IV Employment and Industrial Relations
6. «In considering changes in their operations which would have major effects upon the livelihood of their employees…. provide reasonable notice of such changes… co-operate with the employee representatives and appropriate governmental authorities so as to mitigate to the maximum extent practicable adverse effects.»

13 IV Employment and Industrial Relations
7. «….while employees are exercising a right to organise, not threaten to transfer the whole or part of an operating unit from the country concerned nor transfer employees from the enterprises’ component entities in other countries…»

14 V Environment Reflects the principles and objectives in the Rio Declaration in Agenda 21 Includes provisions on education and training for workers on environmental health and safety

15 VI Combating Bribery Not give or demand a bribe or make illegal contributions to political parties Enhance transparency, and management control systems that discourage bribery

16 VII Consumer Interests
Provide accurate and clear information regarding goods or services Apply transparent procedures to address consumer complaints and to resolve consumer disputes

17 Chapter VIII-X VIII Science and Technology
Adopt practices that permit transfer and diffusion of technologies and know-how in the countries where they operate IX Competition Refrain from anti-competitive activities like fixed prices and output restrictions X Taxation Comply with tax laws and regulation and provide information to authorities

18 Background The Guidelines were first approved a reaction to the excessive influence by MNEs over governments Negotiations in the UN over a binding code failed Several cases on the Guidelines were resolved during the first 10 years after their adoption

19 Background The Guidelines were revised in 1979, 1982, 1984 and 1991
Political climate changed in the mid-1980’s and they fell into disuse The failure of MAI and the fact that corporate conduct was again on the agenda in the end of the 1990’s led to renewed interest in the Guidelines

20 The review of the Guidelines 1998-2000
Took place in consultation with trade unions, business and NGOs Resulted in major improvements: - global applicability of the Guidelines; - reference to the supply chain; - stronger language on human rights;

21 The review of the Guidelines 1998-2000
- two new chapters on bribery and consumer interests; - reinforced chapter on environment; and - enhanced implementation procedures

22 Implementation The OECD Council decided in June 2000 that every adhering country shall: Set up a National Contact Point (NCP) to promote and implement the Guidelines Trade unions, business and other interested parties shall be informed of the availability of the NCP NCPs shall meet annually and report on their activities

23 Implementation NCPs are expected to work by four principles:
Visibility Accessibility Transparency Accountability

24 Procedural Guidance A Institutional Arrangements
NCPs can be organised differently (tripartite, quadripartite or government office) NCPs shall develop and maintain relations with representatives of trade unions, business and NGOs

25 Procedural Guidance B Information and Promotion
NCPs are responsible for raising awareness of the Guidelines including informing prospective investors of them NCPs shall respond to enquiries about the Guidelines

26 Procedural Guidance C Implementation in Specific Instances
NCPs shall try to resolve issues that arise concerning the Guidelines in individual companies In doing that, NCPs will: - assess whether the case raised merits further examination and respond to the parties raising it;

27 Procedural Guidance - offer a forum for discussion and assist the parties involved to deal with the issue in an efficient and timely manner; - offer conciliation and mediation; - if the parties do not reach an agreement, issue a statement and make recommendations;

28 Procedural Guidance - maintain confidentiality of the proceedings; and
- make publicly available the results of the procedures D Reporting NCPs shall report annually on their activities

29 How do you raise a case with a National Contact Point?
1. Contact national trade union centre and/or global union federation to discuss how to proceed 2. Inform other relevant trade union organisations (TUAC and the national centre in the country where the company is based) 3. Submit the case to the pertinent NCP(s)

30 A submission to a NCP should include:
Accurate description of the case Basic facts about the company name and contact details, where it is headquartered, responsible manager etc Which paragraph(s) the company is/are in breach of

31 Suggested action for the NCP to take, eg to convene a meeting with the parties involved
Attachment of any supportive evidence

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