The OECD Guidelines for The OECD Guidelines for Multinational EnterprisesMultinational Enterprises

Turin, 8 November 2007Turin, 8 November 2007

What are the OECD Guidelines for What are the OECD Guidelines for Multinational Enterprises?Multinational Enterprises?

Recommendations by governments Recommendations by governments to MNEs operating in or from the to MNEs operating in or from the following countries:following countries:the 30 OECD countries, Argentina, the 30 OECD countries, Argentina, Brazil, Chile, Estonia, Israel, Latvia, Brazil, Chile, Estonia, Israel, Latvia, Lithuania, Romania and SloveniaLithuania, Romania and Slovenia

Apply to corporate activities Apply to corporate activities worldwideworldwide

OECD member countriesOECD member countriesAustraliaAustraliaKorea Korea AustriaAustria LuxembourgLuxembourgBelgium Belgium MexicoMexicoCanada Canada NetherlandsNetherlandsthe Czech Republic the Czech Republic New ZealandNew ZealandDenmark Denmark Norway Norway Finland Finland PolandPolandFrance France PortugalPortugalGermany Germany the Slovak Republicthe Slovak RepublicGreeceGreece SpainSpainHungary Hungary Sweden Sweden Iceland Iceland SwitzerlandSwitzerlandIreland Ireland TurkeyTurkeyItaly Italy the United Kingdomthe United KingdomJapan Japan the United States the United States

What are the OECD Guidelines for What are the OECD Guidelines for Multinational Enterprises?Multinational Enterprises?

Not legally binding, but not voluntary Not legally binding, but not voluntary eithereither

Governments are legally obliged to Governments are legally obliged to set up National Contact Points (NCPs) set up National Contact Points (NCPs) to deal with specific problems to deal with specific problems regarding the Guidelines in individual regarding the Guidelines in individual MNEsMNEs

The contents of the GuidelinesThe contents of the GuidelinesII Concepts and PrinciplesConcepts and PrinciplesIIII General PoliciesGeneral PoliciesIIIIIIDisclosure of InformationDisclosure of InformationIVIV Employment and Industrial RelationsEmployment and Industrial RelationsVV EnvironmentEnvironmentVIVI Combating BriberyCombating BriberyVIIVII Consumer InterestsConsumer InterestsVIIIVIII Science and TechnologyScience and TechnologyIXIX CompetitionCompetitionXX TaxationTaxation

I Concepts and PrinciplesI Concepts and Principles

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

II General PoliciesII General Policies

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

II General PoliciesII General Policies

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

II General PoliciesII General Policies

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

III DisclosureIII Disclosure

Ensure that timely, regular, reliable Ensure that timely, regular, reliable and relevant information is disclosed and relevant information is disclosed regarding activities, structure, regarding activities, structure, financial situation and performancefinancial situation and performance

Apply high quality standards for Apply high quality standards for disclosure, accounting, audit and for disclosure, accounting, audit and for non-financial information such as non-financial information such as social reportingsocial reporting

IV Employment and Industrial IV Employment and Industrial RelationsRelations

Covers all Core Labour StandardsCovers all Core Labour Standards Provide facilities to employee Provide facilities to employee

representativesrepresentatives Ensure occupational health and Ensure occupational health and

safety in their operationssafety in their operations Employ local personnel and provide Employ local personnel and provide

trainingtraining

IV Employment and Industrial IV Employment and Industrial RelationsRelations

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

IV Employment and Industrial IV Employment and Industrial RelationsRelations

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

V EnvironmentV Environment

Reflects the principles and objectives Reflects the principles and objectives in the Rio Declaration in Agenda 21in the Rio Declaration in Agenda 21

Includes provisions on education and Includes provisions on education and training for workers on training for workers on environmental health and safetyenvironmental health and safety

VI Combating BriberyVI Combating Bribery

Not give or demand a bribe or make Not give or demand a bribe or make illegal contributions to political illegal contributions to political partiesparties

Enhance transparency, and use Enhance transparency, and use management control systems that management control systems that discourage briberydiscourage bribery

VII Consumer InterestsVII Consumer Interests

Provide accurate and clear Provide accurate and clear information regarding goods or information regarding goods or servicesservices

Apply transparent procedures to Apply transparent procedures to address consumer complaints and to address consumer complaints and to resolve consumer disputesresolve consumer disputes

Chapter VIII-XChapter VIII-XVIII Science and TechnologyVIII Science and Technology Adopt practices that permit transfer and Adopt practices that permit transfer and

diffusion of technologies and know-how diffusion of technologies and know-how in the countries where they operatein the countries where they operate

IX CompetitionIX Competition Refrain from anti-competitive activities Refrain from anti-competitive activities

like fixed prices and output restrictionslike fixed prices and output restrictionsX TaxationX Taxation Comply with tax laws and regulation Comply with tax laws and regulation

and provide information to authoritiesand provide information to authorities

BackgroundBackground The Guidelines were first approved The Guidelines were first approved

1976 1976 a reaction to the a reaction to the excessive influence by MNEs over excessive influence by MNEs over governmentsgovernments

Negotiations in the UN over a binding Negotiations in the UN over a binding code failedcode failed

Several cases on the Guidelines were Several cases on the Guidelines were resolved during the first 10 years resolved during the first 10 years after their adoptionafter their adoption

BackgroundBackground The Guidelines were revised in 1979, The Guidelines were revised in 1979,

1982, 1984 and 19911982, 1984 and 1991 Political climate changed in the mid-Political climate changed in the mid-

1980’s and they fell into disuse1980’s and they fell into disuse The failure of MAI and the fact that The failure of MAI and the fact that

corporate conduct was again on the corporate conduct was again on the agenda in the end of the 1990’s led agenda in the end of the 1990’s led to renewed interest in the Guidelinesto renewed interest in the Guidelines

The review of the Guidelines The review of the Guidelines 1998-20001998-2000

Took place in consultation with trade Took place in consultation with trade unions, business and NGOsunions, business and NGOs

Resulted in major improvements:Resulted in major improvements:- global applicability of the - global applicability of the Guidelines;Guidelines;- reference to the supply chain;- reference to the supply chain;- stronger language on human rights;- stronger language on human rights;

The review of the Guidelines The review of the Guidelines 1998-20001998-2000

- two new chapters on bribery and - two new chapters on bribery and consumer interests;consumer interests;

- reinforced chapter on environment; - reinforced chapter on environment; andand

- enhanced implementation - enhanced implementation proceduresprocedures

ImplementationImplementationThe OECD Council decided in June The OECD Council decided in June 2000 that every adhering country 2000 that every adhering country shall:shall:

Set up a National Contact Point (NCP) Set up a National Contact Point (NCP) to promote and implement the to promote and implement the GuidelinesGuidelines

Trade unions, business and other Trade unions, business and other interested parties shall be informed interested parties shall be informed of the availability of the NCPof the availability of the NCP

NCPs shall meet annually and report NCPs shall meet annually and report on their activitieson their activities

ImplementationImplementation

NCPs are expected to work by fourNCPs are expected to work by fourprinciples:principles: VisibilityVisibility AccessibilityAccessibility TransparencyTransparency AccountabilityAccountability

Procedural GuidanceProcedural Guidance

A Institutional ArrangementsA Institutional Arrangements

NCPs can be organised differently NCPs can be organised differently (tripartite, quadripartite or (tripartite, quadripartite or government office)government office)

NCPs shall develop and maintain NCPs shall develop and maintain relations with representatives of relations with representatives of trade unions, business and NGOstrade unions, business and NGOs

Procedural GuidanceProcedural Guidance

B Information and PromotionB Information and Promotion

NCPs are responsible for raising NCPs are responsible for raising awareness of the Guidelines including awareness of the Guidelines including informing prospective investors of informing prospective investors of themthem

NCPs shall respond to enquiries about NCPs shall respond to enquiries about the Guidelinesthe Guidelines

Procedural GuidanceProcedural Guidance

C Implementation in Specific InstancesC Implementation in Specific Instances

NCPs shall try to resolve issues that arise NCPs shall try to resolve issues that arise concerning the Guidelines in individual concerning the Guidelines in individual companiescompanies

In doing that, NCPs will:In doing that, NCPs will:- assess whether the case raised merits - assess whether the case raised merits further examination and respond to the further examination and respond to the parties raising it;parties raising it;

Procedural GuidanceProcedural Guidance

- offer a forum for discussion and - offer a forum for discussion and assist the parties involved to deal assist the parties involved to deal with the issue in an efficient and with the issue in an efficient and timely manner;timely manner;

- offer conciliation and mediation;- offer conciliation and mediation;- if the parties do not reach an - if the parties do not reach an

agreement, issue a statement and agreement, issue a statement and make recommendations;make recommendations;

Procedural GuidanceProcedural Guidance

- maintain confidentiality of the - maintain confidentiality of the proceedings; andproceedings; and

- make publicly available the results of - make publicly available the results of the proceduresthe procedures

D ReportingD Reporting NCPs shall report annually on their NCPs shall report annually on their

activitiesactivities

How do you raise a case with a How do you raise a case with a National Contact Point?National Contact Point?

1. Contact national trade union centre 1. Contact national trade union centre and/or global union federation to and/or global union federation to discuss how to proceeddiscuss how to proceed

2.2. Inform other relevant trade union Inform other relevant trade union organisations (TUAC and the organisations (TUAC and the national centre in the country national centre in the country where the company is based)where the company is based)

3.3. Submit the case to the pertinent Submit the case to the pertinent NCP(s)NCP(s)

A submission to an NCP should include:A submission to an NCP should include:

Accurate description of the caseAccurate description of the case Basic facts about the company Basic facts about the company

name and contact details, where it is name and contact details, where it is headquartered, responsible manager headquartered, responsible manager etcetc

Which paragraph(s) the company Which paragraph(s) the company is/are in breach ofis/are in breach of

Suggested action for the NCP to take, Suggested action for the NCP to take, eg to convene a meeting with the eg to convene a meeting with the parties involvedparties involved

Attachment of any supportive Attachment of any supportive evidenceevidence

Useful web sites:Useful web sites: www.oecd.orgwww.oecd.org www.tuac.orgwww.tuac.org