4E: OECD GUIDELINES ON MULTINATIONAL ENTERPRISES

The OECD Guidelines for Multinational Enterprises were drawn up in 1976 by the Organisation for Economic Co-operation and Development to assist corporations to maintain certain standards seen by governments as essential to good governance, particularly in relation to investment. They cover a range of issues, including labour  and human rights, consumer protection, bribery and corruption, taxation, the  environment and information disclosure. 

The Guidelines are voluntary and not binding on corporations and therefore it is up to the latter to decide to abide by some or all of the Guidelines. 

The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multi-national enterprises operating in or from adhering countries. They provide non-binding principles and standards for responsible business conduct in a global context consistent with applicable laws and internationally recognised standards. The Guidelines are the only multilaterally agreed and comprehensive code of responsible business conduct that governments have committed to promoting.
Foreword to the Guidelines, 2011

At the 50th Anniversary Ministerial Meeting in 2011, Governments adopted a new chapter to the Guidelines on human rights. This chapter draws in the main on the work of John Ruggie and the consequent United Nations Framework for Business and Human Rights, the ‘Protect, Respect and Remedy’ and is in line with the Guiding Principles for its Implementation. The new Chapter notes that “States have the duty to protect human rights” and that corporations should abide by the human rights obligations of the countries in which they are present. Thus, they should respect and protect human rights and should take part in remediation where their activities lead to human rights abuses.

One important aspect of the Guidelines is the creation of National Contact Points (NCP) in each of the OECD countries. These are designed to promote and implement the Guidelines. In many instances, they consist of a single staff member from – usually –  the treasury or the finance ministry. One important function of the NCP is to provide a forum to mediate and conciliate in case of complaints that a specific corporation has not abided by the guidelines. With the inclusion of human rights in the Guidelines, this provides an avenue for the lodging of complaints by human rights defenders. First, the complaint (called the ‘specific instance’) is lodged. If the NCP decides it has merit, it will contact the company and depending on the circumstances, will host a meeting of the company, the complainant party and possibly a representative of the government of the country of the NCP. The NCP then produces a report which is made available to the parties for possible further mediation.

NATIONAL CONTACT POINTS AND THE COMPLAINTS PROCEDURE

National Contact Points (NCPs) are responsible for encouraging observance of the Guidelines in a national context and for ensuring that the Guidelines are well known  and understood by the national business community and by other interested parties.  The NCPs also deal with “specific instances”, which is the term used for complaints.

If the parties involved do not reach an agreement with regard to the specific instance, the NCP is required to issue a statement. However, NCPs do not monitor whether or  not companies are following the Guidelines.

NCPs should respond to enquiries about the Guidelines from other NCPs, the business community, employee organisations, NGOs, the public and governments  
from non-adhering countries. NCPs have the right to screen cases, that is decide if they are admissible or not through the initial assessment procedure.
When a party raises a case, the NCP is required to make an initial assessment of whether the issue raised merits further examination and respond to the party. Generally, issues are dealt with by the NCP in whose country the issue has arisen. If there is no NCP in that country, cases can instead be brought before the NCP of the country where the company is headquartered. The institutional set up of the NCP differs from country to country: most NCPs consist of a single government department, while some consist of multiple government departments, some tripartite and some quadripartite. Therefore, there is an obvious risk that NCPs make different initial assessments. After completion of the initial assessment, the focus is on problem solving with help from experts, stakeholders, other NCPs and through mediation with the parties involved.

Source: OECD Watch

ASSIGNMENT

• Read the human rights chapter in the OECD Guidelines on Multinational Enterprises 
• rite a submission to the National Contact Point complaining that a Company is in breach of the OECD Guidelines.

Activity

ROLE PLAY – THE NATIONAL CONTACT POINT HOSTS A MEETING

• Select three groups to play a) a representative of the Company, b) a representative of the Complainant, c) the designated National Contact Point Officer.
• Each group prepares arguments from their specific perspectives.
• Each group selects a spokesperson.
• The meeting is held.
• In plenary, discuss possible outcomes from the meeting.
• Discuss how these outcomes can be used to assist the Paga Hill communities.

References

• United Nations Global Compact
• The ILO Tripartite Declaration Concerning Multinational Enterprises and Social Policy
• The United Nations Norms on the Responsbilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights
• The OECD Guidelines for Multinational Enterprises (the class can be encouraged to research whether there have been complaints lodged with the National Contact Point  and what the outcomes have been).
• Guiding Principles on Business and Human Rights. 
• International Corporate Responsibility, Professor Paul Redmond, 2011 (see Appendix).