4. OECD Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are a set of non-binding
recommendations for responsible business conduct that the participating
governments address to MNCs which operate in or from their territory. The first
Guidelines were adopted in 1976, with the aim to improve the foreign investment
climate by strengthening cooperation among OECD Member States and reducing the
difficulties arising from the operations of MNCs. A revised version, adopted in 2000,
recommended MNCs to ‘respect the human rights of those affected by their
activities’ 124 for the first time. The latest revision in 2011 expanded this
recommendation by introducing an entire chapter on human rights. Echoing the
provisions of the Guiding Principles, it requests MNCs to respect human rights, avoid
causing or contributing to adverse human rights impacts, address and seek ways to
prevent or mitigate these impacts, have a policy commitment to respect human rights,
carry out human rights due diligence, and provide for remediation of adverse human
rights impacts. The 2011 revision also introduced a new approach to responsible
supply chain management, extending the Guidelines beyond the immediate
operations of the MNCs to their relations with e.g. subcontractors or franchisees.
Implementation of the Guidelines lies in the hands of the adhering states, the MNCs,
the National Contact Points (NCPs) and the Investment Committee. Each adhering
state is required to set up an NCP, tasked with promoting the Guidelines, handling
inquiries, and solving disputes. Their role, which has not been uniformly successful,125
was enhanced by the 2011 revision. If an issue arises under the Guidelines, they will
contribute to its solution by making an initial assessment, offering good offices, and
publishing the results of the procedure. If necessary, they are assisted by the
Investment Committee 126 which also provides advice on the interpretation of the
Guidelines. The outcome of these procedures is, however, necessarily non-binding
and the names of the companies involved are typically not disclosed in order to
protect confidential information. 127 Their effect has thus been characterised as
‘commercial rather than legal’.
5. ILO Tripartite Declaration of Principles Concerning Multinational Enterprises
and Social Policy
The ILO Tripartite declaration of principles concerning multinational enterprises and
social policy is a non-binding instrument which was adopted after tripartite
The OECD Investment Committee is tasked with the interpretation and implementation of the
Guidelines. It monitors the functioning of the Guidelines, provides a forum for discussion as well as for
dispute resolution, offers recommendations and issues reviews and analyses. The Committee was
established in 2004, merging the former Committee on International Investment and Multinational
Enterprises (CIME) and the former Committee on Capital Movements and Invisible Transactions (CMIT).
negotiations between workers’ and employers’ organisations and state governments
in 1977 and has since been amended twice in 2000 and 2006. 129 Reacting to
concerns about labour standards and social issues, the Declaration contains
principles on employment, training, conditions of work and life, and industrial
relations, which ‘governments, employers’ and workers’ organisations and
multinational enterprises are recommended to observe on a voluntary basis’. 130
Without providing for a complaints mechanism similar to the one under the OECD
Guidelines, the Declaration merely envisages periodic surveys in order to measure its
effectiveness and a clarification process, whereby the parties may submit requests for
interpretation to the ILO.
6. Global Compact
The Global Compact is a ‘soft law’ policy initiative for businesses which voluntarily
commit to respect and support ten principles in the areas of human rights, labour, the
environment, and anti-corruption, derived from the UDHR, the ILO’s Declaration on
Fundamental Principles and Rights at Work, the Rio Declaration on Environment and
Development and the UN Convention Against Corruption. The Global Compact was
announced by UN Secretary-General Kofi Annan in 1999 and was officially launched
in 2000. Today it counts more than 10,000 participants from over 130 countries,
making it the largest non-binding corporate responsibility initiative world-wide. 131
Companies have to submit an annual report on the implementation of the ten
principles, which, however, is not subject to any review mechanism and has
consequently been labelled a mere ‘public relations exercise’. 132 Supporters have
lauded its contribution to raising awareness for the underlying issues, however, critics
decry the lack of monitoring and audit, both for potential and current candidates.133
