| Summary of the OECD Guidelines for Multinational Enterprises |
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| 2009-05-14 09:38 |
The OECD Guidelines for Multinational Enterprises (MNEs) are recommendations to enterprises, made by the Governments of OECD Member countries. Their aim is to ensure that MNEs operate in harmony with the policies of the countries where they operate. These voluntary standards cover the full range of MNEs' operations.
Features
The Guidelines are a part of the Declaration on International Investment and Multinational Enterprises. The Declaration constitutes a political commitment, adopted by the Governments of OECD Member countries in 1976 with the objective of facilitating direct investment among OECD Members. The other parts of the Declaration deal with three related instruments, aimed at:
providing national treatment to foreign-owned enterprises;
promoting co-operation among governments in relation to international investment incentives and disincentives;
minimising the imposition of conflicting requirements on MNEs by governments of different countries.
The Guidelines are voluntary and, consequently, not legally enforceable. This, however, does not imply less commitment by OECD Governments to encourage their observance. The system under which the Guidelines are implemented is described below.
The basic approach of the Guidelines is that internationally agreed guidelines can help to prevent misunderstandings and build an atmosphere of confidence and predictability between business, labour and governments.
The Guidelines address the MNEs from OECD countries. However, reflecting the worldwide operations of MNEs, Member countries support international co-operation in this area to extend to all States, and in particular with developing countries with a view to improving the welfare and living standards of all people by encouraging the positive contributions of MNEs and minimising and resolving the problems which may arise in connection with their activities.
Coverage
The Guidelines are divided into separate chapters which cover the range of MNE activities. These chapters deal with: general policies, information disclosure, competition, financing, taxation, employment and industrial relations, environment and science and technology.
Introductory paragraphs explain the purpose, nature and scope of the Guidelines, making clear that they are addressed to MNEs and their entities, and that these entities should co-operate with each other to facilitate observance. The introduction also makes it clear that no different treatment between MNEs and domestic enterprises is sought. Wherever relevant, the Guidelines reflect good practice for all. The introduction states that enterprises should take full account of countries' general objectives, co-operate with local community and business interests and refrain from bribery and improper political activities.
The provision of information is an important Guidelines theme. For the public, this involves having information on the structure, activities and policies of the enterprise as a whole. For governments this means access to information to ensure compliance with policies and regulations on taxes, competition and environmental standards. For employees it means having information provided to their representatives for purposes such as meaningful negotiations on conditions of employment, or the performance of the enterprise or an entity thereof.
Another chapter addresses employment and industrial relations, where enterprises are encouraged to respect employees' rights to representation, refrain from unfair influence in labour negotiations or during organising campaigns, and to negotiate constructively on employment conditions. Enterprises are also encouraged to provide reasonable notice of changes in operations that would have major effects on employees and to co-operate to mitigate these changes' adverse effects. In particular, enterprises should:
respect the right of their employees to be represented by trade unions and other bona fide organisations and engage in constructive negotiations with them on employment conditions;
provide assistance and information to employee representatives;
provide information for a true and fair view of the performance of the enterprise;
observe standards of employment and industrial relations not less favourable than those observed by comparable employers in the host country;
utilise, train and prepare for upgrading their labour force;
provide reasonable prior notice of changes in operations, in particular on intended closures and collective layoffs;
refrain from discriminatory practices in their employment policies;
exercise unfair influence over bona fide negotiations with employee's representatives;
enable authorised representatives of their employees to conduct negotiations on collective bargaining or labour-management relations with management representatives authorised to take decisions on the matters at hand.
In the competition area, MNEs are encouraged to conform to countries' rules and policies by, for example, refraining from forming cartels or restrictive agreements and from abusing dominant market positions through anti-competitive acquisitions, predatory behaviour and other practices.
To promote environmental protection, the Guidelines state that enterprises should take due account of the need to protect the environment and to avoid environmentally related health problems. They should provide timely information regarding potential impacts of their activities on environment and health, take appropriate measures to minimise the risk of accidents and damage to health and environment and co-operate in mitigating any adverse effects of their activities.
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