The Guidelines were adopted on 21 June 1976 by all OECD member states, except for Turkey, as part of a package which consisted of the Declaration on International Investment and Multinational Enterprises, for the facilitation of direct investment among OECD member countries, together with four instruments related to the Declaration.

The OECD Guidelines for Multinational Enterprises are non-binding recommendations addressed by governments to multinational enterprises operating in or from adhering countries. The Guidelines are supported by the 30 OECD participating countries and nine non-Member countries (Argentina, Brazil, Chile, Egypt, Estonia, Israel, Latvia, Lithuania, Morocco, Romania and Slovenia). They provide voluntary principles and standards for responsible business conduct in areas such as:
- Information disclosure
- Employment and industrial relations
- Environment
- Combating bribery
- Consumer interests
- Science and technology
- Competition and
- Taxation

Core issues include:
- Respect for labour standards
- Contribution to sustainable development
- Respect for human rights
- Environment (precautionary principle)
- Bribery and corruption
- Whistleblower protection

Chapter IV on employment and industrial relations is fairly detailed and includes paragraphs on freedom of association (paras 1, 8), collective bargaining (paras. 1, 2, 8, 9) and non-discrimination policies (para 7). Regrettably, there are no references to other internationally accepted standards such as the ILO (International Labour Organisation) Conventions. Instead the Guidelines are formulated in their own vaguer terms. Furthermore, some elements that are accepted as standard in other codes are lacking in the Guidelines such as hours of work and living wages.

Originally, the Guidelines only applied to companies operating within the OECD countries. However, the latest review of the Guidelines, conducted in 2000, widened their scope to include companies operating in or from OECD member states. The latest review also included supply chain responsibility which means that companies should encourage business partners, including sub-contractors, to do business in a manner compatible with the Guidelines. Chapters on combating bribery and protecting consumers were also added. Furthermore, the review addressed the implementation procedure.

The only formal obligation that the Guidelines put on countries is to set up National Contact Points (NCPs) whose primary responsibility it is to ensure the follow-up of the Guidelines. The NCPs gather information on experiences with the Guidelines, promote them, deal with enquiries, discuss matters related to the Guidelines and assist in solving problems that arises in matters covered by the Guidelines. If there is a dispute about the applicability, the Investment Committee may be asked to consider an amendment to the text or a clarification of a particular clause. Clarification can be sought by member countries, TUAC (Trade Union Advisory Committee) or BIAC (Business and Industry Advisory Committee). NGOs and other interested parties cannot seek clarification but can bring complaints under the “specific instances” 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. After completion of the initial assessment, the focus is on problem solving with help from experts, stakeholders, other NCPs and the Investment Committee and through mediation with the parties involved. If the parties involved do not reach an agreement with regard to the specific instance, the NCP is required to issue a statement.

Positive and negative aspects of the Guidelines

Positive aspects of the Guidelines include that they cover a wide range of issues, not just labour or environmental issues. They are recommendations made up by governments which make them an important pressure tool for corporate responsibility. The complaint procedure has governmental backup which is not necessarily the case when companies establish their own codes of conduct. An alleged breach could result in bad publicity for the company involved and damage its brand name. The Guidelines and their complaint procedure can help put pressure on companies that are not acting in a socially and environmentally responsible manner to improve their behaviour. Also, the burden of proof is not as judicially heavy as is the case when you take a company to court.

The applicability of the Guidelines is extra-territorial in that they are also valid outside the OECD member states. The Guidelines can thus be an option for countries where the legal framework is not functioning properly or where NGOs do not have easy access to the legal system.

The revised Guidelines have renewed the interest in the Guidelines. Nevertheless, negative aspects include that supervision under the Guidelines is not very effective as a result of the arrangements with regard to confidentiality and the lack of sanctions. The current procedures only provide a minimal sanction through the risk to a company’s reputation. Also, weak implementation and the lack of possibilities to identify specific companies remain a concern. Weak wording such as “where practicable”, “when appropriate” water down the meaning of many paragraphs. The renewed implementation procedure still relies largely on the will of governments, through their NCPs, to deal openly and effectively with the specific instances. Too much discretion is left to the individual NCP in the handling of specific instances and NGOs and other interested parties still have no mechanism of appeal. Finally, the fact that the Guidelines do not refer to specific paragraphs of other international instruments like ILO and environmental instruments diminishes their value. Their existence, as well as the Universal Declaration of Human Rights (UDHR), is recognised in the Preface, paragraph 8, but it is not stated that companies should respect the principles expressed therein. The Guidelines have vaguer descriptions of labour rights and the precautionary principle than what is established in ILO Conventions and the Rio Declaration respectively.    

Official text of the OECD Guidelines, Revision 2000

OECD Guidelines website

Annual Report on the Guidelines for Multinational Enterprises 2007