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The OECD Guidelines for Multinational Enterprises

The OECD Guidelines for Multinational Enterprises are a unique, government-backed international corporate accountability mechanism aimed at encouraging responsible business behaviour around the world. They define standards for socially and environmentally responsible corporate behaviour and proscribe procedures for resolving disputes between corporations and the communities or individuals negatively affected by corporate activities. In May 2011, the OECD and non-OECD adhering governments updated the Guidelines, introducing substantial new provisions in areas such as human rights, due diligence and supply chain responsibility.

About the OECD Guidelines

The OECD Guidelines are recommendations from governments to multinational enterprises operating in or from countries that are signatory to the Declaration on International Investment and Multinational Enterprises including the Guidelines. They provide guidance for responsible business conduct in areas such as: labour rights, human rights, environment, information disclosure, combating bribery, consumer interests, competition, taxation, and intellectual property rights.

While they are not legally binding on companies, OECD and signatory governments are required to ensure that they are implemented and observed. What distinguishes the OECD Guidelines from other corporate responsibility instruments and mechanisms is their international nature, the fact that they are government-backed standards and that they have a dispute resolution mechanism for resolving conflicts regarding alleged corporate misconduct.

For the official text of the OECD Guidelines for Multinational Enterprises, please click here.

Specific Instance Procedure

Governments that adhere to the Guidelines must establish an NCP to promote the Guidelines and handle complaints against companies that have allegedly failed to adhere to Guidelines’ standards. The ‘specific instance’ procedure – as the Guidelines’ complaint process is officially called – is focused on resolving disputes – primarily through mediation and conciliation, but also through other means – and can be used by anyone who can demonstrate an ‘interest’ (broadly defined) in the alleged violation. NGOs and trade unions from around the world have used the complaint process to address adverse social and environmental impacts caused by corporate misconduct. NGOs have also used the complaint process to raise awareness about the fact that enterprises are expected to uphold internationally recognised standards, contribute to sustainable development and, at a very minimum, ‘do no harm’ wherever they operate.

The Specific Instance Procedure includes multiple stages:

  • Phase 1: initial assessment: This phase starts when a complaint is submitted to an NCP. At this stage the NCP must conduct an initial assessment to determine if the case merits further examination. 
  • Phase 2: mediation: This phase starts when the NCP decides the case merits further examination. At this stage the NCP will try to bring the complainants and the company together to resolve the case through a process focused on mediation and conciliation. 
  • Phase 3: final statement: This phase involves the NCP issuing a final statement about the complaint and mediation process. It should outline the alleged breaches and how the NCP dealt with the case. Final statements may include recommendations on the implementation of the Guidelines, as well as the NCP’s determination as to whether a breach of the Guidelines has occurred. In cases where either of the parties refuses to participate in the mediation process, if the parties cannot agree on the terms for mediation, or if mediation fails, the NCP should still issue its own final statement and document these circumstances.

 

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