CIME WORKING PARTY 
ON THE REVIEW OF THE OECD GUIDELINES 
FOR MULTINATIONAL ENTERPRISES

TUAC SUBMISSION
December  1999

Introduction

TUAC welcomes this opportunity to give our views on the progress so far with the Review of the Guidelines. We recognise the open way in which the OECD and in particular the Chair of the Working Party on the Guidelines has conducted the Review. This progress if built on could lead to the Guidelines, as revised, to become an important and effective instrument of governance of the global economy. However, the key outstanding issue remains the much-needed development of effective implementation procedures. Without this the revised Guidelines will lack credibility.

Strengthening the Implementation Procedures: Benchmarking the Current Proposals

TUAC would support many of the suggestions contained in the Secretariat paper “Towards Effective Implementation of the OECD Guidelines for Multinational Enterprises”  . We would support the new promotional initiatives under active discussion: annual meetings and reports of the National Contact Points (NCP’s); the inclusion of the Guidelines in countries’ inward investment promotion; and a Guidelines web site. 

The proposal that NCP’s have regular consultations with the social partners and make these an integral part of annual meetings of the NCP is positive. This goes some way, but not far enough, to meeting the TUAC proposal that NCP’s should be encouraged to have tri-partite structures. The TUAC proposal for the establishment of more general orientations and terms of reference for the operation of the NCP’s has yet to be adequately addressed  . We welcome the idea that enterprises and business federations be encouraged to endorse the Guidelines through, for example registers of companies publicly stating their support for the instrument. 

We look forward to discussing ways to take forward these ideas, and to define more clearly concrete steps at national level that could be taken by governments and others to make them effective. Consideration should be given to joint initiatives, for example, between the OECD, UN bodies, the IMF, World Bank and regional organisations such as the EBRD and European Commission to promote and implement the Guidelines, alongside work to promote the Principles on Corporate Governance. 

The proposal for a new conciliation procedure for dealing with individual cases merits consideration as well as further discussion around unresolved questions, such as the role of the CIME in this process. TUAC supports the idea that the process could be initiated if one party requests it and the right of all participants to express their views publicly, though the exclusion of formal records of the proceedings should be reconsidered. We are willing to enter into further discussions around these issues to examine how such a process could be made to work.

However, for the procedures to have credibility with TUAC affiliates an element of “contestability” must be built into the system so that there is some means of recourse where procedures are seen not to be working. 

We would propose the following. When a problem arises the conciliation process could be initiated. A two-stage process could then be followed. In the event that the conciliation process helped to resolve the problem then no further action would be required. In the event that conciliation failed to resolve the problem, then it could be referred upward to an ‘expert group’ at the OECD level. Outside experts would be invited to participate, depending on the issues. So for example, the ILO could be involved on a labour related issue or UNEP over the environment. The ‘expert group’ would have the right to pronounce its view on the issue as it related to the Guidelines, and make recommendations to resolve the problem. The mechanism would be flexible enough to accommodate NGO concerns through their participation where relevant.

Formalising the Extension of the Guidelines beyond the OECD area

TUAC supports formalising the extension of the Guidelines beyond the OECD area. The credibility of the Guidelines would be undermined were governments to restrict the application of the instrument to the OECD area. Moreover, the OECD Council Resolution covering the modalities of non Member country participation in the work of the Organisation would allow for their adherence to the Guidelines alone.

Outstanding questions do exist around the issue of how best to involve non Member governments in the follow-up process. However, those are of a technical nature. For its part TUAC can state that trade unions in non-OECD countries would participate in the process through our partnership with the ICFTU.

Moving forward on Textual Revisions

As regards the Employment and Industrial Relations Chapter we welcome the reference to all four ILO Conventions of the 1998 Declaration. However, still lacking is a reference to the Declaration itself in the Chapter. As concerns child and forced labour the text simply states that enterprises should “contribute” to their abolition or elimination. The language should be strengthened such that enterprises “refrain” from employing child or forced labour, including that by suppliers.

Consistency with ILO Conventions would be retained by the inclusion in paragraph 1d of language from ILO Convention 111 itself: “race, colour, sex, religion, political opinion, national extraction and social origin”.

Paragraph four currently provides for enterprises to “provide a safe and healthy working environment”. To give meaning to the follow-up and implementation procedures the provisions should be more clearly defined. Similarly, paragraph six on “reasonable notice” should be strengthened to define the concept more clearly.

TUAC supports the inclusion in the Introductory Chapter of text committing governments not to lower labour, health, safety and environment standards to attract investment. 

The revision to the General Policies Chapter such that enterprises should “respect the human rights of their employees, as well as encourage the respect of human rights by business partners and in the societies in which they operate” is a step forward. That should be more clearly defined by a direct reference to the 1948 UN Universal Declaration of Human Rights, along with a reference to the 1998 ILO Declaration. The inclusion of “all” between “respect” and “the” would also be helpful. 

The proposal to include a new Chapter in the Guidelines on Bribery and Corruption is welcomed by TUAC, in particular the language on the protection of “whistleblowers”.

TUAC welcomes the re-design of the Disclosure and Transparency Chapter, and its new provisions. However, we are concerned at the design of the twin track approach, whereby enterprises “should” disclose material information, but the text only “encourages” them to disclose non-material information on relations with employees, risk management systems, and ethical statements and other codes. To be consistent and coherent enterprises “should” disclose both types of information. The importance of this is as follows. From an operational perspective, it would be difficult to query the implementation of those issues that MNEs are only “encouraged” to do. That is also inconsistent with other Guidelines’ chapters where the word “should” is used to determine the actions of enterprises. Second, work under way in other fora, for example the Financial Stability Forum on risk management systems for financial markets are likely to develop regulatory mechanisms on disclosure. The Guidelines should be consistent with that.

The revisions to the Environment Chapter were much needed. We welcome the new recommendations to on environmental education and training and the protection of “whistleblowers”. However, the omission of references to employee’s information disclosure and the right not to undertake dangerous tasks must be rectified. Clauses should be added that draw on the OECD’s Guiding Principles for Chemical Accident Prevention, Preparedness and Response, which states that: “an employee should have the right to refuse to do any task which he/she believes may create an unwarranted risk or accident”, or which is dangerous to health or the environment. Also required is the establishment of formal consultation mechanisms, and two-way flows of information between management and health and safety representatives.
 
 

(1)   DAFFE/IME/WPG(99)14
(2)   See TUAC Initial Submission on the Guidelines - April 1999