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Draft Integrated Text-Chapters and Commentary:
OECD Guidelines for Multinational Enterprises
17 December 1999
Comments by the TUAC Secretariat
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TUAC is concerned that with certain exceptions the changes made to the
latest draft (17 December 1995) of the text and commentary of the Guidelines
weaken it compared with earlier drafts. This in particular concerns the
status of the Guidelines, which are now described as principles rather
than standards. The OECD is not negotiating a binding treaty covering
MNEs but is should be seeking to enhance the relevance of a set of Guidelines
which represent the collective expectations of governments with regard
to the standards of behaviour of multinational enterprises. This is far
more than talking about a set of voluntary principles, which risk remaining
The comments should be read in conjunction with the TUAC submission
to the December 1999 CIME Working Party on the Guidelines.
Preface: The preface is a step backwards, as the Guidelines are
no longer a standard of good practice to be met, but rather voluntary
principles. Further drafts must re-instate standards. The TUAC delegation
(and others) to the December 1999 consultations argued that the preface
should be more balanced between the positive contributions that MNEs bring
and the anxieties or perceptions around their negative actions. We
also suggested that the text be more forward looking, in the sense that
the Guidelines should be a standard, that when met by enterprises, would
put them on the high road to corporate success, while meeting the needs
of all stakeholders, and thus contribute to increasing a nations wealth,
in the face of increasing competitive pressures through globalisation.
Concepts and principles: the replacement of standards by principles
continues into this section (paragraph 1). Paragraph 2 now undermines the
content of the Guidelines, in that observance should take into account
the particular economic, political and cultural characteristics of each
host country. Some countries, for example view child labour or the suppression
of trade union rights as falling under that matrix: a loop-hole to be exploited
by worst case enterprises. Paragraph 5 as drafted allows for differential
and less strict observance by small-and medium-sized enterprises, undermining
the general applicability of the instrument. Paragraph 8 forecloses on
any improvements that may be made to the implementation procedures, and
fails to mention dispute resolution in any sense. Rather than weakening
them the text should strengthen these provisions.
General Policies: Previous TUAC recommendations on strengthening
paragraph 2 covering respect for human rights should be incorporated. Paragraph
8 on protection for whistleblowers is a weakening of the text. The previous
text should be re-instated, as should that in the following chapter on
corruption. Paragraph 9 has been weakened, not just by the replacement
of standards by principles, but also by the replacement of responsibility
by conduct. As regards the commentary to this section, TUAC is concerned
by paragraph 2 that implies that businesses should be partners in the
development of voluntary and regulatory policies, while the views of others
should be merely considered. The final paragraph of the commentary should
be deleted, as no evidence exists that corporate codes of conduct are in
practice trade or investment distorting.
Disclosure: the deletion of internationally acceptable from
paragraph 2 reduces the value of the Guidelines relative to contemporary
custom and practice. Previous TUAC comments to bring coherence and consistency
to the chapter should also be incorporated.
Employment and Industrial Relations: still lacking is a reference
to the 1998 ILO Declaration in the chapter itself. Paragraph 2c is a welcome
development, however, promote should be replaced with engage in. TUAC
would urge the replacement of paragraph 4b on occupational health and safety
by: Provide a healthy working environment by instituting mechanisms that
promote worker involvement, training and education, the right to refuse
unsafe work, and that include attention to the natural environment. In
view of past clarifications of the Guidelines the new last sentence should
be replaced by: Management should give such notice at the earliest opportunity,
and at least no later than prior to the final decision being taken. The
original language in paragraph 8 should be re-instated, to make it consistent
with paragraph 2c.
Turning to the commentary, the new last sentence in paragraph 3 should
be deleted. Given the 15 million (and rising) child labourers producing
goods and services for export, often in subsidiaries of or suppliers to
MNEs, it may be wise to delete the new text in paragraph 5. Paragraph 10
should include immediately following the second last sentence: Compliance
could be achieved through the implementation of measures that recognise
workers fundamental right to be involved in their own protection; hence
the reference to the rights of participation, knowledge and refusal of
dangerous work. The last paragraph should be revised to take account of
the TUAC formulation covering reasonable notice.
Environment: the addition (local conditions) to the chapeau
undermines the goal of the chapter, and should therefore be deleted.
For similar reasons consultation rather than communication should be
re-instated to the second tiret of paragraph 2. A new third tiret should
be added to paragraph 2: provide workers with information, training and
education that satisfies their fundamental need to know as a prerequisite
to health and safety practices.
The following should be added to paragraph 5: to include social and
employment transition programmes that ensure the workers interests in
secure employment. A new tiret 5 should be included in paragraph 6: worker
involvement in enterprise assessments, target setting, monitoring and reporting.
A new paragraph is needed to read: Recognise the role of workers health,
safety and environmental representatives and the right of workers to refuse
unsafe, unhealthy or environmentally damaging work, according to internationally
agreed standards and practices.
As regards the Commentary, a new last sentence should be added to paragraph
4: Workers are primary stakeholders and should therefore be involved in
consultations, agreements, and implementation practices that recognise
their interests as producers and consumers.
Combating Bribery: the original title Bribery and Corruption
better captured the essence of this issue. As noted above the previous
text protecting whistleblowers should be re-instated.
Consumer Interests: paragraph 1 would better read as: Ensure
that the goods and services they provide meet all required standards for
consumer health and safety, are produced in accordance with international
labour and environmental standards, and include all required health warnings
and product safety labels. As regards the commentary, the following new
sentence should be added to paragraph 3: The objective of transparency
should be extended to include relevant information on process and production
methods, especially those that reflect a growing consensus on the importance
of labour and environmental standards.
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