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About The Guidelines
Introduction
Multinational enterprises (MNEs) are an important part of the international economy. Through
international direct investment, they bring substantial benefits to home and host countries in the form of
productive capital, managerial and technological know-how, job creation and tax revenues. At the
same time, public concerns remain about the social, economic and environmental impact of MNE
activities on the societies in which they operate. The OECD Guidelines for Multinational Enterprises (Guidelines) is an important multilateral
initiative that addresses these concerns.
An instrument of the Organization for Economic Cooperation and Development (OECD), the
Guidelines are recommendations addressed by governments to MNEs. They provide voluntary
principles and standards for responsible business conduct, consistent with domestic and international
laws. Reflecting good practice for enterprises wherever they operate, the Guidelines aim to:
- ensure that the operations of enterprises are in harmony with government policies;
- strengthen the basis of mutual confidence between enterprises and the societies in which they
operate;
- improve the foreign investment climate; and,
- enhance MNEs' contribution to sustainable development.
The Guidelines provide general as well as specific recommendations in the following areas:
General Policies: sets out general areas of good corporate behaviour, including respect for human rights; Disclosure: covers the public dissemination by MNEs of reliable and relevant information on their activities; Employment and Industrial Relations: covers, inter alia, the issues of non-discrimination, forced labour, child labour, and freedom of association and collective bargaining; Environment: covers issues such as MNEs' environmental management systems and contingency planning; Combatting Bribery: aims to eliminate bribery of foreign public officials. Consumer Interest: Seeks to ensure that MNEs respect consumer rights, including regarding the quality and safety of products; Science and Technology: recognizes that MNEs can play an important role in improving local knowledge without compromising their intellectual property rights; Competition: promotes respect for competition rules and avoidance of anti-competitive behaviour; Taxation: addresses MNE compliance with tax laws and regulations.
The Guidelines are not a substitute for, nor do they override, Canadian law or any other country's laws. They represent supplemental standards and principles of behaviour and, as such, do not create conflicting requirements.
The Guidelines are an integral part of the OECD Declaration on International Investment and Multinational Enterprises. The Declaration provides a balanced framework of responsibilities for governments and businesses designed to improve the climate for international investment. The other
elements of the Declaration are directed at governments, and their broad objectives are to:
accord national treatment to foreign-owned enterprises, i.e., treatment no less favourable than
that accorded to domestic enterprises in like situations; promote cooperation among governments regarding incentives to attract international investment; and avoid or minimize imposing conflicting requirements on MNEs.
The Guidelines in Policy Context
Canadians expect businesses to carry out their operations in a socially and environmentally responsible manner, at home and abroad. The Government encourages responsible business conduct through information dissemination, facilitation of dialogue and support for the development of international norms. The Guidelines are a key part of this approach to promoting
corporate social responsibility.
Multinational enterprises recognize the value of adopting management strategies that promote responsible conduct. It assists them in aligning business objectives with community values, thus creating benefits for both them and the communities in which they operate. The Guidelines provide a multilateral framework of standards and principles that complement and support these private sector initiatives.
The Guidelines are the only multilaterally-endorsed comprehensive code of conduct that governments
have committed to promote. The fact that they set out the expectations of the governments of thirty-nine adhering countries gives them added credibility and strength as a policy tool to promote corporate
social responsibility. Moreover, the adhering countries are the source and destination of most MNE
investment activity worldwide. In the intensely
competitive international environment in which MNEs operate, the Guidelines help to "level the playing field" with respect to responsible conduct, thus enhancing the climate for foreign direct investment.
The Evolving Face of the Guidelines
The Guidelines have been reviewed four times since their inception in 1976. The most recent review was completed in June 2000, when Ministers from the thirty OECD member countries and three non-member countries officially adopted the revised Guidelines.
Many of the main features of the Guidelines were retained as a result of the 2000 review. Observance
by firms remains voluntary; the institutional structure of the implementation procedures is broadly
unchanged; and the Guidelines remain an important part of the OECD Declaration on International
Investment and Multinational Enterprises. Notable changes include the addition of
recommendations relating to the International Labour Organization's core labour standards on
elimination of child and forced labour, and new recommendations on environmental management and
contingency planning for environmental impacts. New chapters on the promotion of consumer interests
and on combating bribery were added, as were general recommendations on human rights, whistle-blowing and not seeking exemptions to regulations. The chapter on disclosure and transparency has
been updated to reflect the OECD Principles on Corporate Governance and to encourage social and
environmental accountability.
Implementation procedures have been improved. Governments through their National Contact Points
(NCPs) continue to be responsible for promoting the Guidelines, handling enquiries and helping to
resolve issues that arise in specific instances. New guidance on implementation has been provided in
the form of a non-binding procedural guidance document. (See OECD Guidelines for MNEs:
Decision of the Council.) This document
is designed to assist NCPs in fulfilling their obligations with respect to the Guidelines. The OECD
Committee on International Investment and Multinational Enterprises (CIME) remains the responsible
body for clarifying the Guidelines and overseeing their effectiveness.
The revised Guidelines are clear that the recommendations represent good corporate practice wherever
enterprises operate, i.e., their coverage is not limited to the OECD area. It is recognized, however, that,
under this wider geographic scope of application, the particular circumstances of individual host
countries need to be taken into account. The implementation procedures need to be adapted to the
greater difficulties that may arise for NCPs looking into matters covered by the Guidelines in non-adhering countries.
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