Presentation of the OECD Guidelines
The OECD Guidelines are recommendations that governments adhering to the OECD Declaration on International Investment and Multinational Enterprises address to companies, national or multinational, operating anywhere in the world.
Despite their voluntary nature, adhering countries have made a binding commitment to implement them.
The purpose of the Guidelines is to promote a positive business contribution to economic, environmental and social progress, to strengthen mutual trust between enterprises and societies, and to improve the environment for foreign investment.
Adopted for the first time in 1976, since then several updates have been made for a progressive adaptation of them to the international investment landscape. The main changes concern the integration of a new chapter on human rights but also the integration of the most comprehensive notion of due diligence and responsible supply chain management.
THE OECD GUIDELINESConcepts and Principles
This chapter sets out concepts that help enterprises to clarify certain notions related to The OECD Guidelines.
It also provides a general framework for understanding the scope of the OECD Guidelines, their extent, objectives, etc.
General Policies
The General Policies chapter of the OECD Guidelines, is the first to contain specific recommandations to entreprises. It establishes common fundamental principles for the sepcific recommendations in subsequent chapters.
The recommendations as sets up in this chapter provide numerous principles in particular the alignment with the policies of countries where enterprises operate and the contribution of to economic, social and environmental progress with a view to achieving sustainable development.
This chapter provide also clarifications about due diligence process that enterprises should care for a responsible supply chains.
Disclosure
The Disclosure chapter aims to encourage improve understanding of the operations of multinational enterprises.
These recommendations specify the scope and extent of disclosure, the nature of information concerned by disclosure, the confidentiality considerations, the accessibility principles, etc.
As such, enterprises should ensure that timely and accurate information is disclosed on all material matters regarding their activities, structure, financial situation, performance, ownership and governance. Disclosure policies of enterprises should be tailored to the nature, size and location of the enterprise, with due regard taken of costs, business confidentiality and other competitive concerns.
Human Rights
This chapter opens with a chapeau that sets out the framework for the specific recommendations concerning enterprises’ respect for human rights. It draws upon the United Nations Framework for Business and Human Rights ‘Protect, Respect and Remedy’ and is in line with the Guiding Principles for its Implementation.
The chapter recognizes that States have the duty to protect human rights, and that enterprises, regardless of their size, sector, operational context, ownership and structure, should respect human rights wherever they operate. Respect for human rights is the global standard of expected conduct for enterprises independently of States’ abilities and/or willingness to fulfil their human rights obligations, and does not diminish those obligations.
In this regard, enterprises should:
- Respect human rights and address adverse human rights impacts with which they are involved.
- Avoid causing or contributing to adverse human rights impacts and address such impacts when they occur.
- Seek ways to prevent or mitigate adverse human rights impacts that are directly linked to their business operations, products or services by a business relationship, even if they do not contribute to those impacts.
- Have a policy commitment to respect human rights.
- Carry out human rights due diligence as appropriate to their size, the nature and context of operations and the severity of the risks of adverse human rights impacts.
- Provide for or co-operate through legitimate processes in the remediation of adverse human rights impacts where they identify that they have caused or contributed to these impacts.
Employment and Industrial Relations
The first paragraph of the chapter is designed to echo all four fundamental principles and rights at work which are contained in the ILO’s 1998 Declaration, namely the freedom of association and right to collective bargaining, the effective abolition of child labour, the elimination of all forms of forced or compulsory labour, and non-discrimination in employment and occupation. These principles and rights have been developed in the form of specific rights and obligations in ILO Conventions recognized as fundamental.
All provisions of this chapter echo relevant provisions of the 1998 Declaration, as well as the 1977 ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, last revised in 2006 (the ILO MNE Declaration).
The chapter include other principles, such as the promotion of consultation and co-operation between employers and workers and their representatives on matters of mutual concern; measures should be taken in some circumstances (ex:closure), employment of local workers, etc.
Environment
The chapter environment provides guidance and recommendations for enterprises in a manner to protect the environment, public health and safety, and generally to conduct their activities in a manner contributing to the wider goal of sustainable development.
The text of the environment chapter broadly reflects the principles and objectives contained in the Rio Declaration on Environment and Development, in Agenda 21 (within the Rio Declaration). It also takes into account the (Aarhus) Convention on Access to Information, Public Participation in Decision-making, and Access to Justice in Environmental Matters and reflects standards contained in such instruments as the ISO Standard on Environmental Management Systems.
Combatting Bribery, Bribe Solicitation and Extortion
The chapter combating bribery, bribe solicitation and extortion underlines the important role of enterprises in combating these practices.
A series of recommendations are designed to help enterprises take the necessary measures to fight bribery, in particular:
- Not offer, promise or give undue pecuniary or other advantage to public officials or the employees of business partners.
- Develop and adopt adequate internal controls, ethics and compliance programs or measures for preventing and detecting bribery.
- Prohibit or discourage, in internal company controls, ethics and compliance programs or measures, the use of small facilitation payments, which are generally illegal in the countries where they are made, and, when such payments are made, accurately record these in books and financial records.
- Ensure, taking into account the particular bribery risks facing the enterprise, properly documented due diligence pertaining to the hiring, as well as the appropriate and regular oversight of agents, and that remuneration of agents is appropriate and for legitimate services only.
- Enhance the transparency of their activities in the fight against bribery, bribe solicitation and extortion.
- Promote employee awareness of and compliance with company policies and internal controls, ethics and compliance programs or measures against bribery, bribe solicitation and extortion through appropriate dissemination of such policies, programs or measures and through training programs and disciplinary procedures.
- Not make illegal contributions to candidates for public office or to political parties or to other political organizations.
Consumer Interests
The chapter on consumer interests of the OECD Guidelines for Multinational Enterprises draws on the work of the OECD Committee on Consumer Policy and the Committee on Financial Markets, as well as
the work of other international organizations, including the International Chamber of Commerce, the International Organization for Standardization and the United Nations.
The chapter recognizes that consumer satisfaction and related interests constitute a fundamental basis for the successful operation of enterprises.
It calls on enterprises to:
- Apply fair business, marketing and advertising practices, and ensure the quality and reliability of the products that they provide,
- Adhere to required health and safety standards,
- Provide necessary information to consumers about products and services, which is sufficient for them to make informed decisions,
- Developing effective approaches to address consumer complaints,
- Prohibit deceptive, misleading, fraudulent and other unfair commercial practices,
- Important role in consumer education that can be played by enterprises jointly with government,
- Importance of cooperation between enterprises and public authorities to help prevent and combat deceptive marketing practices more effectively,
- the importance of protecting personal data against consumer privacy violations, including security breaches,
- Take the situations of vulnerable and disadvantaged consumers into account when enterprises market goods and service.
Science and Technology
The chapter aims to promote, within the limits of economic feasibility, competitiveness concerns and other considerations, the diffusion by multinational enterprises of the fruits of research and development activities among the countries where they operate, contributing thereby to the innovative capacities of host countries.
In this regard, the chapter provide recommendations for enterprises, mainly:
- ensure that their activities are compatible with the science and technology (S&T) policies and plans of the countries in which they operate and as appropriate contribute to the development of local and national innovative capacity,
- Permit the transfer and rapid diffusion of technologies and know-how, with due regard to the protection of intellectual property rights,
- When appropriate, perform science and technology development work in host countries to address local market needs, as well as employ host country personnel in an S&T capacity and encourage their training, taking into account commercial needs,
- Using reasonable terms and conditions when granting licenses for the use of intellectual property rights or when otherwise transferring technology.
Competition
The chapter include recommendations that emphasizes the importance of competition laws and regulations to the efficient operation of both domestic and international markets and reaffirms the importance of compliance with those laws and regulations by domestic and multinational enterprises.
They also seek to ensure that all enterprises are aware of developments concerning the scope, remedies and sanctions of competition laws and the extent of co-operation among competition authorities.
Especially, enterprises should:
- Refrain from entering into or carrying out anti-competitive agreements among competitors, including agreements to: fix prices; make rigged bids (collusive tenders); establish output restrictions or quotas; or share or divide markets by allocating customers, suppliers, territories or lines of commerce.
- Co-operate with investigating competition authorities.
- Inform employees about the importance of compliance with all applicable competition laws and regulations.
Taxation
It is important for entreprises to contribute to the public finances of host countries by paying the taxes they owe on a timely basis.
The chapter highlights also the importance of the tax compliance by enterprises through:
- Compliance with both the letter and the spirit of the tax laws and regulations in all countries in which they operate,
- Co-operate with authorities, and
- Make information that is relevant or required by law available to them.
Furthermore, enterprise’s commitment should be reflected in risk management systems, structures and policies.
