Guidelines for multinational enterprises

Scope of the Guidelines and the investment nexus

 

Statement by the Committee

The question of the scope of the Guidelines – the definition of the activities to which the Guidelines are thought to apply – was raised during the NCP meetings, consultations with BIAC, TUAC and NGOs and the Roundtable in 2002.  The issue was also raised and discussed in all subsequent consultations held during the 2002-2003 reporting period. The OECD Committee on International Investment and Multinational Enterprises (CIME) and its Working Party held several exchanges of views and surveyed delegates’ positions on this issue.  Following its April 2003 meeting, the CIME issued the following statement:

In considering this issue, the CIME has sought to protect and enhance the credibility and effectiveness of the Guidelines and to remain true to the agreement reached among adhering governments at the 2000 Review after extensive consultations with the business, trade union and NGO communities. 

The Guidelines are a multifaceted instrument and the Committee found it useful to consider this issue with reference to the following, which does not aim to change the balance reached during the 2000 Review: 

  • First, the Guidelines are an Annex of the OECD Declaration on International Investment and Multinational Enterprises. The fact that they are part of the Declaration and that oversight responsibility for them has been assigned by the Council to the CIME -- the body charged with responsibility for the Organisation’s work on investment and multinational enterprises – indicates the investment intent of the drafters of the instrument. 

  • Second, the Guidelines are a major corporate responsibility instrument that draws on and reinforces an established body of principles dealing with responsible business conduct. These principles reflect common values that underlie a variety of international declarations and conventions as well as the laws and regulations of governments adhering to the Guidelines. As such, these values are relevant to the activities of multinational enterprises.  Thus, as it has already done in a number of areas, the international community may continue to draw on the values underlying the Guidelines in other contexts.

  • Third, the Guidelines have been developed in the specific context of international investment by multinational enterprises and their application rests on the presence of an investment nexus.  When considering the application of the Guidelines, flexibility is required.  This is reflected in Recommendation II.10 and its commentary that deal with relations among suppliers and other business partners.  These texts link the issue of scope to the practical ability of enterprises to influence the conduct of their business partners with whom they have an investment like relationship.  In considering Recommendation II.10, a case-by-case approach is warranted that takes account of all factors relevant to the nature of the relationship and the degree of influence. The fact that the OECD Declaration does not provide precise definitions of international investment and multinational enterprises allows for flexibility of interpretation and adaptation to particular circumstances.

For more information, download the 2003 Annual Meeting of the National Contact Points: Report by the Chair

 

 

 

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