Guidelines for multinational enterprises

OECD – ILO High-Level Roundtable on Employment and Industrial Relations: Promoting Responsible Business Conduct in a Globalising Economy


Opening Remarks by Angel Gurría, OECD Secretary-General, delivered at the OECD – ILO High-Level Roundtable on Employment and Industrial Relations

OECD Conference Centre, 23 June 2008
Ministers, Mr. Salazar-Xirinachs, representing the Director-General of the ILO, friends from TUAC, ambassadors, ladies and gentlemen,

I am delighted to welcome you to this joint conference of the ILO and the OECD. This high-level dialogue on corporate social responsibility comes at the request of the G8 leaders at their summit last June, and reflects the high ranking of this issue on the global agenda.

Corporate social responsibility is not merely a fad, even if the term is used to describe a range of different objectives and activities, ranging from philanthropy to environmental concerns. Corporate social responsibility is about business contributing to the social progress that globalization should deliver. Business wants governments to provide a predictable, stable environment for investment. High standards of conduct will establish business as the desirable economic partner that governments want.

Over the last decade, much has happened in the field of corporate social responsibility. Many businesses have developed codes of conduct and other useful private initiatives. Almost 80% of the large companies worldwide have policies and management systems in place to address issues like equality of job opportunities, or health and safety in the work place. In European OECD countries, more than 40% of companies now include human rights issues in their public reporting.

With the OECD Guidelines for Multinational Enterprises and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises both organisations aim to support business in these efforts.  Thirty OECD members and 10 other countries – with Egypt joining as the 40th country last year – have adhered to the OECD Guidelines.  The Governing Body of the ILO – an organisation with 181 member states -- adopted the ILO Declaration.  So it is fair to say that corporate social responsibility has a very strong international backing.

The promotion of internationally accepted  standards for employment and industrial relations, such as the abolition of child and forced labour, non-discrimination, right to employee representation, or reasonable notice for collective dismissals, figures prominently in the OECD Guidelines. Companies are also asked to apply the principles of responsible business conduct.

Under these conditions, multinational companies can make essential contributions to economic and social development in the host countries. In fact, new OECD work, to be published in a few days in the 25th edition of our Employment Outlook, shows that foreign direct investment can be an important driver in improving living conditions for workers. Multinational enterprises and the firms that are part of their supply chains tend to offer higher pay; they also provide more training than domestic firms. Better wages, better education and better working conditions will help create growth and prosperity.

The most distinctive feature of the OECD Guidelines is its unique complaint procedure. Since 2000, National Contact Points have considered more than 130 cases under their mediation and conciliation facility.  Most of these cases have been raised under the Employment and Industrial Relations chapter of the Guidelines, which again underlines the importance of corporate social responsibility. And an increasing share of the complaints relates to employment conditions in non-OECD countries.

Let me give you a few examples of how this works on the ground. Last year, thanks to the intervention of the German Contact Point, a world leading crop science company took measures against child labour in its operations in India. The United States’ Contact Point played a key role in resolving a labour dispute at a large plant in Massachusetts owned by a French abrasives company. And the mediation of the Australian Contact Point resulted in 34 agreed outcomes  for improving the immigration detention services of the local subsidiary of a United Kingdom based company.  

But this is clearly not enough. We can certainly have more cases brought to the National Contact Point. But that is not our main objective. Our ultimate goal is not to identify more violations but to reduce their incidence. Thus, I would like to encourage those countries that have not yet adhered to the OECD Guidelines to do so. And I would like to call on all countries to use the Guidelines, to make sure this tool is properly used, to help all stakeholders to be heard in the ways stipulated by the Guidelines.

We want the OECD Guidelines to become part of the culture. The rule, not the exception. A way of life.
We also need your input to improve and strengthen the mechanisms. The application of the Guidelines is work in progress. Tomorrow, the National Contact Points will meet to discuss emerging good practices and ways of improving their performance. Later this week, OECD will hold a dialogue with Chinese officials on how governments can promote responsible business conduct with the benefit of the experience with the Guidelines.

With more and more countries committed to using these instruments and with many stakeholders from civil society present here today, I am sure  our conference will point to new ways to generate synergies in our common effort to improve corporate social responsibility throughout the world.

Thank you. It is now my pleasure to invite Mr.  José Manuel Salazar-Xirinachs from the ILO to take the floor.


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