Christopher Wilkie, Industry Canada, Ottawa

1
- Christopher Wilkie, Industry Canada, Ottawa
Codes, Compacts, and Guidelines Implications
for the International Trade and Investment
Framework

• 2nd Annual EnviReform Conference
• Hard Choices, Soft Law Combining Trade,
  Environment, and Social Cohesion in Global
  Governance
• Munk Centre for International Studies,
• University of Toronto, 8-9 November, 2001

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OECD Guidelines for Multinational Enterprises

• Review a highlight for OECD Members in year 2000
• Part of OECD Declaration on International
  Investment and Multinational Enterprises and
  approach
• Includes 3 non-OECD Members (Argentina, Brazil,
  Chile)
• First revisions since 1991 (fourth since 1976)
  by far the most comprehensive
• Potential for the future

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Guidelines represent shared values

• Guidelines complement corporate codes
• Multilaterally endorsed.
• Shared values of governments and citizens
  regarding MNE activity, backed up with
  implementation procedures
• Business groups, labour representatives, and NGOs
  also support

4
Guidelines, FDI, and Trade

• Review was timely. FDI sensitive, but
  fundamental to economic, social, and
  environmental goals. Guidelines respond to
  public concerns in this context
• Apply world-wide
• Complement other governance initiatives, e.g.
  anti-bribery, corporate governance
• Links to international trade and investment
  framework remain to be explored in detail

5
Guidelines - Textual Contents

• Not a substitute for law
• Labour four core standards of the 1998 ILO
  Declaration
• Environment encourages internal environmental
  management and contingency planning
• Disclosure reflects Corporate Governance
  principles encourages social and environmental
  accountability

6
New Textual Highlights (contd)

• New chapters on combating bribery solicitation
  and offering consumer interests safety,
  complaints
• Human rights provision - close business and NGO
  involvement for complementing State efforts
• Supply chain Enterprises shouldencourage,
  where practicable, business partners, including
  suppliers and subcontractors, to apply principles
  of corporate conduct compatible with the
  Guidelines

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Guidelines - Implementation Procedures

• Enhanced procedures - National Contact Points
  (NCPs) the key
• Promotion, handling enquiries, helping to resolve
  issues in specific instances
• OECD Business and Trade Union Groups
• NGOs non-adhering countries

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Review Process

• Process fundamentally important to success
• Inclusion of business community, labour, NGOs
• Consultations of non-Members, plus public through
  the Web
• Legitimacy demands inclusion
• All are lessons for trade and investment system

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Complements

• Private initiatives, codes and recommendations
• Business support for third parties ISO 14000,
  GRI Dow Jones/Sustainability Asset Management
  CalPERS and other institutional investors
• Other international initiatives Global Compact,
  IFC ombudsman

10
The Future

• Corporate social responsibility focus on labour
  and environment
• Business support crucial
• Trade and investment framework part of this
  debate (e.g. WTO disputes NAFTA side agreements
  Guidelines)
• Lessons to be drawn - for governance and for the
  trading system

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Options

• Independent development of CSR initiatives (e.g.
  OECD Guidelines, UN Global Compact, private
  codes)
• WTO - Trade and investment suggestions/TPRM-type
  mechanisms
• Side agreements (e.g. NAFTA)
• Other incorporation in agreements

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Conclusion

• Strengths and limitations to a Guidelines/CSR
  approach
• Non-binding initiatives complement legal
  framework, each with a role to play
• Caveat incorporating soft law issues into
  international trade and investment institutions
  strengthens these institutions. Is this a goal?