OECD Guidelines for MNEs

1
OECD Guidelines for MNEs

• Adopted in 1976, and reviewed in 2000
• Guidelines, major features
• comprehensive set of rules, multilaterally
  endorsed, binding for adhering governments which
  are requested to promote their application by
  MNEs operating in their countries and by MNEs
  based in their countries operating worldwide
• voluntary to enterprises, not legally but morally
  binding
• Major components NCP, CIME (Committee on
  International Investment and Multinational
  Enterprises) , and TUAC

2
OECD Guidelines content

• The Guidelines consist of ten chapters covering
  most aspects of company behaviour
• Concepts and Principles,
• General Policies,
• Disclosure,
• Employment and Industrial Relations (FoA, CB),
• Environment (OSH),
• Combating Bribery,
• Consumer Interests,
• Science and Technology,
• Competition and (10) Taxation.

3
Trade Union Advisory Committee to the OECD - TUAC

• - international trade union organisation which
  has consultative status with the OECD
• TUAC represents views of organised labour in
  industrialised countries
• 56 national trade union centres in 30 OECD
  countries, covers 66 million workers.

4
OECD Guidelines application

• The Guidelines apply to MNEs operating in or
  from
• the 30 OECD member countries, plus currently nine
  non-OECD members Argentina, Brazil, Chile,
  Estonia, Israel, Latvia, Lithuania, Romania and
  Slovenia.
• Guidelines also apply to these companies
  operations worldwide.

5
Role of TU

• Check OECD Annual Report on Guidelines
• When a company breaches the Guidelines, TU can
  raise this case with the NCP
• Consult TUAC it works closely with ICFTU, WCL,
  ETUC and GUFs. (http//www.tuac.org)

6
Code of Conduct

• Is a written policy or statement of principles
  adopted voluntarily by a company to express its
  commitment toward a particular conduct
• NOT NEGOTIATED BUT UNILATERAL DECLARATION
• Code of conduct for business
• consumer rights, product safety or environmental
  protection
• ethical behaviour codes for employees
• International instruments to monitor the social
  responsibility of business
• ILO MNE Declaration
• OECD Guidelines for MNEs
• attempt by UN to set a global code

7
New Code of Conduct

• Four Major Characteristics
• Purely private, voluntary initiative (PVI)
• Response to the situation of poor labour
  standards created by the failure of national
  governments
• international application
• Cross-cutting application to suppliers and
  subcontractors

8
Definition of New Code of Conduct

• Commitments voluntarily made by companies,
  associations or other entities which put forth
  standards and principles for the conduct of
  business activities in the marketplace
• (Workers tool or PR ploy? by Dr. I. Wick)

9
Number of New Codes

• 246 codes (June 2000 by OECD study)
• 118 by individual companies, 92 by industry and
  trade associations, 32 by partnerships between
  stakeholders and 4 by inter-governmental
  organizations
• Only 163 mention monitoring
• Only 30 mention freedom of association, and
  only10.1 refer to ILO codes

10
Why New Codes are important for Trade Unions?

• New Codes are on labour practice

Great potential and also danger
Most companies adopt COC without involving trade
unions
So, they can be used as an excuse for having no
union
Truly applied, codes may establish ILSs as
binding international framework for responsible
corporate behaviour
So, unions involvement is vital
11
CSR and TU

• CSR could be a positive process for TU if
• - Strengthen FoA and the creation of unions
• Strengthen C.B
• Support organising
• Not only comply with the law but it goes beyond
  national legislation (socially and ethically
  responsible to stakeholders/local communities)
• Alliances of TU and civil society

12
Negotiated agreements and global labour relations

• INTERNATIONAL FRAMEWORK AGREEMENTS
• Instruments negotiated between a MNE and a Global
  Union Federation (GUF) concerning international
  operations of the company
• MNEs commit themselves to applying the same
  labour standards to their employees in all the
  different countries where they operate

13
Framework Agreements

• Implement Core Labour Standards
• Apply Decent working conditions
• Apply environmental standards
• Promote good labour practices

14
Major Framework Agreements

• IUF- Danone (1988), Accor hotel group (1995),
  Nestle (1996), Del Monte (2000) and Chiquita
  (2001)
• IFBWW- Ikea (1998), Faber-Castell (2000),
  Hochtief (2000)
• ICEM- Statoil (1998), Freudenberg (2000)
• UNI- Telefonica (2000), OTE (2001), Carrefour
  (2001)

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Codes of conduct and FA
Codes of Conduct International Framework Agreements
Unilateral actions Negotiations between workers and management
Not all Core Labour Standards are necessarily acknowledged All Core Labour Standards are explicitly acknowledged
Rarely address suppliers Usually include suppliers
Monitoring, when envisaged, is under the managements control Unions are called to participate in the implementation process
Feeble basis for dialogue Strong basis for dialogue between unions and management
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Important Aspects for FA

• Capacity of GUFs to engage in F.A. with a large
  number of MNEs
• Monitoring F.A.
• Capacity of MNEs to control subcontractors or
  supply-chains
• Extension of EWC versus GWC and strategic
  alliances between European Trade Unions and GUFs.
• Agreements between MNEs and GUFs for the
  implementation of monitoring of FA

17
International Instruments
International
ILCs
Framework Agreements
ILO Tripartite Declaration on MNCs
UN Global Compact
CFA
ILO Declaration on F.P.R.W.
OECD Guidelines for MNCs
Code of Conducts
Social Labelling
Regional Economic Agreement
Public
Private
National Labour Relation / Tripartite Committees
Labour Legislation
National
18
Policy and Strategy for T.U.

• Set up institutional mechanisms and capacities to
  fully utilize all the available international
  instruments
• Regular reporting
• Complaints procedures in case of violation (case
  CROATIA, asbestos)
• Multilateral approaches to problem-solving
• Importance of International, Regional, and
  Sub-regional trade union networks/IT and
  communication systems
• Networking / SoliComm portal
  http//www.solicomm.net/

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PROGRAMME FOR WORKERS ACTIVITIES OF THE ILO
TURIN CENTRE(ACTRAV) WWW.ITCILO.IT/ACTRAV

• ACTRAV-Turin