One of the three mechanisms of calling multinational companies to account, outside the courts, has come under criticism.
The OECD Guidelines for Multinational Enterprises have drawn fire from
OECD Watch, the network of 47 non-governmental bodies whose remit
includes testing their effectiveness.
NGO faultfinding is nothing new. But this sally comes at a sensitive
time. The UN has just brought in a complaints procedure to deal with
allegations of corporate breaches of its Global Compact principles, and
the UN Norms on the Responsibilities of Transnational Corporations are
out to review following representations from business groups.
OECD Watch claims that since 2000, when OECD members strengthened the
role of the national contact points (NCPs) that consider cases of
alleged non-observance, there is ‘no evidence that the guidelines have
helped to reduce the number of conflicts between local communities,
civil society and foreign investors’. It says, ‘As a global mechanism
the guidelines … are inadequate and deficient.’
The charge is that many NCPs take the companies’ side, fail to share
information and investigate allegations fully, wash their hands of
cases on the grounds that the company under scrutiny is not directly
responsible, cite ongoing legal proceedings to justify inaction, and
produce weak decisions. Of the 45 complaints submitted by NGOs, only
eight have been concluded, OECD Watch says. Six of the 20 relating to
multinationals’ supply chain responsibilities have been closed or
rejected outright.
The Department of Trade and Industry official responsible for the UK’s
NCP told EP: ‘The nature of NCP recommendations is taken from the text
of the guidelines, whose purpose is encouraging better corporate
behaviour and facilitating constructive dialogue. Adherence to the
guidelines is voluntary and confidentiality is an issue.’ The DTI is
currently consulting on the guidelines.
Kathryn Gordon, OECD senior economist in charge of the guidelines,
said: ‘There have been 106 specific instances of alleged
non-observance, and 72 of these have been taken up. That’s a pretty
good record, though it’s fair to say some NCPs have been more effective
than others. For that reason, we intend to examine business ethics
mediation processes in existence elsewhere and hope to pass on what we
have learned to NCPs.’
‘There’s an expectation on the part of trade unions and NGOs that this
is a quasi-legal procedure. It isn’t – NCPs are mandated to provide
conciliation and mediation services. They are not there to assign
blame. The guidelines have increased transparency and strengthened the
transparency-enhancing roles of embassy networks and national overseas
development programmes, which is changing the way governments,
institutions and companies think about these issues.’
