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Marking 40 YEARS of the OECD Guidelines for Multinational Enterprises

In June 2016, the OECD Guidelines for Multinational Enterprises (“the Guidelines”) – the OECD’s flagship instrument on responsible business conduct (RBC) – will celebrate its 40th anniversary. Since 1976, economics have globalized, and the impact of business on people and the planet has expanded. While OECD Watch members remain adamant about the need for international binding rules to regulate the activities of corporations, the OECD Guidelines can supplement such a binding framework and help strengthen the global system of governance of corporate activity. Periodic updates to the Guidelines have sought to keep them relevant and in step with changing times. The most recent update in 2011 extended the scope of the Guidelines and achieved improvements in the areas of human rights, due diligence, and value chain responsibility. Although governments adhering to the Guidelines have made a legally-binding commitment to set up National Contact Points (NCPs) to further their effectiveness, implementation remains patchy at best. Poor promotion and enforcement of the Guidelines by governments has significantly limited uptake of, and respect for, the Guidelines by businesses. This has constrained the overall impact and effectiveness of the instrument. Recognizing the gap between the Guidelines’ potential and their current impact, last year G7 leaders pledged to “strengthen mechanisms for providing access to remedies, including the NCPs,” and at the OECD, 38 ministers highlighted the necessity to “further strengthen the performance” of NCPs.

The current political momentum around the OECD Guidelines provides a long overdue opportunity to unlock their full potential. Immediate action is needed by governments to strengthen the effectiveness of the Guidelines as a force for ensuring that companies behave responsibly in their operations and business relationships around the world. On the occasion of this milestone anniversary, governments must demonstrate their commitment to making the Guidelines a relevant tool for governing today’s global economy. This briefing provides a “4 x 10” bullet-point plan highlighting four key features that give the Guidelines the potential to help ensure businesses behave responsibly. It also includes ten actions that governments must take to unlock that potential and to advance their legally binding obligations to further the effectiveness of the Guidelines.

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