The OECD Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are recommendations made by the governments of member countries to companies operating within or from their territories. These Guidelines are a voluntary adoption instrument, which brings together a set of recommendations aimed at companies, for Responsible Business Conduct in a global context, in accordance with internationally recognized laws and standards.
The Guidelines are the only multilaterally approved and comprehensive code of Responsible Business Conduct that governments are committed to promoting.
The Guidelines arise from the adoption in 1976 of the OECD Declaration on International Investment and Multinational Enterprises, currently signed by 51 governments, including 38 member countries and 13 non-OECD countries. This Declaration commits governments to attracting international investment by setting clear conditions and promoting the positive contributions that business can make to societies.
The 2023 edition of the Guidelines provides updated recommendations for responsible business conduct across key areas, such as climate change, biodiversity, technology, business integrity and supply chain due diligence, as well as updated implementation procedures for the National Contact Points for Responsible Business Conduct.
- Brief presentation of the 11 chapters that make up the Guidelines :
Chapter I. Concepts and Principles
The Guidelines pillar: identifies fundamental ideas that contextualize the following chapters. The Guidelines are a set of recommendations that establish principles and standards of good practice, whose adoption is voluntary.
Chapter II. General Policies
It contains recommendations addressed to companies, including provisions such as implementing due diligence, addressing adverse impacts and engaging stakeholders.
Chapter III. Disclosure
It promotes greater transparency in the operations of companies, in order to respond to society's growing demands in terms of information. Companies must ensure the disclosure of information related to their activities, structure, financial situation, performance, etc. Companies' disclosure policies should be adapted to the nature, size and location of the company, taking due account of costs, the confidentiality of its business and other concerns relating to competitiveness.
Chapter IV. Human rights
Recognizes the impact of business activities on Human Rights, aligning itself with the UN framework, “Protect, Respect and Remedy” and with the Guiding Principles on Business and Human Rights that operationalize it. Companies must have a commitment policy that respects internationally recognized Human Rights, seeking to avoid and/or mitigate the adverse impacts with which they may be directly and/or indirectly involved.
Chapter V. Employment and Industrial Relations
It focuses on compliance with international labor standards, developed by the International Labor Organization.
Chapter VI. Environment
It presents recommendations for companies to improve their environmental performance by optimizing management and planning. Companies must protect the environment, public health and safety by, for example, implementing environmental management systems, assessing the environmental impact of their activities and/or setting measurable objectives with regard to their performance improvement. Companies must also provide information on the potential impacts of their activities on the environment, health and safety, make contingency plans and improve long-term environmental performance, providing adequate training to workers and improving awareness of environmental protection.
Chapter VII. Combating Bribery, Bribe Solicitation and Extortion
It builds on the work of the OECD in the fight against corruption as a way of leveling the playing field. Companies must not, directly or indirectly, offer, promise, give or request bribes or undue advantages, and must also resist solicitation of bribes and extortion. To this end, they must develop and adopt internal controls to prevent and detect situations of bribery and increase the transparency of their activities in the fight against corruption, for example, through publicly assumed commitments and promote employee awareness, through the disclosure of policies or measures taken.
Chapter VIII. Consumer interests
It builds on the work of the OECD, World Consumer Organization, International Organization for Standardization (ISO) and the United Nations, with the aim of encouraging companies to adopt fair trade practices and ensure the quality and safety of the products they supply. Companies must abide by correct and fair commercial and advertising practices, guaranteeing the quality and reliability of the goods and services they provide, meeting all legally required standards and providing accurate, verifiable and clear information with regard to warnings of health and safety information. Companies must also provide consumers with access to fair, quick, effective and easy-to-use extrajudicial mechanisms for conflict resolution, while respecting consumer privacy.
Chapter IX. Science and technology
It recognizes that companies are the main avenue for technology transfer and, as such, aims to promote technology transfer to host countries and contribute to their innovation capabilities. Companies must ensure that their activities are compatible with the technology policies and plans of the countries where they operate and contribute to the development of innovation capacity at national and local level, adopting practices that allow the transfer and rapid dissemination of technologies and technical knowledge. They must satisfy the needs of the local market with their activities, encouraging training.
Chapter X. Competition
It promotes the development of companies' activity in accordance with the competition legislation applicable to each of the jurisdictions where they operate. Companies must carry out their activities in accordance with applicable laws and regulations and must take into account the competition laws of all jurisdictions where their activities may have anti-competitive effects. They must refrain from anti-competitive agreements, namely with regard to price fixing, manipulated proposals, production restrictions or quotas or even market sharing or division. They must cooperate with competition authorities and promote employee awareness of the importance of complying with competition laws and regulations.
Chapter XI. Taxation
It covers fundamental recommendations on taxation, based on the OECD Model Convention on Taxation and the United Nations Model Convention on Double Taxation between developed and developing countries. Companies must comply with the tax obligations of the host countries that compete with them, namely the provision of relevant information for determining the taxes levied on their activities. They must also adopt tax risk management strategies to ensure that financial, regulatory and reputational risks are fully identified and assessed.
