Feedback on OECD Guidelines for Multinational Enterprises, 2023
The updates to the framing of international trade between the global South and North are warmly welcomed. It is read to strengthen the value and potential for global relevance of the OECD Guidelines (e.g., ‘foreign investments’ has been updated to ‘cross-border trade and investments’; ‘developing countries’ has been updated to ‘emerging and developing economies’ – NB, old formulation ‘developing countries’ has not been edited in chapter 2, b2)
The change in chap. 2 b2 from supply chain management to responsible business conduct is celebrated
- The Guidelines separate chapters ’human rights’, ‘labour rights’, Science, technology and innovation’, ‘consumer interests’, etc. while describing human rights risks under each chapter. It is recommended that the guidelines either explicitly organise the chapters to reflect that they fit under human rights, and/or write explicit references to relevant human rights in other chapters, e.g. science, technology and innovation, we identified the following relevant rights: The right to benefit from technological development, the right to material gains from inventions, the moral rights of authors, the right to privacy, the right to freedom of speech, the right to freedom from degrading treatment, the right to freedom from national hatred.
- Section 4 (not updated text) states that the Guidelines provide voluntary principles and standards. It is recommended to consider the status of the guidelines as ‘voluntary’, since they are increasingly used and recognized as foundational for other legal frameworks, e.g., the minimum safeguards of the EU Taxonomy for responsible investments, the CSRD, CSDDD etc.
- Section 11 & 12: It is recommended to explicitly name the foundation in the UNGPs for the Guidelines development, e.g., with reference to the substantial update in 2011.
- Element 2: “Obeying domestic laws is the first obligation of enterprises. The Guidelines are not a substitute for, nor should they be considered to override, domestic law and regulation. While the Guidelines extend beyond the law in many cases, they should not and are not intended to place an enterprise in situations where it faces conflicting requirements. However, in countries where domestic laws and regulations conflict with, or set lower expectations than the principles and standards of the Guidelines, enterprises should honour such principles and standards to the fullest extent which does not place them in violation of domestic law.”
- Comment: Since the OECD Guidelines present processes to prevent or mitigate adverse impacts, conflicts of standards are highly unlikely (and not yet seen in our practice). This is explicitly addressed by the source to the Guidelines, namely the UNGPs, that explicitly highlights, that human rights due diligence is distinct from legal compliance. We recommend: “Where a state mandates a business to have adverse impacts on an environmental, economic or social area (i.e., human rights, incl. labour rights), the business should seek to prevent or mitigate such impact to the extent possible, while complying with local law”.
- Element 4: “The Guidelines allow for a broad and flexible approach in identifying which entities may be considered multinational enterprises for the purpose of the Guidelines.”
- Comment: Why create this uncertainty that the UNGPs dealt with?