1. Committee on Investment and Multinational Enterprises Working Party on the OECD Guidelines for Multinational Enterprises: Wednesday 13 December 2000

Report by UK NCP:

This meeting was attended by all NCPs and provided a useful run through of their activities. A wide variety of promotional activities are taking place. The majority of NCPs have established websites and nearly all have translated the Guidelines into their national languages. Some NCPs are operating a tripartite system (Government, Business, and Trades Unions) and many that haven’t still work closely with business, unions and, in some cases, NGOs. The vast majority of NCPs have held meetings with business and unions, and some are planning seminars to promote the Guidelines.

2. OECD Outreach Meeting on the Guidelines for Multinational Enterprises: Tuesday 12 December 2000

Report by UK NCP:

A well attended outreach event. Government officials from 32 non-adhering countries to the Declaration participated, including officials from capitals in Vietnam, Egypt and Ukraine. Other attendees included OECD member officials, Business and Industry Advisory Committee, Trades Union Advisory Committee, other labour representatives, International Labour Organisation, International Monetary Fund, and a variety of NGOs.

Although the event primarily focused on the Guidelines it also covered the other parts of the OECD Declaration on Investment. Presentations were made by OECD member representatives and the OECD Secretariat and this was followed by discussions. Awareness of the Guidelines and Declaration was very low in participating non-adhering countries. There was some suspicion that the Declaration was another Multilateral Agreement on Investment, and confusion on how the Guidelines related to other parts of the Declaration. Several countries expressed interest in adhering to the Declaration, e.g. Baltic states, but there is much to do to promote understanding of the commitments under the Declaration.

The discussions were at a general level and did not go into the detail, for example of implementing the guidelines in non-adhering countries. However, this was probably to be expected for a first event. It was an encouraging start but needs active follow up and direct contact with policy makers in capitals of non-adhering countries to properly raise awareness and promote adherence to the Guidelines.

The OECD Secretariat will be publishing a full report for the event.

3. OECD Outreach Meeting on the OECD Guidelines for Multinational Enterprises: 12 December 2000

This presentation is divided into three parts: A factual description of references in the Guidelines to cooperation and implementation in non-adhering countries; a description of the UK NCP’s experiences so far on issues raised with it concerning MNE activities in non-adhering countries; and possible ways of improving cooperation and implementation.

REFERENCES TO COOPERATION AND IMPLEMENTATION IN NON-ADHERING COUNTRIES

There are references to cooperation, general discussion and implementation in non-adhering countries in the Guidelines decision, texts and commentaries as follows:

"Since operations of multinational enterprises extend throughout the world, international cooperation in issues relating to the declaration [which includes the Guidelines] should extend to all countries"

The commentary expands on this and states that the reference provides for consultations with non-adhering countries on Guidelines matters including periodical meetings such as this outreach event or with individual countries to cover general and/or specific issues.

NCPs are required to respond to enquiries about the Guidelines from governments of non-adhering countries

On handling of specific issues by NCPs the texts state that:

"if issues arise in non-adhering countries, NCPs should take steps to develop an understanding of the issues involved, and follow the procedures set out for issues arising in adhering countries, where relevant and practicable".

The commentaries expand on this by highlighting some problems that may arise, such as not being able to bring interested parties together. They also state that conflicts with domestic laws, etc in non-adhering countries may make it more difficult to implement the Guidelines, and reiterate that the Guidelines are not intended to place MNEs under conflicting requirements.

However they also suggest ways an NCP may gain a full picture such as contacting the management firm in the home country and government officials in the non-adhering country.

Other issues covered here are that parties involved in any specific issue need to be aware of possible limitations in implementing in non-adhering countries and that Guidelines issues in non-adhering countries may be discussed in NCP meetings with a view to building expertise in handling issues arising in these countries.

These references recognise the difficulties involved in dealing with issues in non-adhering countries, but demonstrate adhering country determination to apply the Guidelines to MNEs wherever they operate as far as possible. The provisions also leave scope for development and discussion amongst us all. In the UK we welcome the clarification that the Guidelines are globally applicable and also the scope for further cooperation to improve the effectiveness of the Guidelines worldwide.

Since the revised Guidelines were agreed in June 2000 no issues involving non-adhering countries have been raised with the UK NCP. However, we have had two such instances in the last three years (obviously based on the previous Guidelines which were not so clear about the global applicability of the Guidelines)

I will now take you through the ways we tried to establish an accurate understanding of the issues. I will concentrate on the process involved rather than the issues or outcome.

CASE A

The UK NCP received details from the originator and asked the company Head Quarters in the UK for its comments and met company representatives.

We also used our embassy in the non-adhering country to establish facts, local reaction and government stance to assist our understanding. They provided information including numerous press cuttings and had also been approached themselves about the issue by a different party based in the non-adhering country (although not in connection with the Guidelines). There was no shortage of information as it was a high profile instance. On that occasion the embassy did not contact, or make representations to, the local or national government of the country. However, we did have evidence of the government’s views. The local press reported the raising of the issue with the UK NCP

CASE B

We received details from the originator and spoke to the company Head Quarters in the UK.

We also contacted our embassy in that country and they provided information including on the consultation process that the non-adhering country’s government had undertaken in relation to the issue.

We spoke to the London embassy of the country who offered to facilitate a meeting with its government to present their position if required.

By chance our Secretary of State for Trade & Industry was visiting the non-adhering country and was meeting the company involved. He took the opportunity to raise the matter with the chief executive of the company.

Again the local press reported that the issue had been raised with the UK NCP. Some welcomed this, whereas others thought it was a local problem which should not concern the UK Government. This demonstrates some of the sensitivities involved in considering issues in non-adhering countries.

Both of these cases provided a valuable opportunity to draw the MNEs attention to the Guidelines and demonstrate their global applicability. Given the high profile nature of the two issues before complaints were received it was not difficult for the UK NCP to obtain information. The complaints to the UK NCP were one element of larger NGO campaigns and were used as another avenue for putting pressure on the MNEs concerned. I am not sure how easily accessible information would be in the case of a less well known issue. We were satisfied that we had familiarised ourselves with the evidence so that we could make informed decisions.

It would be interesting in the discussions to hear of any other NCP and non-adhering governments experiences with any cases/issues.

POSSIBLE WAYS OF IMPROVING COOPERATION AND IMPLEMENTATION

I will divide this into areas for discussion of general and specific issues.

We feel that there is great value in this kind of debate and that it should continue.

The UK and the other NCPs are actively engaged in raising awareness and this is something we could explore, e.g. would non-adhering countries think it worthwhile to raise awareness in their own countries? Or, within their own governments, particularly those parts dealing with MNEs? This could be along the lines of "this is how adhering countries expect MNEs to act in your country". If so, how best can we achieve this – CIME outreach work (in the OECD or on a regional basis), dissemination of documents, articles in publications in non-adhering countries? Is there a role for social partners?

In the UK one method under consideration for promoting awareness is to use our embassies overseas when conducting their investment promotion work. So, any potential UK overseas investor requesting market information from a UK embassy would also receive a short explanation of the Guidelines and how they relate to them (including the message that when a UK MNE invests overseas the UK government expects them to behave in accordance with the Guidelines) and where to get further information. I would be interested in hearing your views on this.

Currently in considering any specific issue in a non-adhering country raised with the UK NCP we would primarily use our embassies overseas to make any initial contacts with non-adhering governments, does this seem the best way? We rely on our embassies’ knowledge on who best to contact, this seems sensible as the Guidelines cover a range of areas and non-adhering countries do not have NCPs. Is this appropriate or do you see a role for a single governmental contact in non-adhering countries or use of non-adhering country embassies in the NCP’s country?

Would non-adhering governments always want to know if an issue has been raised on an MNE activity in their country? If so, at what stage?

I can see a possible reluctance of NCPs to contact non-adhering governments as it may be viewed as unwelcome outside interference, for example if a case was raised that was already being considered in the court of a non-adhering country. The Guidelines state that non-adhering government’s officials could be approached "as appropriate", can anyone think of any examples when it definitely would and definitely wouldn’t be appropriate which could be used as guidance for NCPs?

Is it better to elaborate now before any issues are raised or deal with them on a case by case basis?

What about other interest groups being contacted in non-adhering countries? for example local campaigners – can non-adhering governments envisage any difficulties here?

I realise that I have asked far more questions than I have answered but hope that these initial thoughts will help in our discussions.

4. CBI National Conference: 6 November 2000.

Report by the UK NCP:

The NCP exhibited on the DTI stand at the conference exhibition with the aim of publicising the Guidelines among the companies and other exhibitors.

5. DTI press release of 27June 2000 - 'Caborn champions international code of conduct for multinational enterprises'

"A Code of Conduct aimed at improving corporate behaviour in Multinational Enterprises, including promoting labour standards and human rights, was given the green light by Ministers at the Organisation for Economic Cooperation and Development Conference in Paris today (Tuesday). On behalf of the UK Trade Minister, Richard Caborn, endorsed the agreement on the final day of the Conference after crunch talks with the Mexican delegation. The agreement will strengthen existing guidelines for MNEs and set down international standards of corporate behaviour expected by OECD member governments. Speaking from the OECD Ministerial Conference in Paris Mr Caborn said: "I am delighted to have reached an agreement on these guidelines which will make a significant contribution to sustainable development and help pave the way towards eliminating child labour and poor labour standards in the global workplace. "What is particularly pleasing is that already other non-OECD member countries have signed up for this Code Of Conduct - I very much hope that these guidelines will become an example of international best practice for responsible Multinational Enterprises operating around the world." The Guidelines have been agreed by all 29 OECD Member states, and, additionally, the governments of Brazil, Argentina, Chile and the Slovak Republic".