OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES
The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from adhering countries. They provide non-binding principles and standards for responsible business conduct in a global context consistent with applicable laws and internationally recognised standards. The Guidelines are the only multilaterally agreed and comprehensive code of responsible business conduct that governments have committed to promoting.
The OECD Guidelines for Multinational Enterprises are an annex to the OECD Declaration on International Investment and Multinational Enterprises. They are recommendations providing principles and standards for responsible business conduct for multinational corporations operating in or from countries adhering to the Declaration. The Guidelines are legally nonbinding, but the OECD Investment Committee and its Working Party on Responsible Business Conduct encourage implementation among adherents. Originally, the Declaration and the Guidelines were adopted by the OECD in 1976. The Guidelines were subsequently revised in 1979, 1982, 1984, 1991, 2000 and 2011.
The Guidelines cover business ethics on a range of issues, including:
- Employment and industrial relations
- Human rights
- Information disclosure
- Combating bribery
- Consumer interests
- Science and technology
In addition, the OECD has developed specific guidance in a number of sectors to help enterprises implement the Guidelines and proactively identify risks of adverse impacts. These sectors include extractives, mineral supply chains, agricultural supply chains, garment supply chains, and the financial sector. The work of the National Contact Points in support of this is called the “proactive agenda.’’
GLOBAL REPORTING INITIATIVE (GRI)
The Global Reporting Initiative (known as GRI) is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption.
Under increasing pressure from different stakeholder groups – such as governments, consumers and investors – to be more transparent about their environmental, economic and social impacts, many companies publish a sustainability report, also known as a corporate social responsibility (CSR) or environmental, social and governance (ESG) report. GRI’s framework for sustainability reporting helps companies identify, gather and report this information in a clear and comparable manner. First launched in 2000, GRI’s sustainability reporting framework is now widely used by multinational organizations, governments, small and medium enterprises (SMEs), NGOs and industry groups in more than 90 countries. In 2017, 63 percent of the largest 100 companies (N100), and 75 percent of the Global Fortune 250 (G250) reported applying the GRI reporting framework.
GRI provides the world’s most widely-used framework for producing sustainability reports. The GRI Sustainability Reporting Framework enables large and small companies, non-profit organizations and government bodies worldwide to assess their sustainability and disclose the results. Transparency through reporting on environmental, social and governance (ESG) factors drives the sustainability of individual organizations and, ultimately, the global economy. GRI’s key goal is to make sustainability reporting mainstream.
The OECD Guidelines for Multinational Enterprises and the GRI Sustainability Reporting Framework are based on and promote the same internationally agreed standards and principles for responsible business conduct, including social and human rights and economic and environmental matters. The GRI Sustainability Reporting Framework provides guidance on how to measure sustainability performance and the OECD Guidelines for Multinational Enterprises a benchmark to assess such performance.
Today’s Memorandum of Understanding (MoU) aims to establish a three year program to encourage companies to use both the OECD Guidelines for Multinational Enterprises and the GRI Sustainability Reporting Framework. The MoU also outlines the way GRI and OECD can work together to make use of the synergies between the two instruments and strengthen cooperation in other common areas of mutual interest.
Mervyn King, Chairman of the Global Reporting Initiative’s Board of Directors, said: “We welcome today’s step forward in our work with OECD. GRI’s mission is to mainstream ESG reporting worldwide. By working with OECD, we can help responsible multinational enterprises lead the way to a sustainable future.”
Richard Boucher, OECD Deputy-Secretary General, concurred: “This MoU not only attests to the excellent co-operation that already exists between the OECD and the GRI but also to a common determination to assist enterprises to become more responsible corporate citizens.”
SA8000 is an auditable certification standard that encourages organizations to develop, maintain, and apply socially acceptable practices in the workplace. It was developed in 1989 by Social Accountability International, formerly the Council on Economic Priorities, by an advisory board consisting of trade unions, NGOs, civil society organizations and companies. The SA8000’s criteria were developed from various industry and corporate codes to create a common standard for social welfare compliance.
SA8000 certification is a management systems standard, modeled on ISO standards. The criteria require that facilities seeking to gain and maintain certification must go beyond simple compliance to the standard. Prospective facilities must integrate it into their management practices and demonstrate ongoing compliance with the standard. SA8000 is based on the principles of international human rights norms as described in International Labour Organisation conventions, the United Nations Convention on the Rights of the Child and the Universal Declaration of Human Rights. It measures the performance of companies in eight areas important to social accountability in the workplace: child labour, forced labour, health and safety, free association and collective bargaining, discrimination, disciplinary practices, working hours and compensation.
It also requires compliance with eight performance criteria, as outlined on the Social Accountability International website.
- Child Labor: No use or support of child labor; policies and written procedures for remediation of children found to be working in situation; provide adequate financial and other support to enable such children to attend school; and employment of young workers conditional.
- Forced and Compulsory Labor: No use or support for forced or compulsory labor; no required ‘deposits’ – financial or otherwise; no withholding salary, benefits, property or documents to force personnel to continue work; personnel right to leave premises after workday; personnel free to terminate their employment; and no use nor support for human trafficking.
- Health and Safety: Provide a safe and healthy workplace; prevent potential occupational accidents; appoint senior manager to ensure OSH; instruction on OSH for all personnel; system to detect, avoid, respond to risks; record all accidents; provide personal protection equipment and medical attention in event of work-related injury; remove, reduce risks to new and expectant mothers; hygiene- toilet, potable water, sanitary food storage; decent dormitories- clean, safe, meet basic needs; and worker right to remove from imminent danger.
- Freedom of Association and Right to Collective Bargaining: Respect the right to form and join trade unions and bargain collectively. All personnel are free to: organize trade unions of their choice; and bargain collectively with their employer. A company shall: respect right to organize unions & bargain collectively; not interfere in workers’ organizations or collective bargaining; inform personnel of these rights & freedom from retaliation; where law restricts rights, allow workers freely elect representatives; ensure no discrimination against personnel engaged in worker organizations; and ensure representatives access to workers at the workplace.
- Discrimination: No discrimination based on race, national or social origin, caste, birth, religion, disability, gender, sexual orientation, union membership, political opinions and age. No discrimination in hiring, remuneration, access to training, promotion, termination, and retirement. No interference with exercise of personnel tenets or practices; prohibition of threatening, abusive, exploitative, coercive behavior at workplace or company facilities; no pregnancy or virginity tests under any circumstances.
- Disciplinary Practices: Treat all personnel with dignity and respect; zero tolerance of corporal punishment, mental or physical abuse of personnel; no harsh or inhumane treatment.
- Working Hours: Compliance with laws & industry standards; normal workweek, not including overtime, shall not exceed 48 hours; 1 day off following every 6 consecutive work days, with some exceptions; overtime is voluntary, not regular, not more than 12 hours per week; required overtime only if negotiated in CBA.
- Remuneration: Respect right of personnel to living wage; all workers paid at least legal minimum wage; wages sufficient to meet basic needs & provide discretionary income; deductions not for disciplinary purposes, with some exceptions; wages and benefits clearly communicated to workers; paid in convenient manner – cash or check form; overtime paid at premium rate; prohibited use of labor-only contracting, short-term contracts, false apprenticeship schemes to avoid legal obligations to personnel.