The OECD Guidelines form part of the OECD Declaration on International Investment and Multinational Enterprises and are based on the UN Human Rights Charter, the ILO’s core labour standards (in German) and the Rio Declaration on Environment and Development (PDF: 15 KB, in German). They set out standards for the conduct of companies engaging in cross-border trade and investment. In this way, the Guidelines want to encourage these companies to contribute to sustainable development, especially in developing countries. Every company registered or based in a participating country is asked to act in accordance with the OECD Guidelines and thereby help promote the standards set out therein. The Guidelines apply in addition to domestic law. Whilst the Guidelines are not legally binding, the Federal Government still expects companies registered or based in Germany to comply with them whenever they engage in activities abroad.
The following organisations accredited with the OECD are involved in the development and implementation of the OECD Guidelines: BIAC for industry, TUAC for employees, and OECD Watch, an NGO. Since their adoption, a number of countries which are not OECD members have signed up to the guidelines (Argentina, Brazil, Colombia, Costa Rica, Egypt, Jordan, Kazakhstan, Lithuania, Morocco, Peru, Romania, Tunisia and Ukraine).
Content and nature of the Guidelines
The OECD Guidelines for Multinational Enterprises are an important and comprehensive international instrument for the promotion of responsible corporate governance. They are designed to inform and encourage companies as to how they can promote sustainable economic development in the following fields:
- Information policy
Multinational companies are asked to act in a transparent way and to build trust by disclosing information not only about their bottom line and financial performance, but also about the social and environmental impact of their activities and any other foreseeable risks well in advance. - Human rights
The 2011 revision included a separate chapter on human rights in the OECD Guidelines. It calls on multinational companies – irrespective of their size, sector, operational context and structure – to respect internationally recognised human rights as laid down in the Universal Declaration of Human Rights and the instruments specifying these. The new chapter is in compliance with the United Nations Guiding Principles on Business and Human Rights, which were also published in 2011. - Employment policy
This chapter covers the internationally recognised core labour standards of the International Labour Organisation (ILO), including freedom of association and free collective bargaining, the abolition of all forms of forced and child labour, and the elimination of discrimination in working life. Companies and employees’ organisations should work constructively together and promote the conclusion of effective agreements on pay and conditions. Potential consequences resulting from changes in commercial activity should be discussed in advance; where possible, local workers should be employed and their skills enhanced. - Environmental protection
Companies are to introduce an efficient internal environmental management system and transparent environmental reporting, to orient themselves to the precautionary principle, and to have effective contingency plans ready should damage to the environment occur. They should be constantly endeavouring to improve their environmental performance. - Fight against corruption
In order to fight corruption, companies should not offer, promise, grant or demand bribes directly or indirectly, and should reject demands for bribes. Also, they should make activities to combat corruption transparent (e.g. management control systems). - Consumer interests
In order to take account of consumer interests, companies are called on to apply fair business, marketing and advertising practices and to guarantee the safety and quality of their goods and services. This includes aspects like adequate product information and the protection of personal data. - Science and technology
Companies are called on to apply procedures which – whilst giving appropriate consideration to the protection of intellectual property rights – permit the transfer and rapid dissemination of technologies and expertise. - Competition
In order to protect competition, companies are expected to observe the rules of fair competition and not to form anti-competitive cartels. They are expected to comply with the rules on competition in the respective countries. - Taxation
Finally, in the field of taxation, companies should make their contribution to the public finances of the host countries, should comply with the tax rules and regulations of the countries in which they operate, and should co-operate with the tax authorities.
Multinational enterprises should undertake risk-based due diligence and maintain appropriate internal procedures to prevent their own activities causing or contributing to adverse impacts on matters covered by the Guidelines and address such impacts when they occur. Further to their own activities, they should also seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship. In this way, their duty of care extends to include a multinational enterprise’s supply chain.
National Contact Point for the OECD Guidelines for Multinational Enterprises
Every OECD member country and every non-OECD country that has committed itself to the OECD Guidelines (PDF: 624 KB, in German) is required to set up a National Contact Point (NCP).
The tasks of the NCP are:
- to raise awareness for the Guidelines among employers, employees and civil society, and to promote their application;
- to act as neutral mediators to settle disputes between the different parties in the case of complaints and indications regarding potential breaches of the Guidelines by German companies;
- to work together with other NCPs and the OECD in further developing the Guidelines, and, if necessary, to respond to the procedures which fall with in the responsibility of other NCPs;
- to answer general inquiries and specific questions arising from the application of the Guidelines.
The German NCP is based at the Federal Ministry for Economic Affairs and Energy (BMWi). In accordance with the affirmations in the 2015 G7 Schloss Elmau Summit Declaration and the National Action Plan for Business and Human Rights (NAP, 2016), the German NCP 2016 was reorganised and assigned directly to the Director-General for External Economic Policy at the Economic Affairs Ministry. It was also equipped with additional staff and given its own budget. In their Hamburg Summit Declaration of 2017, the G20 Heads of State and Government reaffirmed their support for out-of-court complaints mechanisms such as the NCP.
Close collaboration with ministries, social partners and civil society
The federal ministries whose remit touches upon the Guidelines have formed a group (Ressortkreis OECD-Leitsätze) where they regularly discuss these matters. In this body, all the decisions and measures of the NCP, current issues relating to the OECD Guidelines, and their further dissemination and the working methods of the NCP are closely coordinated and agreed by way of consensus. Chaired by the lead ministry, the Federal Ministry for Economic Affairs and Energy, the members of the group at present are the Federal Ministry of Finance, the Federal Foreign Office, the Federal Ministry of Justice and Consumer Protection, the Federal Ministry of Labour and Social Affairs, the Federal Ministry of Food and Agriculture, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, and the Federal Ministry for Economic Co-operation and Development. If necessary, additional ministries may be called upon to provide specific expertise.
The NCP and the ministries are furnished with advice by the OECD Guidelines Working Group. This group holds regular meetings with representatives of trade unions, industry associations and NGOs for discussions of fundamental issues relating to the OECD Guidelines and how to raise awareness of these and to promote compliance.
The current addresses and contact details of the NCPs can be found here.
The Annual Reports by the NCPs can be found here (in German). Please click here (in German) to read the reports by the Federal Government.