Social and Labour Standards in the OECD Guidelines

Abstract

We have witnessed fundamental changes both domestically and internationally due to globalisation and free trade. Multinational enterprises (‘MNEs’) are at the forefront of these changes. While states in the Global North have benefited broadly from the opportunities offered by free international trade, developing countries in the southern hemisphere have often suffered from the negative impacts of globalisation, notably, serious violations of human rights and working conditions. In order to avoid these adverse side effects, increasing international attention has been devoted to the human rights obligations of corporations over the last 30 years. Particularly useful are the OECD Guidelines for Multinational Enterprises – the only instrument of corporate responsibility formally adopted by governments with a built-in grievance mechanism. As this analysis will show, these Guidelines can have a measurable impact – beyond the traditional categories of soft law and binding state law. In this article, possibilities for innovative national regulatory practice will be considered and light will be shed on the technique of ‘social linkage’, particularly on public procurement law with its unique mechanisms for social considerations. All these mechanisms lead to more coherence in international law and can be used to strengthen the impact of the OECD Guidelines.