The OECD Guidelines on Multinational Enterprises: Strengths and Weaknesses

Abstract

Multinational enterprises (MNEs) are both the propellant and outcome of globalization. In 2017, the top 100 global MNEs’ foreign operations represented 9 percent of world foreign assets, 17 percent of world foreign sales and 13 percent of foreign employment. Despite their significant importance and power over both international economy and well-being of people of present and future generations, there is not any conventional international law that regulates rights and obligations of the MNEs. The very first initiative to produce such a rule is the OECD Declaration on International Investment and Multinational Enterprises. The OECD Guidelines, with all of its strengths and weaknesses, is the only government-backed international instrument for responsible business conduct with a built-in non-judicial grievance mechanism. Therefore, despite all its weaknesses, the OECD Guidelines and its implementation is quite valuable for sustainable development, well-being of people of present and future generations, environmental and social progress worldwide, human and workers’ rights and so on. However, it is also clear that it needs to be improved with a prompt and broad reform. In this paper, the researcher examines the OECD Guidelines from a human rights perspective, introducing the existing legal framework, discussing its strengths and weaknesses, and concluding with certain recommendations.