OECD Guidelines For Multinational Enterprises Research Articles

Los puntos nacionales de contacto como mecanismos no judiciales de acceso a la justicia. Un análisis desde los casos tramitados en Argentina y España

The objective of this work is to investigate the resolution me-chanism for specific instances of the National Contact Points of the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct as a non-judicial mechanism for access to justice. To this end, the cases processed in Argentina (period 2004-2021) and Spain (period 2001-2023) are analyzed, in order to establish limits and possibilities for their use by social actors, such as unions and NGO in the context of economic globaliza-tion and transnational law.

Main contents and implications of the 2023 revision of the OECD Guidelines for Multinational Enterprises*

Purpose This study aims to provide the main contents of the revision of the 2023 OECD Guidelines for Multinational Enterprises and suggest implications for the Korean government and multinational enterprises.Design/methodology/approach Following the brief history of the revision of OECD Guidelines for Multinational Enterprises, this study reviews and evaluates major substantive and procedural revisions of the 2023 OECD Guidelines, and then suggests countermeasures for Korean government and businesses.Findings The most significant substantive change of the 2023 revision is that expectations for environmental due diligence and disclosure obligations, including climate change and biodiversity, for multinational enterprises have been expanded and strengthened. Regarding procedural changes, the biggest change is the introduction of a basis rule for the National Contact Points for Responsible Business Conduct (NCPs for RBC) to judge each issue and a rule that the final statement must include follow-up details and deadlines, which is expected to strengthen the effectiveness of the NCP dispute resolution mechanism.Originality/value This study is the first academic paper to introduce major substantive and procedural revisions to the 2023 OECD Guidelines for Multinational Enterprises in Korea. This study also provides implications for the Korean government and companies following the 2023 revised OECD Guidelines for Multinational Enterprises as follows. First, the Korean government must establish a public–private partnership to closely communicate to prevent Korean companies from being harmed by failing to meet strengthening international Environment, Social and Governance (ESG) standards. In addition, Korean government should actively participate in ESG-related international forums, including the OECD, and strive to reflect the needs and interests of Korean companies. Second, the Korean NCP should strengthen its activities to prevent potential damage by expanding education and promotions for Korean businesses on related overseas legislative trends and NCP dispute case studies so that Korean companies can effectively deal with the strengthened ESG standards. Third, Korean multinational enterprises should preemptively establish an advanced ESG management system to seize new opportunities in the global supply chain previously concentrated in China and India in the process of reorganizing global supply chains according to the trend of strengthening ESG standards and the US value alliance strategy.

From Soft to Hard Law and Interpretation: the Case of the OECD Guidelines for Multinational Enterprises and the Role of the National Contact Points

From Soft to Hard Law and Interpretation: the Case of the OECD Guidelines for Multinational Enterprises and the Role of the National Contact Points

기후변화 문제 해결을 위한 기업책임경영(RBC)과 OECD 다국적기업 가이드라인의 역할

기후변화 문제 해결을 위한 기업책임경영(RBC)과 OECD 다국적기업 가이드라인의 역할

Downstream Human Rights Due Diligence: Informing Debate Through Insights from Business Practice

Abstract The United Nations Guiding Principles on Business and Human Rights conceive of human rights due diligence (HRDD) as covering potential impacts across value chains, including downstream. The proposed EU Corporate Sustainability Due Diligence Directive and the revision process of the OECD Guidelines for Multinational Enterprises have sparked renewed discussion on how and whether companies should conduct HRDD downstream to identify and prevent or mitigate adverse human rights impacts. Whilst some debate has occurred previously on downstream HRDD, this has predominantly centred on specific sectors, products and services where the links to egregious human rights harms may be more readily identifiable. This piece seeks to inform the current debate by broadening the examples of sectors, products and services and current business practice which demonstrate the critical need for, and ability of, companies to consider human rights risks downstream.

Calling multinational enterprises to account: CSOs, supranational institutions and business practices in the global south

AbstractHow do civil society organizations (CSOs) use state‐backed supranational institutions to call multinational enterprises (MNEs) to account? There are few studies of precisely how CSOs—union and other—use institutional power in global value chain (GVC) governance or the impact of institutional change on actor behaviour. To address this gap, we assess the impact of changes in the OECD Guidelines for Multinational Enterprises on CSO engagement with MNEs, comparing complaints lodged by CSOs before and after the Guidelines were revised in June 2011 to accommodate the rise in global prominence of the human rights and business frame. In our analysis, we focus on how constitutive and institutional power plays out in GVC governance, with special attention to the impact of institutional change on actor behaviour. Our analysis reveals that this state‐backed mechanism provides CSOs with a structure through which to address human rights violations in some MNEs’ supply chains but also that, despite its high degree of reflexivity, ongoing design flaws limit its capacity to address the uneven distribution of power not only between CSOs and MNEs, but among CSOs themselves. In doing so, we draw attention to the need for further research on the dynamic multilevel interactions between the configuration and adjustment of supranational institutions and how these mediate CSO and MNE interactions.

OECD National Contact Point Specific Instances: When ‘Soft Law’ Bites?

Abstract This article explores procedures before National Contact Points (NCPs) that are tasked with the implementation of the OECD Guidelines for Multinational Enterprises, and their use as a mechanism for the resolution of disputes between corporates and stakeholders in their business conduct. The fruit of a ‘soft law’ framework, NCPs offer a non-judicial mechanism in which the parties may use NCPs’ ‘good offices’ to broker agreement using mediation or conciliation. The article examines the scope of NCPs’ competence and the potential diversity of outcomes. Although NCP procedures are ultimately non-binding, this article explores various ways in which this ‘soft law’ mechanism may ‘bite’, against the backdrop of the growth in sustainable finance, sustainability regulation, and the growing number of disputes relating to responsible business conduct. The article considers whether, by means of the interaction of the NCP mechanism with these emerging fields, we may see the mechanism start to ‘bite’.

Developing Evidence-Based Alternatives to Dual Salary Systems

Abstract. The United Nation's Sustainable Development Goal (SDG) 8.5 aims to “achieve equal pay for work of equal value” globally by 2030. This goal conflicts with a widespread and continuing practice of paying skilled workers from higher-income economies working in lower-income settings more than their host worker counterparts. This brief summarizes research that has found that dual salaries undermine host colleagues' sense of wage justice, work motivation, and team relations. At organizational levels, they fuel turnover, increase brain drain, and reduce mental well-being of workers. Higher ratios fuel a “double demotivation” – extending to international staff who overrate their own abilities and reduce their effort at work. International, multisector evidence shows conventional dual salaries to be neither compatible nor to align with the SDGs. Organizational options for meeting SDG 8.5 identified in civil society groups include reducing dual salary ratios and implementing single salary systems at a national level. We offer three macro policy frameworks (Project Fair's Principles and Standards of INGO Fair Reward, the UN Global Compact, and OECD Guidelines for Multinational Enterprises) that can serve to render salary systems more facilitative of the SDGs and the Decent Work Agenda.

OECD National Contact Points as Sites of Effective Remedy: New Expressions of the Role and Rule of Law within Market Globalization?

AbstractNational Contact Points (NCPs), which support the OECD Guidelines for Multinational Enterprises, are often invoked as a reliable state-based mechanism for holding transnational corporations accountable for business-related human rights abuses. The objective of this article is to scrutinize the ability of NCPs to offer effective remedy through the lens of an often-quoted success story (the case of the post-colonial brewery Bralima-Heineken at the Dutch NCP) and through a few existing studies that examine factors that curtail or enhance the possibility of NCP mechanisms to deliver effective remedy. Based on these findings, we suggest specific ‘actions for effectiveness’ in the form of recommendations for improving NCPs as a tool to deliver effective remedy. Zooming out, we extend some general observations on how our findings illustrate that NCPs are expressions of a larger systemic problem surrounding the role of law within market globalization and the impact of economic liberalization on the making of norms, changing legal authority and basic fairness under conditions of stark power imbalance. Supporting this approach are historical factors which make the OECD Guidelines and NCPs ripe for such conceptualization.

Accountability beyond Corporations: The Applicability of the OECD Guidelines for Multinational Enterprises to Non-profit Organisations

Abstract The purpose of this article is to investigate the degree to which the OECD Guidelines for Multinational Enterprises – meant for businesses – apply to Non-Profit Organisations’ (NPOs) operations and accountability. Based on a legal analysis of complaints handled by the National Contact Points (NCPs) in Norway, Switzerland, and the United Kingdom against NPOs, this paper shows that OECD Guidelines apply to certain types of NPOs, even if these organisations are by nature non-profit. It presents three conditions under which the OECD Guidelines can apply to NPOs: first, the NPO needs to operate in at least two countries; second, it must operate within a signatory state of the OECD Guidelines; and third, the OECD Guidelines violation must have occurred in relation to the business-activity of the NPO.

The Divergent Practices of ncp s under oecd Guidelines for Multinational Enterprises: Time for a More Uniform Approach?

The Divergent Practices of ncp s under oecd Guidelines for Multinational Enterprises: Time for a More Uniform Approach?

Power resources and supranational mechanisms: The global unions and the OECD Guidelines

This article uses the power resources approach to analyse the Global Union Federations’ (GUFs) use of the specific instances mechanism associated with the OECD Guidelines for Multinational Enterprises. While this mechanism has serious limitations, it has proved to be a useful tool when combined with public campaigns and the exercise of other power resources at multiple scales. This is so, we argue, because the fact that multi-national enterprises themselves operate across national boundaries creates an incentive to engage power resources at a supranational level, as well as within the countries where they, or their suppliers, are present. As this finding suggests, consideration of unions’ power resources benefits from deeper consideration of the multi-scalar and interrelated character of union action and of the role that intermediary coordinating organizations like GUFs play in supporting the exercise of power at the supranational level.

Be careful what you wish for: a European perspective on the limits of CSR in the legal profession

ABSTRACT Law firms, bars and lawyers associations qualify as ‘enterprises’ in the sense of all international CSR norms such as the UN Global Compact, the UN Guiding Principles, the OECD Guidelines for Multinational Enterprises and ISO 26000 Guidance on Social Responsibility. Thus, these CSR norms apply to law firms and lawyers in principle. Lawyers are, however, not only service providers. They have also an official function based on human rights and rule of law guarantees of access to justice and the courts. Therefore, the application of CSR norms has to be adapted to the specific role and duties of the lawyers. This applies in particular to their capacity (1) as enterprises and suppliers of services, (2) as gatekeepers concerning the ‘CSR-compliance’ of their clients, and (3) as ‘legal’ advisors. An important element is lawyers’ independence. Besides certain legally defined responsibilities, lawyers are not to be identified with their clients and their deeds. A more far-reaching responsibility, based on ‘social expectations’ in line with the UN Guiding Principles, risks undermining the independence of the attorneys and their role in the administration of justice as the examples from the Nazi regime and McCarthy era show. Be careful what you wish for.

What BlackRock Inc. Gets Right in its Newly Minted Human Rights Engagement Policy

In March 2021, BlackRock Investment Stewardship published a short but consequential document titled “Our approach to engagement with companies on their human rights impacts.” This represents a significant move by the investment management firm into the global “business and human rights” policy debate. Based in New York City, BlackRock Inc. is the world’s leading investment firm with assets under management worth close to $9 trillion. A publicly traded company, it holds at least a 5% stake in more than half of the firms in the S&P 500. The value of its stock has increased 300% over the last decade. BlackRock’s priorities for 2021 include engaging with firms “whose business practices have breached international norms set forth by the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises.” What does BlackRock get right in its newly minted global policy on international human rights? The answer to this question might not be what you expect. If human rights are to be considered at all, US asset managers are strongly compelled to consider them only in terms of their instrumental and material value to investors. This situation creates a conundrum for decision makers at firms like BlackRock, since the calculated instrumentalization of human rights for shareholder gain might well be seen to debase the very foundation of human rights. So, what are BlackRock’s people to do if they want to stay within the bounds of US fiduciary law and client expectations while upholding human rights, rather than undermining them? This and other questions are answered in this short essay, published on the Harvard Law School Forum on Corporate Governance in April 2021.

OECD 다국적기업 가이드라인의 이행체제와 실효성 향상에 관한 고찰

기업책임경영에 관한 대표적인 국제합의인 OECD 다국적기업 가이드라인(OECD Guidelines for Multinational Enterprises)은 이행규정을 포함하고 있으며, 이러한 규정의 적용으로 사실상의 효력을 인정받고 있다. 가이드라인은 가입국들의 국내연락사무소(NCP)의 활동, 투자위원회(Investment Committee)의 의사소통 및 가이드라인의 내용의 명확화 기능, 다양한 이해관계자들과의 연계를 통하여 그 이행을 촉진하는 체계를 구축하고 있다. NCP들의 이의제기 사건 처리는 가이드라인의 이행에 핵심적 역할을 하며, 조정 등 대체적 분쟁해결 메커니즘을 활용하여 당사자들의 쟁점 해결에 기여하는 특징을 갖는다. 이와 더불어 가이드라인은 홍보 및 정보 제공, 사전대책 의제, 동료평가 등 협력과 교류를 통한 이행 촉진 체제를 구축하고 있다.<BR> 그럼에도 불구하고 가이드라인은 여전히 법적 구속력이 아닌 가입국의 자발적 이행에 의존하여야 하는 한계를 가지며, 가이드라인의 이행을 둘러싼 문제점들 역시 지속적으로 지적되고 있다. 이러한 문제점들을 극복하고 가이드라인의 이행을 촉진하기 위하여, 각국 NCP들의 기능적 동등성을 달성하기 위한 NCP들의 역량 강화, 이의제기 사건 처리에 있어서 각국 NCP들의 결정의 조화와 협력, 가이드라인 내용의 국내법 및 국가 정책에의 반영, 기업, 근로자단체, 시민사회단체를 포함한 다각적 이해관계자들과의 연계, 실사지침과 같은 가이드라인의 내용의 구체적 기준 마련 등의 방안들을 실현하기 위한 노력이 지속, 강화되어야 할 것이다.

Contributory Fault under International Law: A Gateway for Human Rights in ISDS?

Abstract The intersection between foreign investment and human rights is gaining attention, as is evident from an increasing number of investment treaty awards analysing legal issues relating to human rights. In the recent International Centre for the Settlement of Investment Disputes (ICSID) arbitration of Bear Creek v Peru, Philippe Sands QC posited, in a dissenting opinion, that the investor’s contribution to events—ie protests against its allegedly adverse environmental impact and disregard of indigenous rights, namely resulting from its ‘inability to obtain a “social licence”’—which led to the unlawful expropriation of its investment, was ‘significant and material’. He further noted that the investor’s ‘responsibilities are no less than those of the government’ and found that damages should thus be reduced. Last year, the Netherlands adopted a new model bilateral investment treaty (BIT), which allows tribunals to ‘take into account non-compliance by the investor with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises’ when assessing damages. These recent developments shed light on how states and tribunals, as part of their decision-making process, can take into account human rights in practice, and crucially in respect of damages analyses. By first dissecting the concept of contributory fault, then shedding light on the intersection of investment treaty law and human rights, as elucidated in recent jurisprudence, this article questions whether there now exists a gateway for human rights obligations (soft or hard) in the investment treaty arbitration realm through the concept of contributory fault.

Research Handbook on Labour, Business and Human Rights Law, edited by Janice R.Bellace and Beryl terHaar. Edward Elgar Publishing, Cheltenham, UK, 2019, 528 pp., ISBN: 978‐1‐78642‐310‐7, £195.00 (US$290.00)

Research Handbook on Labour, Business and Human Rights Law, edited by Janice R.Bellace and Beryl terHaar. Edward Elgar Publishing, Cheltenham, UK, 2019, 528 pp., ISBN: 978‐1‐78642‐310‐7, £195.00 (US$290.00)

Community-Related Voluntary Standards

Businesses have long been called upon to comply with a range of formal laws and regulations in various areas related to sustainability-related responsibilities including laws and regulations pertaining to the environmental impact of their operations, the employment relationship, working conditions and health and safety standards. However, apart from satisfying the requirements of local governments with respect to permits and licenses necessary for engaging in certain activities in the community, businesses generally are not heavily constrained by legal guidelines with respect to their community involvement and development activities. This is an area in which voluntary standards have played an important role in providing business with ideas for objectives for their community involvement. Although voluntary standards focusing specifically on the relationship of businesses and the communities in which they operate are still evolving, lessons can be drawn from many widely recognized normative frameworks, principles and guidelines such as the United Nations Sustainable Development Goals, the United Nations Global Compact, the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights and the Future-Fit Business Framework. Specialized standards can be used as reference points for support of sustainability-related initiatives in local communities, such as requiring that recipients of grants and other investments for sustainable sourcing and agricultural activities adhere to the guidance developed by the Sustainable Agriculture Initiative Platform. Additional guidance comes from guidelines established for companies engaged in extractive activities where the potential for adverse impact on local communities is especially high (e.g., Equitable Origin). The ISO 26000 Guidance on Social Responsibility includes community involvement and development among its core subjects and businesses and other organizations will also be impacted by relevant standards on their key stakeholders, particularly investors, that require attention to responsible actions toward local communities (e.g., Principles for Responsible Investment and IFC Performance Standards on Environmental and Social Sustainability) Impacts on local communities are also required by various voluntary sustainability reporting frameworks.

The Role of Transnational Private Regulation in Mitigating Artificial Intelligence Risks

The paper explores the role of transnational private regulation like certification in addressing human rights challenges posed by artificial intelligence (AI). It first explores the human rights challenges AI may pose. It analyses to which extent and under which conditions transnational private regulation may be effective in addressing human rights risks in general. It then turns to the role of transnational private regulation in connection with AI. It emerges compliance with human rights should partly be embedded in AI and partly be shaped through external risk management when developing and deploying AI. Transnational private regulation may play a role in both. For example, it may indicate which aspects of human rights compliance should be embedded (and provide tools to realize this) and which aspects should be implemented through external risk management. In connection with the latter it is observed human rights due diligence as incorporated in the United Nations Guiding Principles on Business Human Rights (UNGP) or OECD Guidelines for Multinational Enterprises may provide guidance to support external risk management.

Social and Labour Standards in the OECD Guidelines

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.