Ethical Performance
inside intelligence for responsible business


companies stand accused of snubbing OECD guidelines

October 2006

A number of companies have been accused of refusing to participate in the official complaints procedure for alleged breaches of the voluntary guidelines of the Organization for Economic Co-operation and Development on the behaviour of multinationals.

OECD Watch, a non-governmental organization that monitors the process, says that in 13 of about 50 cases of alleged breaches of the Guidelines for Multinational Enterprises so far filed by NGOs, companies have at some point refused offers to talk.

This has often brought the complaints procedure to a close in these cases, as National Contact Points (NCPs) in signatory countries, which are empowered to look into complaints, have no mandate to pursue matters further. OECD Watch says this is further evidence that the voluntary initiative is proving ineffective.

NCPs are obliged to investigate complaints, but the companies against which allegations are made do not have to respond.

Companies that have refused dialogue include three US chemical businesses - Cabot Corporation, Eagle Wings and OM Group. They have all failed to accept an invitation from the NCP, in this case the US State Department, to discuss allegations of breaching the guidelines while sourcing the mineral coltan in the Democratic Republic of the Congo.

The formal complaint was lodged in 2004 by Friends of the Earth-United States and the UK-based Rights and Accountability in Development (Raid). Although the NCP rejected the complaint, it suggested to the companies that they should have 'informal dialogue' with the complainants on outstanding issues.

However, the NCP says that none of the companies have taken up the offer.

Colleen Freeman, of Raid, told EP that NCPs are supposed to issue a public statement that a company has failed to co-operate in the complaints process, yet often do not do so. 'If companies knew that NCPs would issue such a statement, my guess is they would be much more inclined to engage,' she said. 'So we have a deadlock. Most NCPs have been unwilling to issue statements, so companies know there are no repercussions for not participating when complaints are filed.'

In new guidelines for NGOs on how to make and follow up complaints, OECD Watch warns that NCPs have 'deviated wildly' in their handling of complaints, and says fewer than ten of the 45 complaints submitted up to September 2005 had 'concluded in a manner that satisfied the complainants'.

However, Wesley Scholz, director of the Office of Investment Affairs at the US State Department, told EP: 'Often these issues are being raised on various fronts, such as through the International Labour Organization or via legal cases, and not just through the OECD guidelines. So sometimes a company will decide it wants to pursue the matter through more structured channels rather than through the more informal guidelines process'. He added that many complainants adopt an 'adversarial' approach that does not necessarily fit with the aims of the complaints procedure.

Further Information

3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter