Ethical Performance
inside intelligence for responsible business


OECD prepares guidelines on social responsibility

March 2000

New guidelines on the conduct of multinationals have been drawn up by the organization for Economic Co-operation and Development (OECD).

The draft guidelines have been extensively rewritten and will be presented in their final form to OECD ministers in June.

In the past, the guidelines focused on corporate governance and regulation. They are now far more concerned with working conditions, corruption, the environment, the creation of ‘human capital’ and recognition of human rights.

OECD officials say a fundamental review was needed to promote a greater degree of social responsibility among multinationals.

Robert Ley, head of the OECD’s international investment and multinational enterprises division, said: ‘The public profile of the guidelines has fallen away. The crucial test now is the willingness of governments and companies to give them a new profile’.

Controversially, the OECD also seems determined to ensure the guidelines apply to the activities of multinationals in developing countries, not just the 29 industrialised nations which are members. Ley told EP: ‘We’re now discussing the idea of having these guidelines apply to the operations of multinationals wherever they operate in the world, rather than just in the territories of the OECD’.

‘The idea is to set a standard and a reference point for what a good company is supposed to be doing. We believe multinationals will perform better if they are aware of these guidelines.’

Acceptance by the business community is important because the guidelines are legally binding.

‘Sustainable development is now the catch cry of the guidelines, with greater focus on the responsibility of companies for their suppliers and other business partners’, Ley said.

The guidelines say multinationals ‘can fulfil an important role in promoting sustainable development through their investment activities, by engaging in mutually reinforcing actions in the areas of economic growth, job creation, environment protection and social welfare … particularly in countries where they operate’.

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