Ethical Performance
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guidelines on corporate behaviour to be updated

July 2007

A key international mechanism for overseeing company behaviour on issues such as human rights, bribery and information disclosure is set to be revised.

The OECD Guidelines for Multinational Enterprises have suffered sustained criticism for procedural and other failings since their adoption in 1976. Last revised in 2000, they needed to be looked at again, Manfred Schekulin, chair of the OECD Investment Committee, told a conference in Brussels last month.

‘This issue will be on the agenda next year,’ he said. The guidelines had ‘never been so much in the limelight’, he said in an allusion to a recent reference to them by the G8 group of leading industrial countries (see page six).

Schekulin singled out consumer interests as an area to be bolstered. ‘The role of the consumer is not reflected adequately in the guidelines, and only as something that has to be protected, as an object of CSR.

But consumers are the ultimate stakeholders of companies ... through their buying decisions.’ This opens up the prospect of consumer groups becoming greater users of the guidelines. Sune Skadegard Thorsen, of the Danish section of the International Commission of Jurists, said: ‘If extended to cover consumer rights, [the guidelines] would offer a degree of protection to consumers in developing countries.’

Schekulin said it had taken time for the National Contact Points (NCP), which handle complaints against companies under the guidelines, to ‘recognize their role as mediators, and enhancements were now needed’. Funding of the NCPs also had to be looked at, as most are run on a shoestring. Margaret Sutherland, responsible for the UK NCP, said it consists of three officials who together work the equivalent of one full-time post. An Australasian NCP told EP that the guidelines took up ‘about one per cent of my time’.

Insufficient capacity helps to explain the procedural shortcomings. Gareth Llewellyn of National Grid Transco, which has been the subject of a complaint in Zambia, said: ‘The first time we knew of the complaint was when we received it. This led us to conclude that there were more political motives than real concerns’ – one fax having come from the office of a competitor. Moreover, the objective of the proceedings was obscure. ‘We needed closure, but the process did not lead to this. It is not clear whether the guidelines’ remit is to hold companies to account or to improve social and environmental standards overseas.’

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