Review of the OECD Guidelines for Multinational Enterprises

The OECD is undertaking a major Review of its Guidelines for Multinational Enterprises. The review will update and improve the recommendations in the Guidelines, many of which have not been altered significantly since their adoption in 1976.

The OECD Guidelines for Multinational Enterprises (MNEs) are non-binding recommendations to enterprises, made by the thirty-two governments that adhere to them. Their aim is to help MNEs operate in harmony with government policies and with societal expectations. The recommendations provide guidance on appropriate business conduct across the full range of MNE activities. They are supported by follow-up procedures in the participating countries, which comprise all 29 OECD Member countries, and three non-Member countries (Argentina, Brazil and Chile).

OECD countries are undertaking the first review of the OECD Guidelines for Multinational Enterprises (the Guidelines) since 1991. This review is expected to be the most far-reaching since the adoption of the Guidelines in 1976. The current review will address the operating procedures as well as the text with a view to ensuring that the Guidelines play a more effective role in providing guidance for international business conduct.

An environment chapter added when the text was last revised in 1991 is being greatly enlarged and strengthened, including addition of sustainable development as the "wider goal".
Other new elements include a requirement for environmental
management systems to include measurable objectives and
targets accompanied by regular monitoring. Companies should
assess their environmental impacts over the full life-cycle of products and processes and should seek continual
improvement of environmental performance. Firms should also
stand ready to take precautionary action where there are threats of serious or irreversible damage to the environment or human health and safety.

The draft issued yesterday contains further strengthening of
some of these elements, including a requirement for firms to
act in a manner that "contributes to," rather than one
"consistent with," sustainable development. Firms are
called on to immediately report accidents and emergencies.
A new paragraph urges companies to engage in "partnerships
or initiatives that will enhance environmental awareness and
protection".