P.A. 2009-2010

OECD Guidelines, its pros and cons

Volet 3 : Normes OCDE

Mardi 8 août 2006, Reinford Mwangonde, 15494 signes.
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August 2006
Reinford Mwangonde
Citizens For Justice (CFJ) - Malawi
Box 1584, Lilongwe, Malawi

One of the main goals for the foundation of the Organization for Economic Co-operation and Development (OECD) forty years ago was to promote free market policies and Trade. The idea of free market policies propagated globalization which is fueled by Foreign Direct Investments-(FDI). In simpler terms, FDI may mean the expansion of Multinational Corporations from the Northern-western rich countries into the southern-third world countries in the name of job outsourcing and bringing development to the third world countries and also or expanding shares on the part of the companies. These multinational corporations spread into third world countries with the idea of making huge profits which sometimes have lead to the violations of human rights and also lack of Corporate Social Responsibilities on the part of some companies while camouflaging under the banner of bringing development, globalization and promoting trade. The idea of the OECD guidelines on Multinational Enterprises was meant to check on corporations from the OECD countries from violating human rights and standing up on Corporate Social Responsibilities while they are doing business in third world countries.

The OECD guidelines were drafted by counties whose companies conduct business in most third world countries. This means that chances are high that the countries that drafted the OECD guidelines on Multinational Enterprises would not create hash guidelines to hurt the corporations that are from the same countries. In most cases, corporations lobby Lobby Groupement créé dans le but de pouvoir influencer des décisions prises habituellement par les pouvoirs publics au profit d’intérêts particuliers et généralement privés. La plupart des lobbies sont mis en place à l’initiative des grandes firmes et des secteurs industriels.
(en anglais : lobby)
to policy makers on soft trade regulations or some trade deals. There is an element of a conflict of interest here because many political leaders in western countries receive financial help from corporations to fund their political campaigns. How do we gauge that the OECD guidelines that were drafted by OECD countries which receive huge funds in lobbying from the corporations were done in good faith to protect the third world countries ? I may be wrong, but I am sure that may be there were no delegates from third world countries during the drafting of the OECD guidelines. How is the impartiality of the OECD guidelines guarded in this regard ?

In order to have a plain level field, there should be a common consensus on issues by accommodating assorted ideas. Most of the countries that drafted the OECD guidelines are not frankly affected by the actions of the corporations that derive from the same OECD countries, but instead the most people who are highly affected are the ones that are in the third world countries who may be did not even take part in the drafting of the guidelines. If the OECD countries were really stern of protecting the rights of people in the third world countries from “corporate impunity” they should have invited third world countries to participate in drafting the guidelines since they are the ones that are highly affected. For me, the OECD guidelines were made by the rich western countries to be used by third world countries. The same western countries that control the World Trade Organization and refusing to lift subsidies on their farmers so that farmers from third world countries also sale their products at the same price, the same rich countries which are home to companies like Monsanto, Shell, BP and many other companies which violate the fundamental and constitutional rights of poor people in the third world countries. In summation of my opinions, the OECD guidelines are a cosmetic tool for some western countries to try and show some empathy for third world countries about the violation of their fundamental rights by some large corporations, while in actual sense the same western countries are major beneficiaries of excessive profits made by large corporations from investing in third world countries through hook or crook.

On the flip side, OECD guidelines are one of the superlative voluntary tools available for NGOs and communities to be used against the violation of human rights by multinational corporations if only they were to be used in full compliance, supplementary and enhanced results would have be realized as if the guidelines were obligatory. The guidelines act as basic principles to persuade and promote corporate and social responsibilities on the part of companies so that the people’s rights are respected in third world countries. Much as the OECD guidelines may be one of the best instruments globally to act as a basis of principle in bringing social and corporate responsibilities, the mechanism in place to support this cause are not universal. By this, I mean that the National Contact Points that are used as disciplinary courts for corporations that violate the rights of the people in third world countries are taken to accountability only exist in member countries of the OECD and do not exist in countries that are not members of OECD. In the aspect of a hypothetical situation where there is a company from Tanzania doing business in a country like Malawi and its violating some of the best basic principles of promoting social and corporate accountability which are underlined in the OECD guidelines in a serious manner, that company would not be made accountable using the principles of OECD guidelines on MNEs as the host country is not a member of the OECD countries. In this regard, the OECD guidelines would not be useful to the people of Malawi. Even if the company doing business in Malawi was from the OECD member country, the NGO or Community Based Organization launching the complaint should try and link up with some organization in the host country of the company-this sometimes cannot be easy as most NGOs in the third world countries are under-resourced and this becomes pretty difficult to convince some NGOs in the western countries to take up these causes. In summation, I would label the OECD guidelines as being slightly practical, as the record so far has only shown that they provide or act as basic principles for some companies to comply with, but they are not obligatory and some companies choose to disrespect them.

The fact that the OECD guidelines are not compulsory, it may vividly mean that they will never meet the demands of many NGOs and communities who are impacted by the actions of the multinational corporations globally. Most NGOs and communities globally call for the total respect for their fundamental rights and for the total compliance of the basic principles to bring social and corporate responsibilities by many corporations which are reluctant to take efforts to fulfill these calls. Worse still, most multinational corporations happen to operate in weak governance zones and as such, they get away with the primary legal laws of the countries in which they operate and hence the communities have nowhere to turn to as even their own countries lack the capacities to execute the primary legal laws. In some cases where communities try to use such primary legal documents of the land, the government officials get bribed by the executives of the corporations and as such the communities become the victims due to the lack of enforcement of the only legal laws that could have sheltered them from corporate impunity.

My experience of the OECD guidelines is like what some International relations gurus argue that there is no international law as there is no international police to enforce such a law. Where there is a law existing, there is policing involved. In this aspect, some people argue that the UN is a toothless Inter-governmental organization. Why did I bring this correlation ? The OECD guidelines are not mandatory, they are not a law. They are a voluntary tool and just having this in mind makes some corporations and countries not even tempt to abide by them. One of the countries that talks about the respect of human rights is the United States, but its NCP has a bad record of denying in accepting cases brought by difference NGOs from across the globe. Why does the US-NCP keep on refusing these cases if it is really serious about protecting the rights of people in third world countries ? The answer is clear-it’s because the US knows that no one will questions its decision or attitude as there is no any policing for the OECD guidelines as they are not mandatory. This is quite a sad experience considering that the OECD guidelines are suppose to create a basis of which future Future Contrat à terme (un, trois, six mois...) fixant aujourd’hui le prix d’un produit sous-jacent (titre, monnaie, matières premières, indice...) et devant être livré à la date de l’échéance. C’est un produit dérivé.
(en anglais : future)
legal binding and obligatory guidelines can be formed and where compliance now will mean better results for the future Future Contrat à terme (un, trois, six mois...) fixant aujourd’hui le prix d’un produit sous-jacent (titre, monnaie, matières premières, indice...) et devant être livré à la date de l’échéance. C’est un produit dérivé.
(en anglais : future)
of the OECD guidelines and good human rights record for the countries that support the total compliance of the guidelines.

The denial of some NCPs to take up cases hits a double blow when NGOs and communities cannot take their cases anywhere else as there is no process so far in place to appeal for such decisions. In this regard, the NGOs or some communities become losers as they do not have any other choice to take since the only NCP which could have handled their case has turned it down. NCPs need to be more steadfast in promoting and fulfilling the principles and standards contained within OECD guidelines. The OECD member countries should come up with a resolution that makes NCPs taking up cases as a must and any NCPs that deny taking up any case should provide full explanations of why it has taken the decisions it has to the Business and Ethics Committee of the OECD headquarters if any such body or committee does exist. Most importantly, the OECD countries should come up with a higher court where NGOs or communities can file for appeals if at all some NCPs have refused to take up their cases. This will help bring enforcement on some NCPs like the American one that has the propensity to deny cases by NGOs without any properly explained reasons. OECD countries coming up with a court will also help promote compliance of the OECD guidelines as some companies will be aware that a neutral courtyard exists somewhere other than the NCPs in their countries which sometimes do not take up cases and hence making the corporations get away with gross violations of human rights. Coming with some higher court or high body where NGOs and communities can appeal when their cases are dropped or not taken up by some NCPs will help bring and amass some confidence in the purpose of the guidelines in some NGOs and communities globally and this is much needed considering that people do not have much confidence in the guidelines as they are not obligatory.

The million dollar question here is do we need to the OECD guidelines ? There is an African proverb that says “of what use is a dog that cannot hunt anymore when it was tamed solely for that purpose” I am not saying that the OECD guidelines should find their way into the trash silo because they do not bite ! I think that we can make them bite by making the OECD guidelines become international legal binding instruments. In reality a lot of the OECD guidelines are similar to other already existing international instruments that have been ratified by the ILO, the UN and other Inter-governmental Organizations like the EU, the Arab League of Nations, the African Union and other Latin American and the Asian blocks. In clear terms, the OECD guidelines already enjoy the support of the ILO, the Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights (ICCPR), International Covenant on Economic Social and Cultural Rights (ICESCR), the African Charter on Human and Peoples Rights (ACHPR) and other UN conventions on Business and Human Rights. When I say support, I mean that a lot of the OECD guidelines are in the same line or principles with those of the organizations that are listed. With all this in support of some of the OECD guidelines and principles, it should not be a problem for the OECD countries to lobby Lobby Groupement créé dans le but de pouvoir influencer des décisions prises habituellement par les pouvoirs publics au profit d’intérêts particuliers et généralement privés. La plupart des lobbies sont mis en place à l’initiative des grandes firmes et des secteurs industriels.
(en anglais : lobby)
these organizations to support the efforts of drafting a resolution that can be discussed in the Economic and Social Council-(ECOSOC) of the United Nations. If the resolution can be accepted, then the probability is high that the OECD guidelines would turn to be called OECD conventions or treaties as such, mounting chances of their compliance by many countries and their multinational corporations.

How do we make OECD guidelines a little obligatory if we can’t pass them at the UN ? I think that the secretariat of the OECD member countries should come up with suggestions that the countries should be giving some contribution fee to the OECD watch for helping NGOs and communities in third world countries file cases. This fee should be mandatory and any company that will be known to be in violation of the OECD guidelines and the attention of such violations brought so the NCP ; the company should be forced to pay for the cost of the complaint case including the travel expenditures of the NGOs or communities involved in filing the complaint. I think that this can make some difference to the NGOs and communities that wrestle for social and corporate responsibilities in third world countries.

The OECD guidelines must be re-drafted in a way that more participation of delegates from the third world countries can incorporate their experiences in a sterner manner to enforce compliance by MNEs. This may help create neutrality in the interests of the communities in the third world countries.

Its time the OECD secretariat thought of campaigning to bring more countries into the OECD member family. More OECD member countries would mean more compliance of the OECD guidelines by the new member states and also possibly leading to a global compliance of such guidelines. Increased OECD membership would mean more awareness and promotion of the existence of the guidelines globally and a hypothetical situation that I provided earlier would be avoided and as such, communities would have their fundamental rights respected.
Most importantly the guidelines should go beyond bringing social and corporate responsibility. The guidelines should also have enforcement that multinational corporations ought to give more kindly to the communities in which they exist. Here I mean that MNEs should work on programs to promote the sustainable livelihoods of the communities surrounding their businesses other than just proving employment or building a single block of school or a small clinic. MNEs should help communities in developing or promoting farming techniques that would help them to be self sufficient and hence eradicating poverty. The MNEs should be the messengers of the western world that promote an end to acute poverty.

In summation, a lot needs to be done if the OECD guidelines will stand to be the unrivaled available useful international instruments that promote social corporate responsibility. There is need to make them obligatory, it should be a must for NCPs to accept and handle cases, OECD membership should be increased to make the guidelines become more of a universal apparatus and MNEs should be enforced to be ambassadors of the best western countries’s moral and ethical principles in the fight for an end to human rights abuse and an end to acute poverty. Last but not least, the OECD watch should be well resourced to help NGOs and communities in third world countries in the compliance of the guidelines. Long live the OECD watch family !