Guidelines for multinational enterprises 

 Guidelines for multinational enterprises 

The OECD Guidelines for Multinational Enterprises provide voluntary principles and standards for responsible business behaviour in a variety of areas, consistent with applicable domestic laws. They are addressed and approved by governments to multinational enterprises operating in or from the 30 OECD member countries and non-member adhering countries (Argentina, Brazil, Chile, Estonia, Israel, Lithuania, Latvia and Slovenia). The Guidelines aim to ensure that the operations of these business enterprises are in harmony with Government policies, to strengthen the basis of mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development made by multinational enterprises.

The Guidelines are a set of recommendations for responsible business conduct in a number of areas including employment, industrial relations, human rights, environment, information disclosure, competition, taxation, and science and technology. They are complemented by implementation procedures whereby adhering Governments agree to promote observance of the Guidelines.

OECD Governments and others which have signed up to the Guidelines agree to establish a National Contact Point whose role is to promote the Guidelines, handle enquiries and assist in the resolution of issues which may be raised by parties concerning the implementation of the Guidelines in specific instances. The Australian National Contact Point is the General Manager of Treasury’s Foreign Investment Policy Division.

Although many business codes of conduct are now publicly available, the Guidelines are the only multilaterally endorsed and comprehensive code that Governments are committed to promoting. The Guidelines have several distinguishing features that help them gain acceptance and continue to ensure they are supported. First observance of the Guidelines is voluntary. Their non-binding nature, however, does not imply less commitment by adhering Governments to encouraging their observance. Second, the Guidelines approach is balanced. The assumption is not that enterprises need to be 'controlled' but that internationally agreed guidelines can help prevent misunderstandings and build an atmosphere of mutual confidence and predictability between business, labour and Governments. Although they are addressed to Governments the Guidelines need the support of the business community, labour representatives and non governmental organisations in order to be effective. Finally, the Guidelines are part of a package. They come under the OECD Declaration on International Investment and Multilateral Enterprises a broad political commitment adopted by the OECD Governments in 1976 to facilitate direct investment among OECD members.

Importantly, while the Guidelines have been endorsed within the OECD international forum, they are not a substitute for, nor do they override, Australian law. They represent standards of behaviour supplemental to Australian law and, as such, do not create conflicting requirements. They are voluntary standards and ultimately, the success and effectiveness of the Guidelines depends on the responsibility and good faith of all parties involved with their promotion and implementation.

For more information, visit the Australian National Contact Point for the OECD Guidelines for Multinational Enterprises.