The OECD Guidelines form part of the OECD Declaration on International Investment and Multinational Enterprises and are based on the UN Human Rights Charter, the ILO’s core labour standards (in German) and the Rio Declaration on Environment and Development (PDF: 15 KB, in German). They set out standards for the conduct of companies engaging in cross-border trade and investment. In this way, the Guidelines want to encourage these companies to contribute to sustainable development, especially in developing countries. Every company registered or based in a participating country is asked to act in accordance with the OECD Guidelines and thereby help promote the standards set out therein. The Guidelines apply in addition to domestic law. Whilst the Guidelines are not legally binding, the Federal Government still expects companies registered or based in Germany to comply with them whenever they engage in activities abroad.

The following organisations accredited with the OECD are involved in the development and implementation of the OECD Guidelines: BIAC for industry, TUAC for employees, and OECD Watch, an NGO. Since their adoption, a number of countries which are not OECD members have signed up to the guidelines (Argentina, Brazil, Colombia, Costa Rica, Egypt, Jordan, Kazakhstan, Lithuania, Morocco, Peru, Romania, Tunisia and Ukraine).

Content and nature of the Guidelines

The OECD Guidelines for Multinational Enterprises are an important and comprehensive international instrument for the promotion of responsible corporate governance. They are designed to inform and encourage companies as to how they can promote sustainable economic development in the following fields:

  • Information policy
    Multinational companies are asked to act in a transparent way and to build trust by disclosing information not only about their bottom line and financial performance, but also about the social and environmental impact of their activities and any other foreseeable risks well in advance.
  • Human rights
    The 2011 revision included a separate chapter on human rights in the OECD Guidelines. It calls on multinational companies – irrespective of their size, sector, operational context and structure – to respect internationally recognised human rights as laid down in the Universal Declaration of Human Rights and the instruments specifying these. The new chapter is in compliance with the United Nations Guiding Principles on Business and Human Rights, which were also published in 2011.
  • Employment policy
    This chapter covers the internationally recognised core labour standards of the International Labour Organisation (ILO), including freedom of association and free collective bargaining, the abolition of all forms of forced and child labour, and the elimination of discrimination in working life. Companies and employees’ organisations should work constructively together and promote the conclusion of effective agreements on pay and conditions. Potential consequences resulting from changes in commercial activity should be discussed in advance; where possible, local workers should be employed and their skills enhanced.
  • Environmental protection
    Companies are to introduce an efficient internal environmental management system and transparent environmental reporting, to orient themselves to the precautionary principle, and to have effective contingency plans ready should damage to the environment occur. They should be constantly endeavouring to improve their environmental performance.
  • Fight against corruption
    In order to fight corruption, companies should not offer, promise, grant or demand bribes directly or indirectly, and should reject demands for bribes. Also, they should make activities to combat corruption transparent (e.g. management control systems).
  • Consumer interests
    In order to take account of consumer interests, companies are called on to apply fair business, marketing and advertising practices and to guarantee the safety and quality of their goods and services. This includes aspects like adequate product information and the protection of personal data.
  • Science and technology
    Companies are called on to apply procedures which – whilst giving appropriate consideration to the protection of intellectual property rights – permit the transfer and rapid dissemination of technologies and expertise.
  • Competition
    In order to protect competition, companies are expected to observe the rules of fair competition and not to form anti-competitive cartels. They are expected to comply with the rules on competition in the respective countries.
  • Taxation
    Finally, in the field of taxation, companies should make their contribution to the public finances of the host countries, should comply with the tax rules and regulations of the countries in which they operate, and should co-operate with the tax authorities.

Multinational enterprises should undertake risk-based due diligence and maintain appropriate internal procedures to prevent their own activities causing or contributing to adverse impacts on matters covered by the Guidelines and address such impacts when they occur. Further to their own activities, they should also seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship. In this way, their duty of care extends to include a multinational enterprise’s supply chain.