From March 27-28, trade unions representing millions of workers around the world took part in consultations with the Organisation for Economic Co-operation and Development (OECD) on responsible business practices.
The OECD Guidelines for Multinational Enterprises are the world’s leading standard on responsible business conduct. Backed by governments, the OECD Guidelines set a global baseline for how businesses should respect human rights, avoid environmental harm and govern themselves responsibly – making them a critical resource for trade unions, civil society, investors, and other stakeholders.
“The OECD Guidelines establish the corporate duty to respect human rights and labour rights throughout global value chains” said AkademikerPension’s CEO, Jens Munch Holst. “As an investor and active owner, the OECD Guidelines are the natural point of reference when addressing ESG issues in investee companies.”
Unlike other frameworks, the OECD Guidelines are unique because they establish a government-backed, international grievance mechanism that can be used to address complaints between companies and individuals. “The OECD Guidelines call on businesses, including institutional investors, to make economic, environmental and social progress” said Blake Harwell from the Trade Union Advisory Committee to the OECD (TUAC). “It relies on a network of National Contact Points (NCPs) to help remedy adverse impacts to people and violations of labour rights that have been caused either directly by a multinational enterprise, or by a company that contributes to such impacts through its business relationships.
Although the standards are compelling, they are outdated on a range of key topics. For this reason, trade union representatives from a broad range of countries and sectors have come out in record numbers to call on OECD governments to update and revise the OECD Guidelines. “This is a unique opportunity to not only ensure that the Guidelines remain relevant in the future, but also to be ambitious and set a higher standard,” said Harwell.
TUAC hosted its largest delegation ever to participate in these global discussions. More than 15 representatives from global union federations (GUFs), national trade union centers, and other organizations are calling on OECD countries to improve the Guidelines to:
- Strengthen wording on workers’ rights to form and join trade unions;
- Make all companies in the supply chain implement responsible business standards;
- Ensure a socially just transition to a greener economy with governments, companies and unions working together to create new jobs; and
- Give National Contact Points the means to deal effectively with complaints about violations of OECD responsible business standards.
According to CEO Jens Munch Holst, “the outcome of the current review of the Guidelines could have far-reaching consequences and labour unions represent an essential role in ensuring that fundamental labour rights will not be diluted in this process.” He asserts that “there is great potential for future collaboration between labour unions and investors that are serious about addressing labour issues in global portfolios.”
The updated OECD Guidelines are expected to be released in June 2023 ahead of the OECD’s annual ministerial meeting.