Revised OECD Guidelines for Multinational Enterprises reinforce workers’ rights

Governments adopted revised guidelines for multinational enterprises (MNE Guidelines) at the annual OECD Ministerial Council meeting today in Paris. The updated MNE guidelines give unions new leverage for workers’ rights in developing as well as developed countries.

TUAC, its member unions and partners managed to improve the wording on employment and industrial relations and reinforce the following:

• Employers must not interfere with workers’ right to be represented by trade unions of their choice;
• MNEs must respect fundamental rights of all workers, not only their own employees;
• The Guidelines apply to all businesses and not only multinationals. They also apply whether an enterprise is defined as an employer or as a digital intermediary;
• Fundamental rights now include occupational health and safety, and enterprises must “maintain the highest standards of safety and health at work”; and
• Best possible wages and conditions of work should be applied in business operations in host countries.

All enterprises in the supply chain can help ensure respect for workers’ rights. Implementing the guidelines can be made a condition by retailers for making purchasing orders and supplier agreements, by lenders and investors (including the IFC World Bank) for financing projects, and by government procurement agencies for awarding contracts. Similarly, institutional investors can seek guarantees from asset managers and private equity that they will ensure that companies they invest in uphold the MNE guidelines including the right to join a union and collective bargaining.

“Importantly they also give retailers, lenders and investors an opportunity to make sure that companies they do business with respect workers’ rights. There is no longer any excuse for companies to claim they are powerless to act” added Veronica Nilsson.

‘’The time has come to apply these basic standards for decent work and fair pay in every continent. It is long overdue that global trade is accompanied by global rights for workers. Unions will hold Governments and enterprises to account for implementing these reinforced guidelines on every continent.’’

For the full benefits of the 2023 MNE Guidelines to be achieved, the procedures of the OECD network of National Contact Points (NCP) for complaints also needed revisiting. Unfortunately, the OECD missed the opportunity to improve them.

“TUAC expected more from the revision to ensure that NCPs are fully staffed, funded and work with trade unions. It is disappointing that little has changed in the complaints procedure and that responsibility for dealing properly with complaints still relies on the goodwill of governments.”

The OECD Ministerial Council meeting also adopted updated Principles of Corporate Governance which include support for the MNE guidelines as part of good corporate governance.

The changes in the guidelines would not have gone so far without the work of the TUAC and its member unions.