07 January 2020
The effectiveness of the OECD Guidelines for Multinational Enterprises in ensuring proper business responsibility within global supply chains requires functioning National Contact Points (NCPs) established by signing governments.
That does not appear to be the case in Korea. Following recent consultations in Seoul (17-18 December 2019), it is the view of the TUAC and its Korean affiliates, the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU), that the Korean NCP needs radical change if it has any interest in establishing trust and confidence with trade unions. TUAC and its trade union members have long advocated for all NCPs to meet the expectations set in the Guidelines and has established 15 Priority Actions that can serve as a basis to achieve that goal.
The December stakeholder consultations in Seoul constitute a missed opportunity to help move in that direction. The meetings had been seen as a way to jump-start long absent dialogue to improve functioning of the NCP which was transferred outside of the government to the Korean Commercial Arbitration Board (KCAB) in 2016. Instead of a constructive dialogue, the December meetings were marked by last minute changes and cancellations by government officials.
Korea’s late withdrawal from the meetings heightens trade union concerns. KCTU International Affairs Director, Mikyung Ryu, who participated in the meetings, was not surprised. “KCTU has hoped OECD membership would help Korea, provide needed improvements for workers and their communities. Earlier this year we welcomed the invitation to participate in the OECD review. As we have come to expect, the government did not match workers’ commitment. It may not be possible for Korea to meet OECD standards.”
FKTU Director of Women’s Affairs and International Affairs, Yun-Jeong Hur elaborated, “Reforming the NCP in Korea has long been a priority for the FKTU. International resources at the OECD and ILO are essential for workers, particularly women workers in Korea. We believed if OECD was calling a meeting, maybe we would finally have someone hear us. It is very disappointing, even when the OECD calls a meeting, workers still do not have anyone from the government willing to listen.”
Pierre Habbard, General Secretary of the TUAC added “Korean businesses have been a driving force of globalisation in the past decades. And yet, as a member of the OECD, the Korean government is clearly failing to observe the very minimum OECD standards for NCP functioning”.
The Korean government should take bold action to ensure the operating arrangements of its NCP meet OECD standards.
Background information on the Korean NCP
In 2016 Korea transferred its NCP operations to an “independent agency” called the Korean Commercial Arbitration Board (KCAB). The KCAB promotes itself as a network of arbitrators for international dispute resolution. It consists of international lawyers from law firms with multinational corporate clients. In 2018 the KCAB reported arbitration claim amounts totalling more than $670 million. None of the reported claims involved trade unions.[i]
The KCAB list of labor arbitrators come from law firms with multinational enterprise clientele. An arbitrator who participated in two of the three OECD Guideline complaints filed by trade unions since 2015 came from a Korean firm that advises large corporate clients. In 2018, KCAB expanded operations to include offices in China, Vietnam, and the USA, making KCAB itself a multinational enterprise.
Korean NCP cases reflect KCAB’s approach to dispute resolution. An examination of trade union cases handled by the KCAB reveals ineffective dispute resolution. None of the three cases resulted in settlement. All three cases were managed according to the KCAB procedures and not according to the authoritative OECD procedures for NCP case handling.
The predominance of corporate relationships to an NCP is incompatible with the principles for promoting the OECD Guidelines for Multinational Enterprises.
[i] KCAB 2018 Annual Report