Markets working to support sustainable development

The OECD Declaration on International Investment and Multinational Enterprises

The Organisation for Economic Co-operation and Development (OECD) declaration is a policy commitment by member governments to: improve the investment climate; encourage Multi National Enterprises (MNEs) contributions to social and economic development; and minimise and resolve difficulties from their operations. The guidelines are supported by a network of National Contact Points (NCP's), agencies established to help governments adhere to the guidelines.

The Guidelines are recommendations addressed by governments to multinational enterprises operating in or from adhering countries. They provide voluntary principles and standards for responsible business conduct in areas, including: employment and industrial relations, human rights, environment, information disclosure, combating bribery, consumer interests, science and technology, competition and taxation.

Declaration Components

  1. Guidelines for Multinational Enterprises – recommendations for responsible business conduct
  2. National treatment – to treat foreign owned enterprises like domestic ones
  3. Conflicting requirements – cooperation to avoid or minimise conflicting requirements on MNEs
  4. International investment incentives and disincentives – recognise that other adhering countries may be affected by such policies – make them as transparent as possible.

Key Components of the Guidelines for MNE's

  • Disclosure
  • Human Rights (new for 2011)
  • Employment and industrial relations
  • Environment
  • Combating bribery
  • Consumer interests
  • Science and technology
  • Competition
  • Taxation.

The Guidelines were first adopted in 1976 and have been reviewed 5 times since then – the most recent being in 2011. Reviews are undertaken by the OECD and is conducted as a ‘constructive dialogue’ with businesses, non-governmental organisations and labour organisations. Updates included a new chapter on human rights, a new approach to due dilligence and supply-chain coverage, and important changes for the other aspects of the guidelines.

Market coverage: 

The Declaration was created in 1976 and has been agreed upon by all 34 OECD and 12 non-OECD states.

Background information: 

The OECD was formed in 1961 and is based in Paris, France. It is an organisation of leading world economies and currently has 34 member countries. It is dominated by developed countries however a number of emerging economies have been recently admitted. In addition Brazil, China, India and South Africa were offered ‘enhanced engagement’ status in 2007, so starting the process towards accession.

Funding source: 

OECD membership fees.