Magazine article The Brown Journal of World Affairs

Human Rights and the OECD Guidelines for Multinational Enterprises: Normative Innovations and Implementation Challenges

Magazine article The Brown Journal of World Affairs

Human Rights and the OECD Guidelines for Multinational Enterprises: Normative Innovations and Implementation Challenges

Article excerpt


In the 1990s-as global markets widened and deepened significantly due to trade liberalization, privatization, deregulation, offshore production, and growing influential financial centers-the impact of business became increasingly prominent on the international agenda. During this time, the rights of multinational enterprises (MNEs) to operate globally became legally enshrined in a vast expansion of investment treaties and free trade agreements, as well as in a new international regime protecting intellectual property. According to one UN study, some 94 percent of all foreign investment-related national regulations that were modified from 1991 to 2001 were intended to facilitate this global expansion.1 As a result, MNEs thrived, and so did people and countries that were able to take advantage of the opportunities created by this transformative process.

But others were less fortunate. Global social and environmental protections lagged behind; domestic safety nets, where they existed at all, began to fray; and income inequality increased. International attempts to regulate the conduct of multinational corporations, which date back to the 1970s, continued to fail while human rights abuses continued to be documented, including forced, bonded, and child labor; land grabs that displaced communities; and even instances of private security contractors raping and sometimes killing those protesting company operations or mere bystanders. Better understanding the means by which global and local communities can avoid such harm and seek redress when it does occur are urgent policy and moral challenges.

This paper takes one small step in that direction. It analyzes the first-and one of the few-international mechanisms that governments have established to enable individuals, communities, and their representatives to bring complaints against multinational corporations: the Guidelines for Multinational Enterprises ("Guidelines") promulgated by the Organization for Economic Co-operation and Development (OECD). First, we identify patterns of use over time to better understand the Guidelines. Second, we determine whether any difference exists in these patterns since the endorsement by the United Nations Human Rights Council in 2011 of the Guiding Principles on Human Rights (UNGPs), core elements of which were incorporated into the 2011 OECD Guidelines revision. Finally, we offer some concluding recommendations on how this mechanism can be strengthened.



In 1976, on the eve of UN negotiations on a Code of Conduct on Transnational Corporations, which would be abandoned some 15 years later, the OECD adopted a Ministerial Declaration on International Investment and Multinational Enterprises. It was the first multilateral instrument to include the principle of national treatment in the investment context, whereby states' treatment of foreign-controlled enterprises would be "consistent with international law and no less favorable than that accorded in like situations to domestic enterprises."2 Perhaps in an attempt to also recognize these MNCs' responsibilities, the Declaration annexed a set of "recommendations" that the OECD member states addressed to global companies-the original OECD Guidelines for Multinational Enterprises. While OECD member states were obligated to promote these Guidelines, they were nonbinding on multinationals. Companies were merely advised to comply with national laws and encouraged to make a positive contribution to economic and social progress in their countries of operation (known as host countries), contribute to technology transfer, and not harm the environment. Apart from freedom of association and the right to bargain collectively, which are recognized in International Labor Organization (ILO) conventions, the Guidelines referenced no other international human rights standards at the time.3 To operationalize these procedures, in 1984 OECD members also agreed to formally establish National Contact Points (NCPs) within each national government. …

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