International Business Activity
Guidelines for businesses must not be misused for political purposes
International guidelines and reference texts issued by OECD, ILO and the UN provide globally organised companies with valuable guidance for responsible behaviour in their day-to-day activities. However, they should not be overloaded with political objectives or transformed into legally binding rules.
With globalisation, companies’ international business operations are becoming more important. In particular in emerging and developing countries, companies are confronted with pressing problems including poverty, deficient health care, HIV, corruption, child labour or the absence of rules for safe working or to protect the environment. In such difficult business contexts, many companies align their business activities on internationally agreed reference texts and guidelines which governments and international organisations have set out their expectations from multinational undertakings. The main ones are:
Implementation of the guidelines is voluntary. But this does not mean that implementation is arbitrary. On the contrary, many companies develop their own in-house rules in order to ensure that this guidance framework is implemented effectively around the world. Networks and initiatives – such as regional Global Compact networks, national contact points for OECD guidelines and ILO activities – also promote the dissemination and implementation of this guidance framework.
Avoid additional bureaucracy
A decisive characteristic of this guidance is that they are supposed to support companies in their efforts to meet their corporate responsibility. This practice-oriented and voluntary character of the guidance should not be undermined by making compliance a condition for the grant of export credit insurance or award of public contracts, to name two examples. This would ultimately lead to more bureaucracy without promoting the commitment of companies to society. The aim of this guidance is to encourage individual expressions of responsibility. Small and medium-sized enterprises in particular implement the fundamental values and principles of this guidance framework through their commitment to society, thereby helping to disseminate them, but without ever formally bringing the guidelines into operation. The responsibility deployed by small and medium-sized enterprises highlights the need for application of the guidelines to be promoted in a measured way. It is important to avoid the guidelines merely generating more bureaucracy without practical benefit.
Moreover, the international guidelines cannot take the place of national legislation and leave companies to fill the gaps caused by the shortcomings of the state. Fundamental environmental and social standards as well as human rights must be implemented and enforced in the first instance by governments. This task cannot be delegated to companies. Through implementation of this international guidance framework, companies can only support the efforts of states, but not replace them.
In developing and emerging countries there is great concern that the call for implementation of these guidelines could lead to a new form of protectionism by preventing companies from these countries from taking advantage of openings in global markets. These fears should be taken seriously. The aim must be to help companies in developing and emerging countries to implement these reference texts and guidelines through information and training, instead of overwhelming them with formal requirements.
- OECD guidelines for multinational enterprises,
- Tripartite ILO declaration on multinational enterprises and social policy, and
- UN Global Compact.
Implementation of the guidelines is voluntary. But this does not mean that implementation is arbitrary. On the contrary, many companies develop their own in-house rules in order to ensure that this guidance framework is implemented effectively around the world. Networks and initiatives – such as regional Global Compact networks, national contact points for OECD guidelines and ILO activities – also promote the dissemination and implementation of this guidance framework.
Avoid additional bureaucracy
A decisive characteristic of this guidance is that they are supposed to support companies in their efforts to meet their corporate responsibility. This practice-oriented and voluntary character of the guidance should not be undermined by making compliance a condition for the grant of export credit insurance or award of public contracts, to name two examples. This would ultimately lead to more bureaucracy without promoting the commitment of companies to society. The aim of this guidance is to encourage individual expressions of responsibility. Small and medium-sized enterprises in particular implement the fundamental values and principles of this guidance framework through their commitment to society, thereby helping to disseminate them, but without ever formally bringing the guidelines into operation. The responsibility deployed by small and medium-sized enterprises highlights the need for application of the guidelines to be promoted in a measured way. It is important to avoid the guidelines merely generating more bureaucracy without practical benefit.
Moreover, the international guidelines cannot take the place of national legislation and leave companies to fill the gaps caused by the shortcomings of the state. Fundamental environmental and social standards as well as human rights must be implemented and enforced in the first instance by governments. This task cannot be delegated to companies. Through implementation of this international guidance framework, companies can only support the efforts of states, but not replace them.
In developing and emerging countries there is great concern that the call for implementation of these guidelines could lead to a new form of protectionism by preventing companies from these countries from taking advantage of openings in global markets. These fears should be taken seriously. The aim must be to help companies in developing and emerging countries to implement these reference texts and guidelines through information and training, instead of overwhelming them with formal requirements.
