OECD guidelines: Little bite and commitment

The OECD guidelines for multinational enterprises are the most comprehensive social and environmental recommendations so far decided by governments for firms operating internationally. They are also of significance to Switzerland, which after all holds the world record for per capita foreign investment: Swiss firms have invested altogether 740 billion francs abroad.

«The guidelines are an important means of exerting pressure on multinational corporations», says Jacqueline Baroncini of the International Union of Food Workers (IUF). Since 2002 the Union has filed six complaints with the State Secretariat for the Economy (Seco), which operates as the Swiss contact point for compliance with the guidelines. All six complaints concerned Nestlé, and three of them regarding problems in South Korea, Indonesia and India are still pending.

It has not been possible so far to harness the inherent regulatory potential of these guidelines fully. Both the NGO network OECD Watch and John Ruggie, UN Special Representative on human rights and transnational corporations and other business enterprises, ascribe this to a series of weaknesses – which also apply to Seco.

Too weak, too pro-enterprise

The guidelines were drawn up in 1976 and last updated in 2000. Their wording is very general, vague and incomplete. They do not encompass subcontracting firms and cannot easily be applied to the financial sector. The guidelines are voluntary, legally non-binding recommendations. «Seco repeatedly points to this fact in order to justify its indulgent approach to companies», says IUF trade unionist Jacqueline Baroncini. «But like Nestle, many companies too are themselves not very cooperative».

The second weak point is that most national contact points report to government departments that are responsible for investment promotion. This gives rise to conflicts of interests – which are all the more acute when there is no independent control mechanism. The Seco contact point, for example, is not accountable to Parliament. At the suggestion of OECD Watch, the UK and the Netherlands have reinforced their contact point by creating an independent committee of experts. To date, Seco has not been very inclined to follow suit, on the pretext that the small number of cases would render such a move «disproportionate».

Third, the contact points lack the resources required to follow up complaints seriously, to study cases and undertake mediation. The procedures are often long and drawn-out, and the outcomes meagre. A case in point is the complaint filed by the Arbeitsgruppe Schweiz-Kolumbien ASK (Switzerland-Columbia working group) against Correjón/Xstrata (Glencore) for violations of the rights of indigenous peoples and farmers. «That was a year and a half ago, but very little has changed up to now», says ASK Coordinator Stephan Suhner. «Switzerland has done next to nothing; there was no on-the-spot mediation, and Seco communication and feedback in response to our proposals have been absolutely minimal».

The fourth weak point is that most decisions are not published. Seco has indeed made some progress, and did in fact publish the final communiqué on the industrial dispute at Nestlé Russia in September 2008. Yet its content was rather scant by comparison with the substantial reports provided by some other contact points. Switzerland too – unlike the United Kingdom – refuses to identify infringements of OECD rules and regulations clearly.

The guidelines are to be reviewed in 2010. It would be a good opportunity to give them more teeth and strengthen the contact points.

Michel Egger, Alliance Sud    


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Contact: Michel Egger