5 August 2019

The OECD Guidelines For Multinational Companies And The Specific Instance

For over 20 years the Argentine Republic has adhered to the "OECD Guidelines for Multinational Companies", through the "Declaration on International Investments and Multinational Companies" of the OECD.
Argentina Corporate/Commercial Law
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For over 20 years the Argentine Republic has adhered to the "OECD Guidelines for Multinational Companies" ("Guidelines"), through the "Declaration on International Investments and Multinational Companies" of the Organization for Economic Cooperation and Development ("OECD").

The OECD adopted two tools for the realization of its aims: the Guidelines and the Specific Instance Procedure for dispute resolution ("Specific Instance").

The Guidelines:

The guidelines are indications of "Soft law". They have no legal force. These are recommendations that the OECD advises a company to incorporate into its internal "regulations". Multinational companies are urged to contribute to economic, social and environmental progress, to cooperate with public authorities and to respect Human Rights.

These principles are developed in "Specific Recommendations" that deal with the following topics:

  • Advertising of Company Information, according to the principles of transparency and responsibility;
  • Recognition and respect for Human Rights;
  • Respect for Workers' Rights;
  • Environmental Protection contributing to sustainable development;
  • Fight against corruption, bribery requests and other forms of extortion;
  • Ensure the interests of consumers through reliable and quality goods and services and following fair marketing practices;
  • Promotion of Science and Technology and local innovative capacity;
  • Refrain from carrying out activities that may have anticompetitive effects;
  • Contribution to the public finances of the countries where they register their activities punctually fulfilling their tax obligations.

The Specific Instance:

The guidelines provide that states adhering to the Guidelines should implement and promote their use and establish "National Point of Contact" ("NPC"). They also establish a "Specific Instance" for a case or complaint about the breach of the Guidelines by a company. It is the instrument that stakeholders use to address practices that have affected them, and seek solutions by submitting a complaint to the OECD Guidelines.

The Specific Instance focuses on resolving disputes, mainly through mediation and conciliation, and can be used by anyone who can demonstrate an "interest" in the alleged violation. NGOs and unions around the world have used the complaint process to address the adverse social and environmental impacts caused by corporate misconduct.

The procedure of Specific Instance in 3 phases:

  • Issue of a complaint to a NPC. The NPC conducts a first evaluation to determine if the case deserves a more detailed examination.
  • Mediation or good offices: only if the case deserves further examination. The NPC will attempt to bring together the complainants and the company to resolve the case through mediation and conciliation. This phase is confidential.
  • Final declaration or conclusion: The NPC issues a final declaration on the complaint and mediation process. You must describe the alleged violations and how you dealt with the case. It may also include recommendations on the implementation of the guidelines.

The OECD Investment Committee has the responsibility of overseeing the Guidelines. However, in the case of non-compliance with the guidelines, no penalty can be imposed to the OECD or to the adherent country. The Investment Committee may be asked to issue an amendment to the text or a clarification of a particular clause. This clarification can be requested by the member states, the TUAC, the BIAC and, since 2011, also by OECD Watch.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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