Forty-two countries will commit to new, tougher standards of corporate behaviour in the updated Guidelines for Multinational Enterprises: the 34 OECD countries plus Argentina, Brazil, Egypt, Latvia, Lithuania, Morocco, Peru and Romania. The updated Guidelines include new recommendations on human rights abuse and company responsibility for their supply chains, making them the first inter-governmental agreement in this area.
The Guidelines establish that firms should respect human rights in every country in which they operate. Companies should also respect environmental and labour standards, for example, and have appropriate due diligence processes in place to ensure this happens. These include issues such as paying decent wages, combating bribe solicitation and extortion, and the promotion of sustainable consumption.
The Guidelines are a comprehensive, non-binding code of conduct that OECD member countries and others have agreed to promote among the business sector. A new, tougher process for complaints and mediation has also been put in place. (OECD, New OECD guidelines to protect human rights and social development, May 25, 2011).
Many multinational enterprises have demonstrated that respect for high standards of business conduct that can enhance growth. Today's competitive forces are intense and multinational enterprises face a variety of legal, social and regulatory settings. In this context, some enterprises may be tempted to neglect appropriate principles and standards of conduct in an attempt to gain undue competitive advantage. Such practices by the few may call into question the reputation of the many and may give rise to public concerns. (Guidelines for Multinational Enterprises, Preface, Para. 6).