Tuesday, February 26, 2013

Part 23: The U.S. National Contact Point: Corporate Social Responsibility Between Nationalism, Internationalism and Private Markets Based Globalization

 (Pix Source HERE)

This Blog Essay site devotes every February to a series of integrated but short essays on a single theme. For 2013 this site introduces a new theme: The U.S. National Contact Point: Corporate Social Responsibility Between Nationalism, Internationalism and Private Markets Based Globalization.

Part 23:  Charting the Reality of the Specific Instance Function--All Countries

This series builds on some ideas I have been working through for a number of years relating to a fundamental shift in the approaches to corporate governance that broaden the ambit of corporate governance issues from a singular focus on internal governance (the relationships among officers, shareholders and directors) to one that includes corporate behavior and the standards by which officers, directors and shareholders exercise their respective governance authority. This shift also changes the scope of what is understood as "law" to be applied to issues of corporate governance, from one principally focused on national law to governance norms that may be sourced in the declarations and other governance interventions of public and private international bodies. Lastly, it appears to point to an evolution to the role of the state from the principal source of standards and enforcer of law to a vehicle for the implementation of international standards  in which enforcement power is left to global market actors--principally consumers and investors function of the decisions of global actors.  All of this is inconsistent with traditional notions of the role of law, the scope of corporate governance and the nature of corporate social responsibility int he United States.  The extent to which the United States participates in the construction of these autonomous international systems may suggest the direction in which government policy may be moving away from the traditional consensus of corporate responsibility to something perhaps entirely new.

The examination of the US NCP has suggested a pattern of behavior that has been consistent across Republican and Democratic Administrations despite the well publicized re-imagining of the US NCP in 2011. (Parts 10-16). But is the conduct of the U.S. NCP and the policy premises this conduct applies unusual in this respect, or does the U.S. NCP reflect a common OECD NCP culture? This question was considered by examining the reports of the annual meetings of the NCs between 2001 and 2012 (Posts 17-22).  That examination suggested  that the United States position reflected a conventional and conservative position, but one shared by a number of other state NCPs.  The United States remains among the leaders of the NCP clique that views the MNE Guidelines project as inter-governmental in essence, that views with suspicion the development of MNE Guidelines principles through any judicialized framework or that might suggest a remedial or fact finding function for the NCP.  Lastly, the United States vigorously represents a view, not shared by other leading NCP states, that bifurcates enterprise governance rules between a domestic legal regime dominated by the laws of the home states where an enterprise is organized, and an internationalized soft law hortatory regimes, grounded in the MNE Guidelines, as a vehicle for foreign relations and the extraterritorial harmonization of practice.

This post and the one that follows provides simple charts to suggest the consequences of these developments for the specific instance function of NCPs.   

(Pix (c) Larry Catá Backer 2013)

Part 23: Charting the Reality of the Specific Instance Function--All Countries

I was curious whether it would be helpful in considering the work of the US NCP to examine some of the information about the specific instance facility in graphical form. To that end I had two sets of charts prepared. The source of information for this chart was OECD, OECD Guidelines for Multinational Enterprises--Specific Instances Considered by National Contact Points 27 Nov. 2011.  The authors of that study explained:

This document provides an archive of specific instances that have been or are being considered by NCPs as of June 2011. This archive seeks to improve the quality of information disclosed by NCPs while protecting NCPs’ flexibility – called for in the June 2000 Council Decision – in determining how they implement the Guidelines. Discrepancies between the number of specific instances described in this table and the number listed in Section IV could arise for at least two reasons. First, there may be double counting – that is, the same specific instance may be handled by more than one NCP. In such situations, the NCP with main responsibility for handling the specific instance would generally note its co-operation with other NCPs in the column “NCP concerned.” Second, the NCP might consider that it is not in the interests of effective implementation of the Guidelines to publish information about the specific instance (note that recommendation 4.b. states that “The NCP will... make publicly available the results of these procedures unless preserving confidentiality would be in the best interests of effective implementation of the Guidelines”). The texts in this table are submitted by the NCPs. Company, NGO and trade union names are mentioned when the NCP has mentioned these names in its public statements or in its submissions to the Secretariat.

The first chart prepared aggregates the data for all NCP reporting states between 2000 and 2011.  For each year it compares the following:

--Total claims made
--Total final statements publicly available
--Total final statements written
--Total cases not concluded
--Total press releases issued
--Total claims not originated in NCP host country

There are a number of observations worth making at a preliminary stage.

First, the number of claims made  have been relatively steady before the 2011 decisions to the MNE Guidelines and the procedures for undertaking specific instance claims.   However, it does not appear that there was a rush to take advantage of the MNE Guidelines revisions after 2011.  It is probably too early to tell, however.

Second, the number of claims made, spread over a large number of NCPs remains quite modest.   Claims never exceeded 27 in any year reported.

Third, transparency remains an issue, and a large one. The number of claims made that produced written final statements, or even press releases appear to be a small fraction of the specific instances filed. And the reluctance of NCPs to make written final statements publicly available is clear.

Fourth, the percentage of specific instance claims claims originating in an NCP host state as a percentage of all claims filed appears to be steady. Thsi suggests the continuation fo the tension between the extraterritorial and internationalist focus of adhering states and the more globalized sensibilities of claimants who tend to distinguish less precisely between the home and host state activities of multinational enterprises).

Fifth, the specific instance facility has not become a significant part of the project of developing the MNE Guidelines.  It remains an inter-governmental and administrative oriented enterprise. That suggests both the preferences of states--to manage the development of governance standards in ways that solidifies their privileged role in the process--and the concern that the development of a "common or customary" law of enterprise behavior, including behaviors respecting the valuation of enterprise activity, based on normative structures beyond those of the domestic law and policies of OECD core states could put inbound pressure for legal reform within OECD states.

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