Part 3: Substantive Provisions of the MNE Guidelines:
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.
This post focuses on the "regulatory ideal" underlying the Guidelines for Multinational Enterprises (2011) (MNE Guidelines) of the Organization for Economic Cooperation and Development, focusing on its substantive provisions. Subsequent posts will consider its incorporation of more targeted human rights related provisions, and particularly the UN Guiding Principles on Business and Human Rights, and on the MNE Guidelines' remedial architecture. That background will provide the foundation for a review of the way in which the U.S. National Contact Point has functioned within this system.
Substantive Provisions of the MNE Guidelines:
In the last post I suggested the curious hybridity of the MNE Guidelines operate. They are not law in the conventional sense, but represent a consensus of appropriate behavior norms for profit making enterprises. They are overseen by the OECD member states through an agency designated for the purpose. But that agency applies the consensus norms represented by the MNE Guidelines, even where these may not be accepted within the domestic legal order of that state. The application facilitates private efforts by stakeholders who are free to bring complaints against companies that are mediated, using MNE Guidelines standards, for that purpose. The result is a hybrid arrangement between domestic, international and private actors. "The Guidelines are the only multilaterally agreed and comprehensive code of responsible business conduct that governments have committed to promoting." (MNE Guidelines 2011, Forward). This section considers the substantive provisions at the heart fo the MNE Guidelines.
The Forward emphasizes the connection between the MNE Guidelines provisions and the consensus element of customary international law. "The Guidelines’ recommendations express the shared values of the governments of countries from which a large share of international direct investment originates and which are home to many of the largest multinational enterprises. The Guidelines aim to promote positive contributions by enterprises to economic, environmental and social progress worldwide." (MNE Guidelines 2011, Forward).
The most recent updates to the OECD Guidelines were adopted by 42 adhering government on May 25, 2011, at the OECD’s 50th Anniversary Ministerial Meeting. (MNE Guidelines 2011, forward). The update was preceded by a substantial amount of formal and informal consultation, with an emphasis on international organizations and actors with substantial stakes in furthering the human rights components of the Guidelines, including John Ruggie, the UN Special Representative on Business and Human Rights. "All non-adhering G20 countries were invited to participate on an equal footing; they made important contributions, as did participants in the regional consultations in Asia, Africa, Latin America and the Middle East and North Africa." (Ibid.). The scope of the consultations were reflected in the substance of the modifications to the Guidelines.
A new human rights chapter, which is consistent with the Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework; A new and comprehensive approach to due diligence and responsible supply chain management representing significant progress relative to earlier approaches; Important changes in many specialised chapters, such as on Employment and Industrial Relations; Combating Bribery, Bribe Solicitation and Extortion, Environment, Consumer Interests, Disclosure and Taxation; [and] Clearer and reinforced procedural guidance to strengthen the role of the NCPs, improve their performance and foster functional equivalence. (Ibid).The object of the changes was to ensure that the MNE Guidelines continued to reflect evolving international consensus on appropriate business conduct, and that the Guidelines continued to serve as "a leading international instrument for the promotion of responsible business conduct. Other changes were in the chapters relating to Employment and Industrial Relations. This following sections act as a walkthrough of the MNE Guidelines." (Ibid.).
The Preface starts by stressing the legal character of the MNE Guidelines. The MNE guidelines are recommendations by adhering states to transnational corporations. The MNE Guidelines “ aim to ensure that the operations of these enterprises are in harmony with government policies, to strengthen the basis of mutual confidence between enterprises and the society in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable developments made by multinational enterprise.” (MNE Guidelines, Preface). The Preface also emphasizes the hybridity of the structure of the MNE Guidelines: They provide a voluntary framework for responsible business behavior that seeks to harmonizes domestic laws and international conventions and norms, a voluntary standard that adhering states bind themselves to implement, which remain distinct from both national law and the international commitments of adhering states (both of which, unlike the MNE Guidelines themselves) are legally binding in a conventional sense. (Ibid.)
The 2011 updated version is an outgrowth to the changing nature of globalization. The shift to a knowledge based economic model, pushed through technical enterprises and servicing are playing a larger role in the international market system. Large transnational private actors are a major share of international investment, multinational enterprise have morphed in a growth of networks and strategic alliances. "At the same time, foreign investment by small- and medium-sized enterprises has also increased and these enterprises now play a significant role on the international scene." (Ibid). The MNE Guidelines also suggest that “Many multinational enterprises have demonstrated that respect for higher business conduct can enhance growth.” (Ibid.). Since many multinational corporate face a complex legal and social environment, they are more tempted to neglect appropriate standards to gain competitive advantage.
This produces public concern. On the one hand, companies have responded to this concern by developing private systems of corporate good governance and best practices in their activities. These efforts are legitimated by efforts that emphasize the importance of a stakeholder based action program (rather than a purely shareholder driven set of practices). This has also been represented in the trend of corporation’s institution a corporate citizenship office, or management systems that maintains good corporate conducts. They have sought out consultants, certification bodies, auditors, experts, and so on, to help internalize CSR practices. "Enterprises have also promoted social dialogue on what constitutes responsible business conduct and have worked with stakeholders, including in the context of multi-stakeholder initiatives, to develop guidance for responsible business conduct." (Ibid). These efforts are legitimated by efforts that emphasize the importance of a stakeholder based action program (rather than a purely shareholder driven set of practices). But it may be precisely because the responses deviate significantly from the premises of national corporate law models that the Guidelines represent both an international consensus-based response, and one that cannot be understood as having the character of law. "The Guidelines clarify the shared expectations for business conduct of the governments adhering to them and provide a point of reference for enterprises and for other stakeholders. Thus, the Guidelines both complement and reinforce private efforts to define and implement responsible business conduct." (Ibid.). Complementarity and polyentricity, then, mark the framework of the Guidelines and shape the obligations of adhering states in implementing them.
That division between national and international efforts, signaled by the distinction between the stakeholder orientation of the MNE Guidelines and the shareholder orientation of national law, is further expanded by the differences in the focus of the international effort--grounded in human rights standards.
The start of this process can be dated to the work of the International Labour Organisation in the early twentieth century. The adoption by the United Nations in 1948 of the Universal Declaration of Human Rights was another landmark event. It was followed by the ongoing development of standards relevant for many areas of responsible business conduct – a process that continues to this day. (Ibid).
Concepts and Principles
Generally speaking, the OECD Guideline is voluntary standards that are consistent with laws and international instruments to encourage responsibility business practices. Though not legally binding, many aspects of the OECD Guidelines can be regulated by governments that abide by the OECD. As the concepts and Principles states, the abidance of domestics laws are required obligation of transnational actors, where the OECD Guidelines should not act as a substitute for domestic regulation. “However, in countries where domestic laws and regulations conflict with the principles and standards of the Guidelines, enterprises should seek ways to honor such principles and standards to the fullest extent which does not place them in violation of domestic law.” (Concepts and Principles para 2).
The definition of multinational enterprises is not of concern for the OECD Guidelines. Multinational actors could represent public, private, or hybrid institutions. The distinction lies however in that the OECD Guidelines do apply to all organizational structures within a multinational enterprise. And though smaller and medium sized enterprises do not have the same economic advantages and resources as conglomerates, they also have the responsibility to adhere as best as possibly to the OECD Guidelines.
The OECD Guidelines also allow states to have the right to subject enterprise to international law within its borders: “When multinational enterprises are subject to conflicting requirements by adhering countries or third countries, the governments concerned are encouraged to co-operate in good faith with a view to resolving problems that may arise.” (Concepts and Principles Para 8). They also note that the OECD Guidelines should not be used as a form of protectionism, or as a means to increase a states comparative advantage in the international market system. This also provides governments with relative autonomy “to prescribe the condition under which multinational enterprise operates within their jurisdictions, subject to international law.” (Ibid). There is also an encouragement of legal resolutions through international mechanisms, which includes arbitration. The National Contact Points (NCPs) are also another form of enforcing the OECD Guidelines, and their utilization is strongly encouraged.
The General Policies details general policy frameworks to abide by. Some of the most important are the contribution to the economic, environmental and social progress of a society; to respect global human rights; encourage capacity building through cooperation efforts with all relevant stakeholders; to encourage human capital building; to uphold corporate socially responsibility practices; to promote awareness of their responsibly policies; to refrained from discrimination against labor; to carry out risk-based due diligence (more later); to avoid contributing to adverse impacts; and to abstain from involvement in local politics.
These seem exhaustive but the OECD Guidelines further discuss each section, harmonizing international instruments and international laws into their own governance frameworks. This is an attempt to aggregate many international recognized policies and corporate social responsibly initiative’s into one proactive element. Transnational corporations are encored to initiative cooperation efforts, to support social progress, and promote multi- stakeholder dialoged especially concerning supply chain management and their commitment to the good business practices There is also a social investment prescience, to invest in human capital formation for the development of training employs, and to encourage local capacity building within local communities..Non discrimination in hiring.
Governance is another substantial area. For instance, #7 (p.22) states that “The Principles call for the protection and facilitation of the exercise of shareholder rights, including the equitable treatment of shareholders. Enterprise should recognize the rights of stakeholders established by law or through mutual agreements and encourage active co-operation with stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises.” This suggests a proactive engagement of a transnational actor, to become a social institution within the community it operates in. This section also points out that there is “an increasing network of non-governmental self-regulatory instruments” for corporate behavior and the interactions between private enterprise and society. They suggest that by the development and the harnessing of internal self-regulatory practices systems to the enterprise organizational structure will further the relationship between private firms and the general society they operate in. In addition to this, there is an expectation to promote the diffusion of knowledge to the labor force of these new policies.
There is also the treatment of due diligence. Within the context of the OECD Guidelines, due diligence is defined as “The Principles call for the protection and facilitation of the exercise of shareholder rights, including the equitable treatment of Shareholders. Enterprise should recognize the rights of stakeholders established by law or through mutual agreements and encourage active co-operation with stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises.” This suggests that the management systems should effectively monitor all stakeholders: subsidiaries, supply chains, State entities, products, and services. When the OECD describes “business relationships,” they mean all business partners, as mentioned above, regardless if it is only through contractual arrangements. This relationship could be through franchising, licensing, or subcontracting relationship. If corporations see that a relationship is causing adverse human rights impacts, it should do what it can to prevent the adverse impact. Even though the OECD concedes that “there are practical limitations on the ability of enterprises to effect change in the behavior of their suppliers,” they do suggest influences suppliers through contractual arrangements, where policy could be discussed at the point of business transactions. This could be furthered by cooperation with all stakeholders, which includes training programs, capacity building, and creating a framework to integrate the principles compiled within the OECD Guidelines into their governance structure and contract agreements with the supply chain.
The Commentary emphasizes the connection between the MNE Guidelines and the OECD Guidelines on State Owned Enterprises. (MNE Guidelines, Commentary on General Principles Para. 10). SOEs are subjected to that same recommendations as their private counterparts, “but public scrutiny is often magnified when a State is the final owner.” This portion points to the regulatory implications of the media, NGOs, and human rights organizations, and the impacts of human rights violations. This section ends with a message: “self-regulation…should not unlawfully restrict competition.” This is in tradition to the OECD’s pro-market and pro-neoliberal agenda, of creating an international capitalist systems.
An increasing network of non-governmental self-regulatory instruments and actions address aspects of corporate behaviour and the relationships between business and society. Interesting developments in this regard are being undertaken in the financial sector. Enterprises recognise that their activities often have social and environmental implications. The institution of self-regulatory practices and management systems by enterprises sensitive to reaching these goals – thereby contributing to sustainable development – is an illustration of this. (MNE Guidelines, Commentary on General Principles Para. 12).
Disclosure and transparency is what this section is grounded on. There should be a timely discolor of accurate information that discuses their activities, instruction, governance, performance, and so on. The main topics that should be disclosed are:
a) The financial and operating results of the enterprise;
b) Enterprise objectives;
c) Major share ownership and voting rights, including the structure of a Group of enterprises and intra-group relations, as well as control Enhancing mechanisms;
d) Remuneration policy for members of the board and key executives, And information about board members, including qualifications, the Selection process, other enterprise directorships and whether each Board member is regarded as independent by the board;
e) Related party transactions;
f) Foreseeable risk factors;
g) Issues regarding workers and other stakeholders;
h) Governance structures and policies, in particular, the content of any corporate governance code or policy and its implementation process (OECD, 2011, p.27).
This section is based on dissemination of policy to all relevant stakeholders. Diffusing this information is supposed to communicate value statements of business conduct intended for public consumptions, discussing its codes of conducts, its performances in keeping up with these codes, information on its international operations and risk management systems, and information on its relationship with its workforce and all relevant stakeholders.
The fundamental goal is to provide a public understanding of private enterprises, and its relationship with the social and natural environment that it interacts with. The disclosure recommendations are identities to the OECD Principles of Corporate Governance. Public disclosure reports that are created to enhance transparency should be of high quality, and account for both financial and non-financial reporting, improving the ability of investors to monitor the enterprise. Independent audits are also recommended in this process.
There are two very important areas of concern: first, there should be timely and accurate disclosure of policy, accounting, and human rights record; and second, there should be a social, environmental and risk reports. Even though the OECD details generally what should be done, all these areas for reporting are still evolving and there is not concrete framework on how one should proceed . These disclose should be easy and accessible to all stakeholder , even to home markets.
This section deals with Human Rights. This is an updated section that includes the dominate discourse amongst international organizations that have discussed global human rights concerns. This section states that “States have the duty to protect human rights.” Though states have the primary responsibility to protect human rights, private enterprise should also recognize human rights standards, internationally recognized obligations, and domestic laws, and do their best to incorporate socially responsibly practices. They should respect human rights and to avoid infringing on human rights as well as address human rights impacts. They should not cause or contribute to adverse human rights impact, seek ways to prevent adverse human rights impacts that is linked to their operations. They should also create a policy commitment to respect human rights, carry out human rights due diligence, and provide cooperate through legitimate process in the remediation of adverse human rights.
What’s most substantial in the Commentary on Human Rights, is that much of it draws on the United Nations Framework for Business and Human Rights “Protect, Respect and Remedy” and is in line with the Guiding Principles. As mentioned previously [insert link], the UN “Protect, Respect, & Remedy” framework (UN Framework), rests on three pillars, the states duty to protect human rights, the corporate responsibility to respect human rights, and to provide access to remedy . The first pillar rests on the states duty to protect against human rights by private enterprises or any third party. The second pillar is the corporate responsibility to respect human rights. The SRSG uses “responsibility” for corporations rather than “duty “for a specific reason (The UN "Protect, Respect and Remedy" Framework for Business and Human Rights. United Nations), because international law does not hold corporations to enforce rights. Corporations are considered “specialized economic organs, not democratic public interest institutions. As such, their responsibilities cannot and should not simply mirror states’ duties…”" (Six Questions for John Ruggie: Where Is the Business and Human Rights Agenda Going?" ENews Builder | Email Marketing and HTML Email Newsletters, Create, Send and Track. Apr. 2008. Web. 21 Jan. 2012). The third principle highlights the access to remedy in alleviating human rights impact due to corporate activities. This pillar highlights the access for remedies for the state and corporations – for states, victims need greeted access to judicial and non judicial remedies and corporations also have a responsibility to provide means of remedy.
In countries where domestic laws are diminished comparatively, this does not relieve the expectation to respect human rights. The OECD Guidelines makes a reference that transnational actors should, at the minimum, coincide with the International Bill of Human Rights (Universal Declaration of Human Rights; International Covenant of Economic, Social, and Cultural Rights; International Labor Organization Declaration on Fundamental Principles and Rights at Work). And under some circumstances, private actors should consider additional standards.
The UN Framework also recommends avoiding causing adverb human rights impacts through both actions and omissions. Another important component is human rights due diligence. “The process entails assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses as well as communicating how impacts are addressed. Human rights due diligence can be included within broader enterprise risk management systems provided that it goes beyond simply identifying and managing material risks to the enterprise itself to include the risks to rights-holders.” This entails a system which enables and supports remediation. This could be judicial that is state based or non-state based. This should operation as a grievance mechanism for those who have be impacted by enterprise actives.
Employment and Industrial Relations
Enterprise should prevail labor relations that meet international standards. These entail respect the right of workers to join trade unions, to have representatives of their choosing, contribute to the abolition of child labor, contribute to the elimination of compulsory labor, embody principles of equal opportunity and non discrimination regardless of race, sex, region, political orientation, social origin, statures, etc., provide workers’ representatives for negotiations, and promote cooperation between the firm and the workers.
There is also the suggestion the promotion of consultations and cooperation with managers and labor. There is also an element of non-binding unilateralism, where to “Observe standards of employment and industrial relations not less favorable than those observed by comparable employers in the host country.” In addition, if there is a substantial change that affects employment, there should be ample notice of such changes.
The commentary on employment and industrial relations, and the OECD Guilds has played a role to promote the observance of internationally recognized standards (The International Labor Organization standards). Consistent with ILO and other international labor standards.
“The International Labour Organisation (ILO) is the competent body to set and deal with international labour standards, and to promote fundamental rights at work as recognised in its 1998 Declaration on Fundamental Principles and Rights at Work. The Guidelines, as a nonbinding instrument, have a role to play in promoting observance of these standards and principles among multinational enterprises. The provisions of the Guidelines chapter echo relevant provisions of the 1998 Declaration, as well as the 1977 ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, last revised in 2006 (the ILO MNE Declaration). The ILO MNE Declaration sets out principles in the fields of employment, training, working conditions, and industrial relations, while the OECD Guidelines cover all major aspects of corporate behaviour. The OECD Guidelines and the ILO MNE Declaration refer to the behaviour expected from enterprises and are intended to parallel and not conflict with each other. The ILO MNE Declaration can therefore be of use in understanding the Guidelines to the extent that it is of a greater degree of elaboration. However, the responsibilities for the follow-up procedures under the ILO MNE Declaration and the Guidelines are institutionally separate” (OECD,2011,p.37).
Private firms should protect the environment, public health, and safety. There should be an establishment of a system of environmental manage that that can collected information regarding environmental and health impacts of their operations, a set of goals to achieve to enhance environmental perforce, constant monitoring of progress.
This can also occur with non-financial reports that allow public stakeholders and private employs information on the environmental impacts of the actives of the enterprise. There is also the suggestion to consensually improvise corporate environmental records, through the enterprise as well as through its supply chains. This can be done by adopting new technologies that reflect environmental standards, more reasonably policies that may reduce greenhouse gas emissions, that are more efficient in energy consumption, and that integrate recycling in their practices.
The Commentary on the Environment reflects the same aims as the Rio Declaration on Environment and Development, grounded in Agenda 21. Managers have a responsibility to put further appropriate attention to environmental issues within busiest rectifies. The commentary suggests that a firm should create a management system to improve the firm’s environmental initiatives. “Improving environmental performance requires a commitment to a systematic approach and to continual improvement of the system. An environmental management system provides the internal framework necessary to control an enterprise’s environmental impacts and to integrate environmental considerations into business operations” (OECD, 2011, p.44). Business should carry out ex ante assessments of environmental impacts that are associated with business actives.
Though these measures are not intended to reinterpret existing instruments, they do, however, aim to recommend an approach grounded in flexibility to the organization. This is also grounded in whats called the “demonstration effect,” where a dominate enterprise can create intra-industry regulations outside any particular regulatory apparatus encompassed within any one state on other enterprises. Since many multinational enterprises are regarded as leaders in their industry, they can effectuate intra-institutional change throughout their market, and thus, conform supply chains to be consistent to industry norms.
Combating Bribery, Bride Solicitation and Extortion
Private firms should not socialite bribes, promising, or extortion to improve advantage. They should not accept undue pecuniary or other advantage from public officials, nor use third parties to facilitate such transitions. The centerpiece of the obligation is to develop and apply systems of anti-bribery due diligence, which operate in a manner similar to human rights due diligence under the U.N. Guiding Principles. This section suggests the development of internal controls to percent and detects bribery. They should also enhance transparency of their internal actives and faith against bribery. This could be enhancing by making public commitments against bribery, spoliation and extortion, discussing measures that have been adopted by the enterprise.
The commentary suggests that bribery and corruption erode democracy as well as the governance structures of firm. They can discourage competitive conditions and investments, and enterprise has an important role to play in mitigating these practices. (They also list international conventions that coincide with anti-bribery instruments, which I can include as a list).
Firms should internationalize fair business parities, relating to all arms of business – marketing, consumers, and safety. When dealing with the consumers, they should also employ fair business standards, including fair marking and advertising standards. All products should meet all legally required standards for consumer health and safety, as well as provide accurate information to ensure that consumers can make an informed decision on the products or services they purchase. Firms should also create dispute mechanism that are easy to use and that operate in a timely manner. There should also be consumer education that relates to business practices, merchandise, and services. Firms should also cooperate with public authorizes to combated deceptive marketing practices and not mislead the public on accounting or transparency issues. If a government does not have the resources to audit companies for tax purposes, companies should not take advantage of weak infrastructure.
Science and Technology
There should be the ability to allow the diffusion of technological research, and to support domestic technological and science foundations. Firms should ensure that Science and technology (S&T) policies are appropriate within the local and national capacity, and should aim to address local market needs, encouraging S&T capacity training and building, and aim to developed ties within research institutions and local industry to help expand their ground and infrastructure.
The commentary stresses that “Improving environmental performance requires a commitment to a systematic approach and to continual improvement of the system. An environmental management system provides the internal framework necessary to control an enterprise’s environmental impacts and to integrate environmental considerations into business operations.”(OECD, 2011, p.55) The improvement of the general environment is grounded in so called enlightened self interest, where “The chapter thus aims to promote, within the limits of economic feasibility, competitiveness concerns and other considerations, the diffusion by multinational enterprises of the fruits of research and development activities among the countries where they operate, contributing thereby to the innovative capacities of host countries” (Ibid).
The firm should maintain competitive manners that are in accordance to competitive laws, and to refrain from fixing prices, rigging bids, established output restrictions or quotes, or even share or divide markets by allocating constituencies. There should be no anti-market or anti-competitive agreements among all competitors. Also, firms should not cooperate with investigating competition authorizes as well as to subject itself to safeguards and laws. The firm should also promote awareness of anti-competitive measures, and to ensure abiding by all legal regulation.
They should promote employee awareness of important of compliance of regulations.
The commentary suggests that the competition laws and policies prohibit the use of cartels the use of anti-competitive agreements and the use of anti-competitive conduct that exploits or extends market dominance or market power over a local market or society. They also suggest that anti competitive mergers and acquisitions are also prohibited. (OECD, 2011, p.58). And the goal, according to the OECD Guidelines, is to contribute to economic growth by promoting markets conditions to operate within a fair, and competitive playing field.
The basic principle is straightforward: "It is important that enterprises contribute to the public finances of host countries by making timely payment of their tax liabilities." "Firms should provide information to public authorizes necessary to determine its taxes. Firms should contribute to the tax base of host counties in a timely manner. They should conform to tax laws and regulation. Though not in excess, it should make every attempt for timely payments. They should embed treat tax governance and compliance as part of their broader risk management systems. They should also incorporate adopt tax risk management strategies.
Commentary on Taxation
Tax complicit entails cooperation with the authorities. The enterprise should be committed to transparency and tax compliance, regardless if taxing authority of the state its operating in is unable to apply regulatory pressure. The object is to avoid acting strategically to avoid or minimze tax obligations ("Corporate citizenship in the area of taxation implies that enterprises should comply with both the letter and the spirit of the tax laws and regulations in all countries in which they operate, co-operate with authorities and make information that is relevant or required by law available to them." Ibid. para. 100). The OECD Guidelines also suggest a management system for the management of taxing accountability: “A comprehensive risk management strategy that includes tax will allow the enterprise to not only act as a good corporate citizen but also to effectively manage tax risk, which can serve to avoid major financial, regulatory and reputation risk for an enterprise” (OECD, 2012,p.61).The Commentary also suggests a limit to cooperation with tax authorities: "In particular, the Guidelines make a link between the information that should be provided and its relevance to the enforcement of applicable tax laws. This recognises the need to balance the burden on business in complying with applicable tax laws and the need for tax authorities to have the complete, timely and accurate information to enable them to enforce their tax laws." (Ibid., Para 101). The Commentary is sensitive to an issue that first became politically sensitive in th United States in ther 1980s--transfer pricing and strategic behavior in multinational operations (Ibid., para 104-106).