BUSINESS AND HUMAN RIGHTS / Šturma, Mozetic (eds)

2. Nature and content of the OECD Guidelines for Multinational Enterprises

The Guidelines are a part of the OECD Declaration on International Investment and Multinational Enterprises 9 and they should be read in this context. The Declaration is an important policy commitment of adhering governments adopted by OECD Governments in 1976 (and subsequently updated) to facilitate direct investment among OECD Members. For this purpose, it balances the promotion by governments of an open international investment climate with a commitment to responsible business conduct. The Guidelines were created in 1976 and they are the only multilaterally agreed and the most comprehensive code of RBC that governments have ever committed to. In other words, they represent a consensus on what constitutes good corporate behaviour. 10 According to the Guidelines, States have a primary duty to protect human rights, however companies should respect human rights wherever they operate. The Guidelines can be characterised as a set of non-binding principles, an enforceable code of conduct and “soft law” from the international law point of view. 11 In describing themselves, the Guidelines use terms “voluntary”, “non-binding” and “not legally enforceable”. They are considered to be just morally binding. 12 Indeed, this invites a question over the effectiveness and compliance – doubts inherent to soft law in general. Nevertheless, soft law instruments may eventually develop into binding or hard law, particularly when the implementation proves effective. 13 This is the case of the Guidelines when despite their non-binding nature, the adhering countries are responsible for the implementation of the Guidelines and it influences their compliance as will be discussed below. Furthermore, soft law instruments may eventually develop into binding or hard law, particularly when the implementation proves effective. 14 MNEs are expected to obey domestic law and observe the Guidelines which represent adhering countries’ expectations for multinational behaviour. 15 Enterprises should avoid and address what is referred to as “adverse impacts” on matters covered by 9 OECD Declaration on International Investment and Multinational Enterprises, adopted 25 May 2011. The Guidelines are one of the four annexes attached to the Declaration, which comprises four elements: the Guidelines, the “national treatment” principle, the commitment to minimize conflicting requirements, and the commitment to cooperate in the field of international investment incentives and disincentives. 10 MUCHILINSKI, P. T.: Human Rights and Multinationals – Is There a Problem?, 77 International Affairs , p. 37. 11 DAVARNEJAD, L.: In the Shadow of Soft Law: The Handling of Corporate Social Responsibility Disputes Under the OECD Guidelines for Multinational Enterprises, 2011 Journal of Dispute Resolution , 2011, p. 358. 12 Their use is nevertheless significant in signalling development which may ultimately be converted into legally binding rules. SHAW, M. N.: International Law . Cambridge: Cambridge University Press 2008, p. 118. 13 ČERNIČ, J. L.: Corporate Responsibility for Human Rights: A Critical Analysis of the OECD Guidelines for Multinational Enterprises, 4 Hanse Law Review 2008, p. 82. 14 Ibid. 15 Ibid, p. 79.

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