1. The OECD Guidelines for MNEs: Introduction and analysis of Asian cases Centre for Research on Multinational OECD Watch secretariat Corporations (SOMO), Netherlands Joseph Wilde-Ramsing OECD Watch seminar, Bangkok, 4 November 2009

2. Presentation overview 1.What is OECD Watch? 2.What are the OECD Guidelines? General characteristics Content Complaint mechanism / NCPs Drawbacks & positive elements 3.Overview Asia-Pacific Guidelines cases Cases by date filed Status and outcome of cases to date Chapter(s) of the OECD Guidelines invoked 4.Specific case experiences: Lessons learned 3 negative case experiences 3 positive case experiences

3. 1. What is OECD Watch? 86 NGOs in 41 countries To test the effectiveness of OECD Guidelines Analyse and compare functioning of NCPs and handling of cases Share experiences and strategies between NGOs Lobby for improvements and a binding international instrument Train and assist NGOs who may wish to file complaints International NGO network

4. Presentation overview 1.What is OECD Watch? 2.What are the OECD Guidelines? General characteristics Content Complaint mechanism / NCPs Drawbacks & positive elements 3.Overview Asia-Pacific Guidelines cases Cases by date filed Status and outcome of cases to date Chapter(s) of the OECD Guidelines invoked 4.Specific case experiences: Lessons learned 3 negative case experiences 3 positive case experiences

5. Set of recommendations to multinational corporations from OECD and 11 adhering countries (Argentina, Brazil, Chile, Peru, Egypt) – Morocco (pending), Thailand? Part of the OECD Declaration on Investment (including national treatment and non-discrimination) securing rights for investors They represent a commitment from OECD Governments towards responsible behaviour of their multinational enterprises worldwide 2. What are the OECD Guidelines ?

6. Internationally accepted frame of reference for CSR - endorsed by governments, business, unions and many NGOs  OECD Guidelines are “the most comprehensive, internationally endorsed set of rules governing the activities of multinationals” (European Commission 2008)  “The OECD Guidelines are currently the most widely applicable set of government-endorsed standards related to corporate responsibility and human rights” (Ruggie 2008) 2. What are the OECD Guidelines ?

7. Content – 10 Chapters Respect for human rights (Chapter II) Contribute to sustainable development (Chapter II) Supply chain responsibility (Ch. II) Respect for core labour standards (Ch.IV) Environment (precautionary principle) Ch.V Bribery and corruption (Ch. VI) Taxation (Ch. X) Disclosure (Ch. III) 2. What are the OECD Guidelines ?

8. Complaint Mechanism Semi-judicial instrument with a dispute resolution mechanism – a type of grievance mechanism Any “interested party” can raise a complaint against a company for an alleged violation of the Guidelines – this is called a “specific instance” Bodies designated to handle complaints are National Contact Points (NCPs) – OECD and adhering countries Case can be raised at NCP of country where violation took place If there is no NCP in that country, then the NCP where the multinational is headquartered 2. What are the OECD Guidelines ?

9. What are NCPs? Guidelines’ Procedural Guidance stipulates: Role of NCPs is to further effectiveness of Guidelines Governments have to set up NCPs, but have flexibility NCPs shall undertake activities to promote Guidelines NCPs shall handle ‘specific instances’ of violations  Make initial assessment  Offer ‘good offices’ to help parties resolve issues  If no agreement, issue statement and recommendations 2. What are the OECD Guidelines ?

10. Weak on supply chain responsibility / investment nexus No sanction mechanism, lack of teeth  Lack of investigative powers Drawbacks / Disadvantages  Protection of corporate interests by NCPs Only for companies from signatory countries (i.e. not India, China, Malaysia) 2. What are the OECD Guidelines ? Inadequate implementation  NCPs  Unequal functioning of NCPs – e.g. parallel proceedings Many disappointing outcomes Resources – time and money

11. Pressure from MNE headquarters to subsidiary or from buyer to supplier Way to address issues at governmental level, apply pressure Reference tool to monitor and change the behaviour of MNEs Positive elements Cooperation and international solidarity among NGOs Complaint mechanism easier and cheaper than legal action 2. What are the OECD Guidelines ? Expose bad practices – media attention

12. Presentation overview 1.What is OECD Watch? 2.What are the OECD Guidelines? General characteristics Content Complaint mechanism / NCPs Drawbacks & positive elements 3.Overview Asia-Pacific Guidelines cases Cases by date filed Status and outcome of cases to date Chapter(s) of the OECD Guidelines invoked 4.Specific case experiences: Lessons learned 3 negative case experiences 3 positive case experiences

13. 3. Overview of Asia-Pacific Guidelines cases Of the 87 cases filed by NGOs through November ‘09, 22 (25%) relate to the Asia-Pacific region Of those 22 cases: 1 in 2009 4 in 2008 7 in 2007 3 in 2006 1 in 2005 4 in 2004 0 in 2003 1 in 2002 1 in 2001

14. 3. Overview of Asia-Pacific Guidelines cases Host countries (i.e. violation took place) Of the 22 A-P cases: 5 in Philippines 5 in India 2 in Indonesia 2 in Laos 2 in PNG 2 in Burma 2 in Colombia 1 in Pakistan 1 in Australia NCPs involved (i.e. MNE home country) Of the 22 A-P cases: 5 in Netherlands 4 in S. Korea 4 in Australia 2 in Germany 1 each in Belgium, France, Japan, New Zealand, Norway, UK, USA

15. 3. Overview of Asia-Pacific cases – issues raised Intex (Norway) nickel mining in Philippines Vedanta (UK) bauxite mining in India Daewoo (S. Korea) gas pipeline in Burma Makro (Netherlands) illegal land use in Pakistan S. Korean textile companies’ labour abuses in Philippines BHP Billiton’s (Australia) forced evictions at coal mine

16. 3. Overview of Asia-Pacific cases – issues raised ANZ Bank (Aust) facilitation of destructive forestry in PNG G-Star (Dutch) labour violations in India supply chain Shell (Dutch) dangerous oil depot in Philippines Hydroelectric dams (EdF, Tractabel) in Laos Child labour in Bayer (Germany) cotton production in India Toyota’s (Japan) anti-trade union practices in Philippines Nike (US) & Adidas (Ger) labour violations in football and sportswear production in Indonesia and India

17. Current status / outcome Filed – 1 case (4%) Pending – 3 cases (12%) Concluded – 10 cases (46%) Closed – 0 cases Rejected – 7 cases (32%) Withdrawn – 1 case (4%) Blocked – 2 cases (8%) 3. Overview of Asia-Pacific Guidelines cases

18. Reasons for 7 rejections Investment nexus / supply chain (3 cases) Situation doesn’t merit investigation (3 cases) Company no longer exists (1 case) 2 cases blocked: Parallel legal proceedings 3. Overview of Asia-Pacific Guidelines cases

19. Chapters of the OECD Guidelines invoked Chapter I – Concepts and Principles:……………………………7 cases Chapter II – General Policies (human rights, supply chain):…18 cases Chapter III – Disclosure:…………………………………………..8 cases Chapter IV – Employment and Industrial Relations:…………..13 cases Chapter V – Environment:………………………………………..12 cases Chapter VI – Combating Bribery:………………………………....4 cases Chapter VII – Consumer Interests:……………………………….1 case Chapter VIII – Science and Technology:………………………...0 cases Chapter IX – Competition………………………………………….1 case Chapter X – Taxation………………………………………………0 cases 3. Overview of Asia-Pacific Guidelines cases

20. Presentation overview 1.What is OECD Watch? 2.What are the OECD Guidelines? General characteristics Content Complaint mechanism / NCPs Drawbacks & positive elements 3.Overview Asia-Pacific Guidelines cases Cases by date filed Status and outcome of cases to date Chapter(s) of the OECD Guidelines invoked 4.Specific case experiences: Lessons learned Many disappointing outcomes – 3 examples Some hope - 3 positive outcomes

21. 4. Experiences – Disappointing outcome 1 NGOs & unions vs. Daewoo & KOGAS (Oct. 2008) Shwe gas pipeline Widespread human rights abuses (Ch.II), forced labour (Ch.IV), environmental violations (Ch.V) S. Korean NCP NCP rejects complaint  situation does not merit investigation NCP conflict of interest? Korean NCP located in Economic Ministry No recommendations to company

22. Parallel legal proceedings TMPCWA, PTC vs. Toyota; filed: 2004, Japan NCP Workers’ rights violations at Toyota factory in Philippines (Ch. IV) 8 months after filing, Japanese NCP says it will take no action until domestic court case resolved Il-Kyoung (Phils Jeon) case – WAC Philippines - 2007 Union dismissals, threatening union leaders (Ch.IV) Korean NCP  no action until legal case in PL resolved Not all NCPs agree  Danish, Dutch, UK 4. Experiences – Disappointing outcome 2

23. IUF vs Unilever – UK NCP Denial of fundamental union rights through casualization of work in Pakistan – precarious workers UK NCP engages company and organizes mediation meetings Mediation results in an agreement between unions and company Unilever agrees to create 200 additional direct, permanent jobs 4. Experiences – Positive outcome 1

24. BSL et al vs. GSL (2005) – Australian NCP Human rights abuses occurring at immigrant detention centres in Australia, including children (Ch.II) Australian NCP organizes mediation meeting and communication between parties GSL agrees to improve conditions at facilities Children released from detention 4. Experiences – Positive outcome 2

25. Survival International vs. Vedanta (2008) – UK NCP Vedanta mining bauxite on indigenous peoples’ land, Company failed to consult them or get their consent (Chapter II, V) Vedanta denies allegations & refuses to enter mediation UK NCP issues strong statement upholding complaint Will it have an impact on the ground? NCP teeth? 4. Experiences – Positive outcome?

26. Supply Chain and Investment Nexus: G-Star Case filed October 2006 at Dutch NCP Allegation: FFI, a G-Star supplier in India, abusing labour rights; G-Star not encouraging supplier to abide by Guidelines NGOs argued that the long-term, direct trade relationship between G-Star and FFI constitutes an “investment nexus”, despite the absence of monetary investment Dutch NCP accepted this argument and the case Company files counter-claims; NGOs endangered High-level mediation implemented, agreement reached 4. Experiences – ? outcome

27. Upcoming review of the OECD Guidelines may be a chance to improve both the functioning and the content of the OECD Guidelines 4. Experiences – A chance to improve?

28. More information: Quarterly Case Update and Asia-Pacific case overview available in your OECD Watch resource pack, along with OECD Watch Guide to the Guidelines All available on OECD Watch website (www.oecdwatch.org), including case database of NGO cases filed Thank you for your attention!