Corporate Shirking Responsibility: About The OECD Guidelines for Multinational Enterprises.

I challenge anyone to read through the policy documentation given by the OCED Guidelines for Multinational Enterprise.

Summing sixty-five pages and most recently revised on 25th May last year – the guidelines (themselves mostly complex jargon) represent a commitment made by OECD member states to abide by “sustainable” trading practices: trading encounters between states that progress sustainable development i.e. development that respects human rights and encourages social and human development as well as economic (OECD 2011).

Yet despite positive intent – policies that rely on the pretense that persuasive governance can influence business can never really have much political clout.

What power can policies, imposed by governments without stringent legislation truly hold over enterprises basically a law unto them selves? Yes, governments can ask, but ethics and human rights will always come second to profit and accumulation.

That is not to say that there are not businesses out there with a sense of what is right, but if business ethics is something important to brand image – it will not be government which has given rise to this situation.

And where, corporates are shirking responsibility (as is the case for most of ‘budget’ Britain), voluntary discussions have very little weight. Brands may deposit ‘Codes of Conduct’ in the offices of key suppliers – but these are just guidelines for audit and systematic assessment of ‘compliance’ – an outcome of necessity rather than any real commitment to realizing the aspirations of their productive dependents.

Other activities, which may increase labour production costs, are discouraged. While no brand or factory enterprise would admit to curbing trade union activity – worker sensibilities are taken advantage of and workers are not made aware of their rights.

At the end of the day the decision to undertake an investment opportunity is the outcome of the drive to accumulate profit. That local economies may benefit from investment is not the motivation but an attributed outcome. The idea, as pitched by the OECD that companies can balance trade with altruism is absurd, the main reason for inward investment by a corporate is to take advantage of prevailing economic conditions.

Furthermore, when push comes to shove, the OECD actually discourages policies powerful enough to indicate any real commitment to improving livelihoods. Political activity is discouraged; as is anything which may disrupt national comparative advantage. And when your national comparative advantage is low wages, this is a problem.

Therefore the guidelines represent nothing but rhetoric – nicely worded idealisms, providing little space for real improvements or contingent pressure. And without real pressure, suppliers, developing country governments and the lesser-concerned businesses will continue to take advantage of low wage labour.

Therefore if sustainable development depends on decent work, and decent work depends on decent wages, then the positive premise of the OECD guidelines can never be achieved.


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