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“ Codes, Compacts, and Guidelines: Implications for the International Trade and Investment Framework”. - Christopher Wilkie, Industry Canada, Ottawa. 2nd Annual EnviReform Conference Hard Choices, Soft Law: Combining Trade, Environment, and Social Cohesion in Global Governance
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“Codes, Compacts, and Guidelines: Implications for the International Trade and Investment Framework” - Christopher Wilkie, Industry Canada, Ottawa 2nd Annual EnviReform Conference Hard Choices, Soft Law: Combining Trade, Environment, and Social Cohesion in Global Governance Munk Centre for International Studies, University of Toronto, 8-9 November, 2001
OECD Guidelines for Multinational Enterprises • Review a highlight for OECD Members in year 2000 • Part of OECD Declaration on International Investment and Multinational Enterprises and approach • Includes 3 non-OECD Members (Argentina, Brazil, Chile) • First revisions since 1991 (fourth since 1976); by far the most comprehensive • Potential for the future
Guidelines represent shared values • Guidelines complement corporate codes • Multilaterally endorsed. • Shared values of governments and citizens regarding MNE activity, backed up with implementation procedures • Business groups, labour representatives, and NGOs also support
Guidelines, FDI, and Trade • Review was timely. FDI sensitive, but fundamental to economic, social, and environmental goals. Guidelines respond to public concerns in this context • Apply world-wide • Complement other governance initiatives, e.g. anti-bribery, corporate governance • Links to international trade and investment framework remain to be explored in detail
Guidelines - Textual Contents • Not a substitute for law • Labour: four core standards of the 1998 ILO Declaration • Environment: encourages internal environmental management and contingency planning • Disclosure: reflects Corporate Governance principles; encourages social and environmental accountability
New Textual Highlights (cont’d) • New chapters on combating bribery [solicitation and offering]; consumer interests [safety, complaints] • Human rights provision - close business and NGO involvement for complementing State efforts • Supply chain: “Enterprises should…encourage, where practicable, business partners, including suppliers and subcontractors, to apply principles of corporate conduct compatible with the Guidelines”
Guidelines - Implementation Procedures • Enhanced procedures - National Contact Points (NCPs) the key • Promotion, handling enquiries, helping to resolve issues in specific instances • OECD; Business and Trade Union Groups • NGOs; non-adhering countries
Review Process • Process fundamentally important to success • Inclusion of business community, labour, NGOs • Consultations of non-Members, plus public through the Web • Legitimacy demands inclusion • All are lessons for trade and investment system
Complements • Private initiatives, codes and recommendations • Business support for third parties: ISO 14000, GRI; Dow Jones/Sustainability Asset Management; CalPERS and other institutional investors • Other international initiatives: Global Compact, IFC ombudsman
The Future • Corporate social responsibility: focus on labour and environment • Business support crucial • Trade and investment framework part of this debate (e.g. WTO disputes; NAFTA side agreements; Guidelines) • Lessons to be drawn - for governance and for the trading system
Options • Independent development of CSR initiatives (e.g. OECD Guidelines, UN Global Compact, private codes) • WTO - Trade and investment suggestions/TPRM-type mechanisms • Side agreements (e.g. NAFTA) • Other incorporation in agreements
Conclusion • Strengths and limitations to a Guidelines/CSR approach • Non-binding initiatives complement legal framework, each with a role to play • Caveat: incorporating soft law issues into international trade and investment institutions strengthens these institutions. Is this a goal?