The OECD Guidelines for Multinational Enterprises

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The document discusses the OECD Guidelines for Multinational Enterprises, which provide non-binding recommendations to MNEs regarding their operations worldwide. It notes that governments are required to establish National Contact Points to handle issues related to the Guidelines. It also summarizes trends in cases submitted by trade unions to the NCPs, including common breaches like anti-union behavior and lack of consultation during restructuring. Finally, it analyzes the effectiveness of NCP implementation and provides recommendations to strengthen the Guidelines.

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The OECD Guidelines for Multinational Enterprises Trade Union Use 2000-2008 Turin 8-9 December 2008 Trade Union Advisory Committee to the OECD

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The idea that the institutional framework can be a determining factor in stimulating or slowing informal activities arose relatively recently. Previously, the economic environment was the primary concern. For example, governments tried to promote micro-enterprises by granting them easier access to capital; for several decades, the financing problems of these enterprises have been analysed and aid programmes undertaken in that domain. Economists only began to pay more attention to the role of institutions in development and study the impact of the institutional framework on informal activities in the 1980s. Studies of this type are of obvious practical interest. It is hoped that they will give rise to recommendations for improving the institutional framework, and that is the intent of the Development Centre’s project: to deepen our knowledge of the impact of the institutional framework so as to improve it. It is not self-evident that the state could intervene effectively along these lines. Indeed for 30 years advocates of state control and then liberals, for opposing reasons, believed that the state could do nothing for the informal sector. During the 1960s and 1970s, partisans of state control promoted rapid development of the modern sector through state intervention, or even state control over the entire sector. In their eyes, the informal sector was a marginal, residual activity that would disappear thanks to job creation in the modern sector. They preferred to ignore the informal sector because it was a reminder of the country’s economic backwardness, especially in the newly independent states which had taken the path of modernity and wanted to forget certain traditional aspects of their economies. At the same time, however, a regulatory framework modelled on those of the developed countries and completely inappropriate for traditional activities, was retained and even extended. This programme failed for several reasons. Medium-sized and large modern sector enterprises were unable to resolve the employment problem in cities where growth of the working-age population was extremely rapid (more than 4 or 5 per cent annually). Then the financial crisis of the early 1980s hit most of the countries that had chosen this strategy, ending their investments in large modern sector enterprises, investments mostly financed by foreign borrowing. The result was a radical change of attitude: the formerly ignored informal sector became the last hope of governments in the struggle against unemployment. At a time when adjustment programmes were sometimes leading to massive losses of employment in the large state-controlled enterprises, the informal sector was somehow expected to meet the heavy responsibility of creating more jobs to compensate for these effects of adjustment. As the financial crisis coincided with the success of neoliberal theory in the United States and Britain,

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