Multinational enterprises have become a key driver of the global economy, with their foreign direct investment increasing from 8% of world GDP in 1990 to 20% in 2006. While FDI has contributed to development in emerging markets by introducing modern production techniques and management practices that raise productivity and promote better wages, some MNEs violate human rights and labor conditions in their foreign operations. The OECD paper analyzes how initiatives like guidelines for multinational enterprises can help improve labor conditions worldwide by encouraging responsible business conduct.

1. WORKING CONDITIONS IN THE
FOREIGN OPERATIONS OF
MULTINATIONAL ENTERPRISES
Paper written by Alexander Hijzen
Analysis and Policy Division of the OECD
2008
By William Parra

2. MNE Key Drivers of the
World Economy
• Increase from 8% of world
GDP in 1990 to 20% in 2006 of
foreign investment
• FDI Since mid-1990 biggest
source of external finance for
developing countries.
FDI has contributed to their development in
emerging and developing economies.

3. How it works?
• Introduction of modern production.
• Management Techniques
• Raise productivity in the host country
• Promote better wages and working
conditions
• Stimulate local companies to improve
wages and working conditions

4. However...
• Practicing unfair competition
• Violating human rights and labor conditions
Where are the non-wages working conditions?

5. Foreign takeovers raise average wages
Source: OECD (2008) Employment outlook

6. What to do?
• Initiatives to promote responsible business conduct
• Guidelines for Multinational Enterprises
• OECD Guidelines are playing a role in the
improvement of labor conditions worldwide

7. Thank you for your
aKention